Ahead of the Open | February 18, 2022
GRAIN CALLS
Corn: 1 cent lower to 1 cent higher.
Soybeans: 3 to 6 cents higher.
Wheat: 1 to 4 cents higher.
GENERAL COMMENTS: Soybean futures were firmer overnight and briefly climbed above $16.00 before fading below that level. Corn was slightly lower overnight and wheat was modestly higher. Malaysian palm oil futures posted a third consecutive weekly decline, while Nymex crude oil is down nearly $2.00. The U.S. dollar index is more than 100 points higher this morning.
USDA reported daily sales of 198,000 MT of soybeans for delivery to “unknown destinations,” including 66,000 MT is for delivery during the 2021-22 marketing year and 132,000 MT for 2022-23. Since Jan. 28, USDA has reported a combined 3.52 MMT of soybean sales to China or unknown destinations.
Grain and livestock markets will observe normal trading hours today ahead of the extended holiday weekend. Markets and government offices are closed on Monday, Feb. 21 for Presidents Day, so there will be no Pro Farmer market reports or commentary. Grain markets will resume trade with the overnight session starting at 7:00 p.m. CT on Monday, Feb. 21, while livestock markets will reopen at 8:30 a.m. CT on Tuesday, Feb. 22.
Traders continue to monitor the Russia/Ukraine standoff. The U.S. ramped up warnings of a possible Russian attack on Ukraine, with President Joe Biden saying the probability of an invasion is “very high.” Russian officials said no invasion of Ukraine was underway and none was planned. But the Kremlin said in an official response to the Biden administration’s proposed security assurances that the offers were unsatisfactory, and Russia might have to resort to unspecified “military-technical measures.”
Indian traders have contracted to import a record 100,000 MT of soyoil from the U.S. because of limited supplies from drought-hit South America, at a time when prices of rival palm oil are scaling record highs, three dealers told Reuters. The higher purchases should support soyoil futures, which earlier this week posted the highest closing price since July. India, the world's biggest edible oil importer, traditionally buys soyoil from Argentina and Brazil.
Russia’s wheat export tax for Feb. 23-March 1 will be $91.00 per MT, based on an indicative price of $330.10 per MT. The wheat export tax has dropped six straight weeks and is down from the peak rate of $98.20 per MT in mid-January but is still 224% higher than the initial rate of $28.10 per MT at the beginning of June when Russia started using the sliding scale.
France’s ag ministry rates 95% of the country’s soft wheat crop as being in good/excellent condition, unchanged from the previous week and above 86% last year, though down slightly from 99% before winter. The country’s winter barley and durum crops are also rated highly at 94% and 89% good/excellent, respectively.
Taiwan purchased 54,920 MT of U.S milling wheat.
CORN: March corn futures fell as low as $6.47 overnight after gaining 3 cents yesterday to $6.50. The lead contract ended last week at $6.51. Futures remain in a strong uptrend but momentum stalled this week, and speculators’ large net long position may make the market vulnerable to long liquidation ahead of a three-day week. Initial support is seen at the 10-day moving average of $6.44 3/4 and yesterday’s low at $6.42 3/4. Resistance includes this week’s high at $6.56 3/4.
SOYBEANS: March soybeans rose as high as $16.02 overnight before fading but remain up from last week’s close at $15.83. With South American crop losses likely priced in, money flow will be key to near-term price direction. Initial resistance is seen at this yesterday’s high at $16.06, with initial support at the 10-day moving average at $15.79 3/4.
LIVESTOCK CALLS
CATTLE: Steady-mixed
HOGS: Steady-firm
CATTLE: Cattle futures may see further consolidation to end the week, with support from stronger cash prices offset by slumping wholesale beef. Packers have most of their near-term needs covered and are now buying cattle for a couple weeks out, according to cash sources. That’s prompted some feedlots to pause on sales, despite roughly $2 higher cash prices. Feedlots must decide whether to pull the trigger on the higher prices for later delivery or hold back some supplies in hopes of higher prices next week. USDA-reported live steers averaged $142.15 through yesterday morning, up $1.67 from last week’s average. Packers have been cutting wholesale beef prices to spur demand. Choice cutout values fell 3 cents yesterday to $269.59, a six-week low. April live cattle fell 15 cents yesterday to $146.775, up from $146.175 at the end of last week.
