Market Snapshot | November 17, 2021

Corn futures are 8 to 10 cents higher mid-morning and close to breaking above trendline resistance.  

• December corn futures rose to two-week highs on strong spillover support from surging soybeans and wheat.
• U.S. ethanol production rose 21,000 barrels per day (bpd) to 1.060 million bpd during the week ended Nov. 12, the Energy Information Administration reported. Ethanol stocks dropped 205,000 barrels to 20.08 million barrels.
• Over the past four weeks, U.S. ethanol production averaged 1.087 million bpd, the highest four-week average since December 2017.
• December futures rose as high as $5.84, roughly coinciding with a downtrend line drawn off the May and June highs. A sustained push above that level could portend a test of the November high at $5.86 and the August high at $5.94 1/4.

Soybean futures are up over 30 cents and trading at the highest levels since late September; soymeal is also up sharply and soyoil is moderately firmer.

• Soybeans are rising on strengthening technical and signs of stepped-up exports.
• USDA reported a daily soybean sale of 132,000 MT to China and a 30,000-MT soyoil sale to India – both for 2021-22. The soyoil sale was a particularly big purchase by India.
• Today’s sale announcement followed daily sales the previous two days this week, totaling 425,000 MT and also for unknown destinations.
• Crop conditions in South America remain generally favorable. Most of southern Brazil is expected to receive timely rain today through Nov. 19, with follow up rain the middle of next week that will “ensure favorable soil moisture in much of the region through the end of this month,” World Weather Inc. said.
• January soybeans pushed above the downtrend line drawn from the May and July highs and rose as high as $12.89 1/4, the highest intraday price since $13.04 1/4 on Sept. 30, as an active pool of buy stops was triggered.
• For market bulls, upside targets include closing January futures above solid resistance at $13.00. Other chart levels to watch include the 200-day moving average at $12.97 1/4.

Wheat futures are firmly higher, led by the SRW market’s rally to fresh nine-year highs.

• A tightening global supply outlook continues to fuel buying interest in wheat futures, with winter wheat prices heading for the seventh daily gain in the past eight.
• Ukraine has already exported 12.4 MMT of wheat – nearly half of the 25.3-MMT quota for 2021-22, APK-Inform agriculture consultancy said today. But the country’s ag ministry says it plans no additional wheat export interventions at this time.
• Canada’s wheat farmers may boost wheat plantings by about 6% next year, which could raise total spring wheat output to around 22 MMT, an official with the country’s agriculture ministry said today. Initial projections showed durum wheat seedings could rise about 10%.
• Dryness in the U.S. Plains is also supporting the market. No significant precipitation is expected in top HRW areas over the next 10 days, World Weather said. “Moisture is needed in dryland production areas from western Texas to eastern Colorado and extreme western Kansas,” the forecaster said.
• March SRW futures posted a contract high at $8.44, while December futures hit $8.35, the highest for a nearby contract since December 2012. March HRW futures are slightly under last week’s contract high.

Live cattle futures are slightly higher and trading within tight ranges, while feeder cattle are lower.

• Cattle futures are continuing a sideways trade with the cash market yet to establish a clear direction and USDA’s next Cattle on Feed Report ahead Friday.
• Cash cattle trade so far this week has been subdued, with light sales at roughly steady prices compared with last week’s 4 1/2-year highs.
• Wholesale beef prices remain under pressure as record retail prices curb demand. Choice cutout values fell $1.07 yesterday to an average of $282.13, the lowest since $281.82 on Oct. 22.
• But limited supplies of market-ready animals foreshadow higher prices in 2022.
• USDA’s next Cattle on Feed Report is expected to show feedlot placements in October rose 2.2% from year-ago, based on a Reuters survey of analysts. The number of cattle on feed as of Nov. 1 is expected to decline about 0.2%.
• Bulls have a near-term technical advantage in live cattle, but a six-week uptrend on the daily bar chart is losing momentum. Chart levels to watch in December live cattle include yesterday’s high at $132.625, a 2 1/2-month high, and the 100-day moving average around $131.25.
• Feeder cattle are being pressured by the rally in corn futures.

Lean hog futures are lower in nearby contracts at mid-morning, with some deferred months higher.

• Hog futures are down in a mild corrective setback from yesterday’s surge to six-week highs. Weak cash fundamentals continue to weigh on the market, though possible stabilization in the CME lean hog index may limit declines.
• Pork cutout values plunged $6.16 yesterday to $87.77, as a $12.00 drop in bellies helped send the average to the lowest daily price since Feb. 10. Movement was relatively strong at nearly 387 loads.
• The lean hog index rose 16 cents to $76.33, up from a nine-month low. Carcass values on national direct markets fell 30 cents yesterday to $57.16.
• February hog futures rose as high as $83.25, under yesterday’s intraday high of $83.425, before pulling back.