CORN

Corn futures were off a penny overnight influenced by a retreat in the bean complex.  Nearby corn futures have been consolidating in the 4.20 to 4.25 price area since the beginning of December, so look for more choppy, two-sided trade for the foreseeable future until the market finds enough bullish news to push beans through $12.  There is also a large amount of potential new investment funds to buy commodities if demand increases.  Some still feel that 2021 corn prices need to trade higher for U.S. farmers to increase 2021 acres to satisfy demand.

SOYBEANS

Soybean futures were down a nickel overnight in a ‘turn around Tuesday’ reversal from higher closes yesterday.  Jan beans, at 11.64-1/2 traded a 10 cent range between 11.72 and 11.62 while respecting the contract’s 20-day moving average as the market awaits the next test of the $12 resistance ceiling.  South American weather remains a driving force for prices, but as long as parts of the growing regions continue to get rain, the up-trend remains stalled.

WHEAT

Winter wheat futures saw a technical bounce to the tune of 5 to 6 cents after taking back all of Friday’s rally yesterday.  The recent price action has put prices squarely back into the middle of their ranges.  While prices react to Russian export news, traders are also heeding technical boundaries as evidenced by the failure for prices to move up and through 6.20 resistance in March Chicago wheat.  March KC has formed a triple top near 5.90.  Mpls spring wheat contracts are following suite above their longer-term moving average support levels.

CATTLE

Cattle futures are called steady to slower inspired by yesterday’s quiet trade.  Cash trade was undeveloped on Monday and will likely hold off until the end of the week.  Expectations are for mostly steady cash this week.  Showlists for cattle are looking smaller than last week. Weak retails will weigh on prices.  Choice carcass finished 4.19 lower to 209.69 and Select was down 3.41 to 192.30, falling further from midday levels.  Good support should be in the $200-210 range.  Moderate movement was seen at 177 loads.  Feeders are called mixed, looking for direction overall.  Prices pushed back above the $140barrier, which should be supportive technically.  The next Cattle on Feed report on Friday will likely keep the market choppy this week. 

HOGS

Lean hog calls are steady to higher after seeing rebound yesterday from Friday’s weak trade.  The market is holding the November lows and the 200-Day Moving average under the Feb Contract, so we may see some additional short covering today.   The Dec hog contract went off the board yesterday at 64.900 up .225.  Front month hogs are technically weak in the big scheme of things, but fundamentals are still weak led by heavy pork production and large slaughter runs. Monday’s slaughter stayed heavy at 497,000 head and estimated weekly slaughter last week was 2.77 million including Saturday’s kill. Total production last week at 607 million pounds, about 2% above last year.  The CME Lean Hog Index was lower by.26 to 65.35.  Focus will stay honed in on the margin between the index and the Feb contract now after Dec Expiration.  Retail values closed lower on Monday down 2.68 to 77.03, as retail carcasses are consolidating around the $80 area.  Product movement was moderate at 301 loads.  Price stability in the $75 -$80 level may help support futures. 

Author

Matthew Strelow