Ahead of the Open | December 5, 2022
GRAIN CALLS
Corn: 2 to 4 cents higher.
Soybeans: 7 to 8 cents higher.
Wheat: 2 to 5 cents higher.
GENERAL COMMENTS: Corn and wheat futures rose overnight on corrective buying following losses last week, which soybean futures also firmed. Malaysian palm oil futures rebounded 0.3% as expectations of a drop in stocks boosted prices, while front-month crude oil rose more than $2. U.S. stock index futures signal a lower open and the U.S. dollar index is down slightly.
USDA reported a daily sale of 130,000 MT of soybeans for delivery to China during the 2022-23 marketing year. The sale follows recent USDA-announced soybean sales to China on Nov. 23 and 30 totaling 246,000 MT.
China is set to announce the further easing of some of the world’s toughest Covid curbs as early as Wednesday, sources told Reuters. A new set of nationwide rules are due to be announced soon, two sources with knowledge of the matter said, paving the way for more coordinated easing. China may announce 10 new Covid-19 management measures as early as Wednesday. Beijing is also weighing whether to scale down its management of the virus to reflect the less serious threat it poses as early as January, the sources added.
Argentina’s weather will remain stressful for crops this week amid limited rain and warm to hot temperatures, according to World Weather Inc. The forecaster says Brazil’s weather will be generally favorable, with weekend rains forecast to continue early this week. But some areas in the center-west and south-central parts of the country could be missed by the greatest rainfall.
Brazil’s soybean planting reached 91% complete as of last Thursday, according to AgRural, slightly behind last year’s 94% pace for the date. Planting of the first-season corn crop stood at 93%, just behind last year’s 94% pace.
The West imposed new sanctions on Russian crude oil. The sanctions put the conflict with Moscow into an unpredictable new phase that could inject further volatility into global oil markets. The European Union and U.K. barred inbound shipments of Russian crude today. In tandem, the EU, U.S. and allies placed curbs on shipping, insuring and funding Russian crude anywhere in the world. The restrictions are the first major attempt to curb Moscow’s fossil-fuel revenue.
The Organization of the Petroleum Exporting Countries and Russia-led allies known as OPEC+ will keep output steady but will cut it by two million barrels a day, as agreed in October. This comes as the Group of Seven’s $60-a-barrel price cap on Russian oil kicks in today and the European Union bans most imports of Russian oil. OPEC could still increase production in early 2023.
Ukraine’s wheat exports fell to 1.58 MMT in November from 1.98 MMT in October, the UGA Ukrainian grain traders union said. UGA said Ukrainian exporters had declared 5 MMT of grains and oilseeds for export during November and the “grain corridor” contributed 2.3 MMT last month, down more than 1.2 MMT from October. Since July 1, Ukraine has exported 18.3 MMT of grain, down nearly 30% from the same period last year, according to the country’s ag ministry. That included 9.8 MMT of corn, 6.9 MMT of wheat and 1.5 MMT of barley.
China sold all 39,709 MT of state-owned wheat reserves put up for auction last week. The average sales price was 2,797 yuan ($401.35) per metric ton.
Pakistan purchased 450,000 MT of Russian wheat.
CORN: March corn overnight fell as low as $6.45, a 3 1/2-month low, before rebounding to post modest gains by the close of overnight trading. The most-active contract ended Friday at $6.46 1/4, down 25 cents for the week and the lowest close since Aug. 22.
WHEAT: March SRW wheat traded within the previous session’s range overnight after ending last week at $7.61, down 36 cents for the week and the contract’s lowest close since Jan. 14.
LIVESTOCK CALLS
CATTLE: Steady-weaker
HOGS: Steady-firmer
HOGS: Lean hog futures may extend last week’s gains behind beliefs the cash market is near a bottom. The CME lean hog index is down another 37 cents to $82.87 (as of Dec. 1), the lowest since late January. December futures finished 44.5 cents below that level signaling traders don’t anticipate heavy near-term pressure on the cash market. With just over a week until the December contract expires, it will likely hold close to the cash index. Pork cutout values rose $2.42 Friday to $88.94, up $1.31 for the week. February lean hog futures surged $1.225 Friday to $90.425, up $1.925 for the week and the contract’s highest close since Nov. 17.
