CORN

Corn futures both eclipsed contract highs and traded below Friday’s lows overnight, setting up an ‘outside-day’ of trading to begin this holiday-shortened week that will spill over into next week.  March corn made it to 4.40 for the first time before slumping nearly a dime off that session high to 4.30-1/4.  A spike off in the dollar off of last week’s new 32 week low occurred last night which may have sparked some of the downward reversals seen in the grain and oilseed complex.  Weekend rainfall in Argentina rainfall was lighter than expected in some areas, but not by much, according to World Weather, Inc.  On Friday morning, World Weather, Inc. warned that the moisture would be welcome, but it would be gone in a few days and the nation would be as dry as it was late last week by the end of this coming week.  That forecast for this week has not changed.  The short term benefits to the moisture resulted, but much more rain must occur to restore soil moisture to normal and to ensure crop stress does not become more threatening to production a little later this month and in early January.  Weekly Export Inspections will be out today, and Weekly Export Sales will be moved up one day to Wednesday due to the holiday trading schedule later this week.   Managed Money is net long an estimated 305,000 contracts.

SOYBEANS

Soybean futures rallied 12 cents to new contract and multi-year year highs overnight on follow-through pushing Jan beans to 12.32.  The market then deflated and is down 4 cents to 12.16 as weather, movement in the greenback and tightening soy product supplies maintain a volatile effect on prices.  The next upside objective for the nearby contract is 12.39-3/4 as overbought stochastics create and a rebound in the dollar spills some of the wind out of the sails of the rally.  Brazil’s weekend rainfall was erratic, but some of the rain from Argentina moved into the far south late Saturday and Sunday morning and it was advancing to the interior southern areas.  Brazil weather over the next two weeks will become more typical of La Nina years meaning rain will fall more frequently from Mato Grosso, Goias and Tocantins to Minas Gerais, Sao Paulo and Parana.  Managed Money is net long an estimated 222,000 soybeans; 92,000 lots of soymeal; and, 107,000 soyoil.

WHEAT

Wheat futures fell back into the middle of their respective trading ranges overnight.  March Chicago and KC contracts shed 11 cents, and MPLS spring wheat 5.  Managed Money was net long an estimate 11,000 SRW wheat contracts heading into last night’s trade.  Zero export tenders were reported overnight, but news wires reported China sold 593,161 tonnes of wheat, or 14.75% of the total offer, at an auction of state reserves last week, according to the the National Grain Trade Centre.  The volumes sold at the auctions have declined steadily since October, as demand for use of the grain in animal feed has eased.

CATTLE

Cattle calls are mixed for today.  Friday’s Cattle on Feed report was deemed neutral for the market.  The ‘On Feed’ number came in as expected at 100.  ‘Placed’ in November was 91; and, ‘Marketed’ in November was 98.  This is the second month of placement declines pointing to less fed cattle in the coming year.  Few cash sales last week at $108/cwt were enough to move the needle on a trend heading into this week, but may be enough to underpin the Dec live cattle contract which closed 1.12 higher on Friday to 110.47.  Choice carcasses finished mixed at 208.63 and Select was up .57 to 194.27. Wholesale values seemed to be finding some stability.   Feeders have a mixed outlook amid talk of firmer cash markets and technical buying supporting futures.  The tight Placement numbers will offer lingering support.

HOGS

Lean hog calls are steady to lower after failing to push through resistance during this weak trend.  The nearby Feb contract is consolidating around the 65 to 66 range versus the CME Lean Hog Index at 64.39.  Meanwhile, heavy pork production and large slaughter runs continue to act as a wet rag over the trading ranges.  Last week’s slaughter pushed 2.7 million head and production was back over 600+ million pounds.  Retail values closed lower on Friday down 1.75 to 71.47.  This will pressure the prices on the open. Pork Product index is trending sideways to lower, having closed down 1.38 on Friday to 75.81.  The Quarterly Hogs and Pigs report on the 23rd this week will be key for 2021 markets contracts.

Author

Matthew Strelow