Market Snapshot | November 12, 2021

Corn futures erased overnight weakness to trade 2 to 4 cents higher mid-morning.  

• December futures are on track to close higher for the third week out of the past four, supported by strengthening technicals and spillover from rallying soybean prices.
• While USDA’s crop numbers earlier this week were mostly bearish for corn, harvest pressure is winding down and market focus is shifting to exports and South American weather.
• Net U.S. corn export sales for the week ended Nov. 4 totaled 1.067 MMT, down 13% from the previous week and down 4% from the average for the previous four weeks, USDA reported.
• Sales were in the middle of trade expectations ranging from 700,000 MT to 1.4 MMT, based on a Reuters survey of analysts.
• December corn futures overnight fell as low as $5.66 3/4 before rebounding to an intraday high at $5.75 3/4, up from $5.53 at the end of last week.
• Bulls have a near-term technical advantage in corn, with prices sustaining a small up-trend since mid-October and trading above key moving averages. Upside objectives include closing December futures the November high at $5.86.

Soybean futures are around 10 cents higher in most contracts and soymeal is up $4 to $6-plus, while soyoil is also higher after erasing early declines.

• Soymeal futures surged to a 2 1/2-month high after USDA reported a sharp jump in export sales.
• USDA reported a daily soybean sale of 256,930 MT to unknown destinations during the reporting period.
• In its weekly report, USDA said net soybean sales for the week ended Nov. 4 totaled 1.289 MMT, down 31% from the previous week and down 25% from the four-week average. Sales were near the middle of trade expectations ranging from 950,000 MT to 1.8 MMT.
• Weather in South America remains most favorable for early crop development, though conditions may turn drier in Brazil’s key Rio Grande do Sul and Parana regions Nov. 19-26, World Weather Inc. said.
• January soybeans rose as high as $12.29 3/4 and are up from $12.05 1/2 at the end of last week. December soymeal reached $351.10, the highest since late August.

Winter wheat futures are mixed but off overnight lows, while spring wheat is firmer.

• Mild, late-week profit-taking is limiting the upside in HRW and SRW futures after both markets closed at multi-year highs yesterday amid ongoing concern over tighter global supplies. Futures are still up on the week.
• U.S. wheat exports remain sluggish. USDA reported net weekly wheat sales of 285,900 MT, down 29% both from the previous week and from the prior four-week average. Sales were at the low end of trade expectations ranging from 200,000 to 500,000 MT.
• Little moisture relief is forecast for the HRW areas of the U.S. Plains over the next week. The following week, precipitation “may be a little greater; however, very short soil moisture will continue in western production areas of the region,” World Weather said.
• December SRW futures earlier fell as low as $8.05 1/2 but are still up from last week’s close at $7.66 1/2 and yesterday settled at the highest level for a nearby contract since December 2012.
• December HRW futures fell as low as $8.18 1/4, but are still up from $7.78 3/4 at the end of last week.

Live cattle are narrowly mixed at mid-morning, while feeder cattle are lower.

• December live cattle rebounded from initial weakness to post a two-month high as the cash market closes out another strong week, though weakness in wholesale beef is limiting the upside.
• Feeders are under pressure from higher corn prices.
• Packers were active buyers again this week, helping push cash prices to the highest levels since 2017. Live steers in some areas topped $132.00, compared to last’s week’s average of $129.23.
• Cutout values have fallen to two-week lows, indicating record retail beef prices are crimping demand. USDA reported Choice grade cutout values fell $1.29 early yesterday to an average of $284.23, the fifth consecutive daily decline.
• Net weekly beef sales totaled 20,600 MT, up 23% from the previous week and up 39% from the four-week average, with China (8,200 MT) and Taiwan (4,300 MT) prominent buyers.
• December live cattle rose as high as $132.625, up from last week’s close at $131.80 and the highest intraday price since $133.90 on Sept. 2.

Lean hog futures are mixed, with nearby December lower and deferred contracts higher.

• Weak cash fundamentals continue to burden hog futures, with the latest CME lean hog index down 77 cents to $77.95. The index has fallen 17% since the beginning of October and is the lowest since $77.74 on Feb. 19.
• Futures’ have narrowed the discount to the cash index, but the spread still reflects expectations the cash market will continue to erode into early December.
• Pork carcass cutout values rebounded sharply early yesterday to $95.30 but are still down from $96.35 at the end of last week.
• Net weekly U.S. pork sales totaled 23,300 MT, down 49% from the previous week and down 28% from the four-week average. Lead buyers included Mexico (7,800 MT), China (5,800 MT) and Japan (5,400 MT).
• December lean hog futures are on track to end lower on the week after closing last week at $76.55. Chart levels to watch include yesterday’s low at $73.70 and the 40-day moving average at $75.60.