Ahead of the Open | December 22, 2022
GRAIN CALLS
Corn: Steady to 1 cent lower.
Soybeans: 4 to 6 cents lower.
Wheat: Steady to 3 cents higher.
GENERAL COMMENTS: Corn futures hit three-week highs in narrow-range trading overnight before fading, while soybean futures also eased. Winter wheat futures also touched three-week highs. Malaysian palm oil futures fell 1.7% on slower export demand, while front-month crude oil futures rose around $1. U.S. stock index futures signal a weaker open, while the U.S. dollar index is slightly firmer.
Frigid conditions descended on most of the U.S. Plains overnight, with temperatures falling below zero Fahrenheit southward into the northern Texas Panhandle, northwestern Oklahoma and in most of western and southern Kansas, World Weather Inc. said. “The cold raises concern over winter wheat conditions… since this cold air outbreak will continue into the weekend, raising the potential for unprotected wheat to be vulnerable to some damage and possibly some winterkill. Crop recovery will be possible if plant death is avoided and timely rain and mild weather occurs in the spring.”
A cargo insurance facility providing coverage for shipments via Ukraine’s grain export corridor will continue next year with no rate increases, an underwriter with Lloyd’s of London insurer Ascot said. “The ‘AsOne’ Black Sea facility will continue unabated with no planned increases to rating”, Chris McGill, Ascot’s head of cargo, told Reuters. “This is against a supply-driven, rate-hardening environment in the marine war market.”
President Volodymyr Zelenskyy told the U.S. Congress Wednesday night aid to Ukraine was an “investment in global security” and “not charity” as he pressed for more assistance for his country’s war effort. The U.S. announced $1.85 billion in additional military assistance for Ukraine, including a transfer of the Patriot Air Defense System. The Kremlin said U.S. supplies of a Patriot missile system to Ukraine would not contribute to settling the conflict or prevent Russia from achieving its goals.
USDA’s Animal and Plant Health Inspection Service (APHIS) announced two additional cases of highly pathogenic avian influenza (HPAI) in commercial operations — a commercial turkey meat bird flock in Hanson County, South Dakota (31,800 birds) and a commercial table egg layer flock in Weld County, Colorado (260,000 birds), bringing the total affected birds to 57.82 million, including 303 commercial and 404 backyard flocks.
Egg prices are hitting records, driven by an avian-influenza outbreak that has killed tens of millions of poultry across nearly all 50 states. Wholesale prices of Midwest large eggs hit a record $5.36 a dozen in December, according to research firm Urner Barry. Retail egg prices have increased more than any other supermarket item so far this year.
Indonesia’s 2022 palm oil exports are estimated at 34.67 MMT, down from last year’s 37.78 MMT, partly due to a temporary export stoppage in April, the chief executive of its palm oil fund (BPDPKS) said today. Indonesia’s 2022 palm biodiesel consumption is seen at 10.6 million kilolitres, up from last year’s 9.29 million kilolitres.
Japan purchased 144,441 MT of milling wheat in its weekly tender, including 83,881 MT from the U.S. and 60,560 MT from Canada. Iraq purchased 150,000 MT of milling wheat, including 100,000 MT from Australia and 50,000 MT from the United State. Taiwan purchased 56,000 MT of U.S. milling wheat.
CORN: USDA reported net U.S. corn sales of 636,800 MT for 2022-23 during the week ended Dec. 15, down from 958,900 MT the previous week and at the low end of trade expectations between 625,000 to 900,000 MT. March corn overnight rose as high as $6.64 3/4, the contract’s highest intraday price since $6.69 on Dec. 1, before retreating after hitting resistance at the 40-day moving average.
WHEAT: Net U.S. wheat sales totaled 334,200 MT, down from 469,000 MT the previous week and within trade expectations ranging from 200,000 to 500,000 MT. March SRW wheat overnight reached $7.77, the contract’s highest intraday price since $7.83 on Dec. 2.
LIVESTOCK CALLS
CATTLE: Steady-firmer
HOGS: Steady-firm
USDA reported net weekly beef sales of 4,500 MT for 2022, led by Japan (3,500 MT, including decreases of 400 MT). Net sales of 7,200 MT for 2023 were led by Japan (2,600 MT) and China (2,000 MT).
HOGS: Lean hog futures may gain support from followthrough buying after Wednesday’s surge to the highest levels in over two weeks, as well as expectations the cash market is near a bottom. The CME lean hog index is down 29 cents to $80.57 (as of Dec. 20), an 11-month low. Despite a drop of nearly $42 from this year’s high in early August, the index is still $7.55 above year-ago, though a seasonal low had already been forged by now in 2021. Wholesale pork remained under pressure, with pork cutout values dropping $1.01 to $82.45, the lowest daily average since Jan. 11. USDA reported net weekly U.S. pork sales of 58,700 MT for 2022. Lead buyers included Mexico (33,400 MT, including decreases of 300 MT) and Japan (9,900 MT, including decreases of 700 MT). Net sales of 16,100 MT for 2023 were primarily for China (4,800 MT), South Korea (3,200 MT), Mexico (2,500 MT), Japan (2,200 MT) and Canada (1,200 MT).
February lean hogs rose $4.15 to $88.40, the contract’s highest close since Dec. 5.
USDA will release its monthly Cold Storage Report detailing frozen meat stocks at the end of November after today’s close. The five-year average is a 3.5-million-lb. increase in beef stocks and a 52.7-million-lb. decline in pork stocks during the month.
