Ahead of the Open | December 15, 2022

GRAIN CALLS

Corn: Steady to 1 cent higher.

Soybeans: 1 cent lower to 1 cent higher.

Wheat: 2 to 6 cents higher.

GENERAL COMMENTS: Corn and soybean futures traded narrowly mixed overnight, while wheat futures posted modest gains. Malaysian palm oil futures fell nearly 2% on slower exports and weakness in rival vegoils, while front-month crude oil was modestly lower. U.S. stock index futures signal a lower open. The U.S. dollar index has erased most of its earlier gains.

USDA reported a daily sale of 101,600 MT of corn for delivery to Mexico during the 2022-23 marketing year.

Eight to 16 inches of snow fell the past two days across northwestern and north-central Nebraska through much of South Dakota (excluding the far east) to North Dakota, World Weather Inc. said. More snow is expected due to a strong slow-moving low-pressure trough moving through the region. Additional snow will fall for the northern Plains, Upper Midwest and neighboring areas as the trough continues to slowly make its way over central North America. The snow will often be accompanied by elevated wind speeds that may promote blizzard or blizzard-like conditions and cause stress to livestock.

Argentina’s overall weather outlook “has not changed much today,” World Weather said. Showers occurred overnight in central parts of the nation and drier weather will evolve and dominate over the coming week. Southern Brazil will continue to receive restricted rain and experience some net drying conditions over the next 10 days and perhaps longer.

Members of the National Oilseed Processors Association (NOPA) are expected to report November soybean crush totaled 181.5 million bu., according to a Reuters survey. That would be down 1.6% from October but up 1.1% from last year and a new record for the month. Soyoil stocks are expected to total 1.619 billion pounds.

The Rosario Grain Exchange cut its 2022-23 Argentine wheat crop forecast another 300,000 MT to 11.5 MMT, far below the 19 MMT that was expected at the start of the growing season. “Wheat in the central region has suffered a devastating season, between the constant lack of water... and the frosts,” the exchange said. The exchange maintained its 2022-23 soybean and corn crop forecasts at 48 MMT and 56 MMT, respectively.  

In its initial projections for 2023-24, Strategie Grains forecasts European Union (EU) wheat production at 128.7 MMT, up 3.2 MMT (2.5%) from this year. For corn, the firm expects output will rise to 63.7 MMT, up 26% from a 15-year low of 50.5 MMT this year. Strategie Grains trimmed its 2022-23 EU wheat export forecast by 100,000 MT to 31.5 MMT.

Japan purchased 154,942 MT of wheat in its weekly tender, including 65,870 MT U.S., 63,562 Canadian and 25,510 MT Australian. Tunisia purchased 125,000 MT of durum wheat from an unspecified origin.

CORN: USDA reported net U.S. corn sales of 958,900 MT during the week ended Dec. 8, up from 691,600 MT the previous week and above trade expectations ranging from 600,000 to 900,000 MT. Top buyers included Guatemala (196,400 MT) and Mexico (170,800 MT, including decreases of 30,800 MT).

SOYBEANS: USDA reported net weekly soybean sales totaling 2.943 MMT, up sharply from 1.72 MMT the previous week and well-above expectations ranging from 1.5 to 2.0 MMT. China led buyers at 1.253 MMT, including 197,000 MT switched from “unknown destinations” and decreases of 184,200.

WHEAT: Net weekly wheat sales totaled 469,000 MT, up from 189,900 the previous week and above expectations ranging from 150,000 to 300,000 MT. The top buyer was “unknown destinations” at 164,000 MT.

LIVESTOCK CALLS

CATTLE: Steady-weaker

HOGS: Steady-firmer

CATTLE: Live cattle may face pressure from indications of slower cash trade and sharp declines in wholesale beef, but snowstorms in the U.S. Plains may limit price downside. Packers have been slow to establish bids in the negotiated cash cattle market this week but appear unwilling to pay any more than steady prices. Feedlots have little intent to move cattle at lower prices. It appears active cash cattle trade may not be seen until Friday – and the traded volume may be light for a second straight week. Choice beef cutout values fell $4.88 to $250.07 on movement of 117 loads.

USDA reported net weekly beef sales of 10,900 MT for 2022, primarily for South Korea (4,100 MT, including decreases of 500 MT), Japan (3,700 MT, including decreases of 300 MT), and Mexico (1,600 MT). Net sales of 2,900 MT were reported for 2023.

HOGS: Lean hog futures may gain support from signs the cash market may be finally establishing a bottom. The CME lean hog index is up 6 cents to $81.68 (as of Dec. 13), which follows a 15-cent gain on Wednesday. While they are modest, this is the first consecutive daily gains since Oct. 21 and Oct. 24, building hopes a seasonal low may be in place. Wholesale pork weakness may limit buying interest, as pork cutout values plunged $6.87 Wednesday to an 11-month low at $84.27, driven by a drop of nearly $37 in bellies. February lean hogs fell $1.175 to $83.40, the contract’s lowest close since Oct. 14.

Net weekly U.S. pork sales totaled 14,400 MT for 2022, primarily for Mexico (9,600 MT, including decreases of 500 MT), China (2,500 MT, including decreases of 200 MT) and Japan (1,600 MT, including decreases of 200 MT). Net sales of 7,700 MT were reported for 2023.