CORN

Corn futures made new highs overnight amid minor gains.  March corn hit 4.41-1/2 and eased to an overnight session low of 4.37-1/4.  Export shipments were sluggish yesterday, but the pace is still on track to reach the USDA projection.  Overseas purchases by China have surged, exceeding an annual corn-import quota set by the World Trade Organization for the first time ever, according to Bloomberg news.  Market conditions reached a degree of high volatility to begin the week in the wake of word of a new strain of the COVID virus in the United Kingdom and talk that the new virus may be able to be controlled by current vaccines. The kneejerk reaction to outside markets, a spike in the dollar and drop in stock indexes, sent ripples through the commodity sector.  For row crops, outside trading ranges were the result, but, all in all, trends were kept intact.  Overall, the resumption of the rally in the bean complex the past few days means corn futures need to maintain their steady up-trend to ensure higher U.S. 2021 acres.

SOYBEANS

Soybean futures kept the rally alive overnight, gaining 10 cents before trimming gains.  The new contract high for Jan beans now stands at 12.52-1/4.  With the 12.50 milestone achieved, prices are likely to become choppy heading into the holiday-shorted trading schedule.  From a technical standpoint, the entire bean complex has risen to overbought territory which would support a pullback if price reversals are sustained into the end-of-day trading.  There is plenty of news to sort out, uncharacteristic for this time of year:  A supportive fundamental balance sheet, clouded by South American weather is met with COVID concerns and deciphering details of the latest aid package on the table that includes around $13 billon for the Ag sector.  Brazil’s crop weather will remain good from center west to center south through the next couple of weeks with net drying in the far south and in a few far northeastern crop areas.  A few more showers should be thrown into Argentina’s forecast for next week, but no generalized rain is likely.  Overall, Argentina will continue on a ten-day bout of restricted precipitation and rising crop stress (except in the far west).

WHEAT

Winter wheat futures traded two-sided overnight, including new 1 to 1-1/2 week highs.  Prices are respecting near-term moving average support, including the 50-day while largely consolidating.  Uncertainty concerning Russia’s 2021 export policy is viewed as supportive for World wheat prices.  However, turmoil in the UK over COVID and travel policies enacted in places like France where all truck activity has been halted is keeping global Ag markets like wheat on edge.

CATTLE

Cattle calls are for steady to higher trade, except for possibly the nearby Feb contract.  Support stems from strength in the retail sector.  Choice carcass finished 2.29 higher to 210.92 and Select was up 2.99 to 197.26 with a moderate load count at 110.  Wholesale values seemed to be finding some stability, too.  Feeders see higher potential as the strong cash markets and technical buying supports futures.  In addition, the tight Placement numbers in Last week’s COF numbers support of Feeder prices.  Cash markets are undeveloped.  We expect results by tomorrow due to the holiday week.

HOGS

Lean hog calls are mixed ahead of Wednesday’s Quarterly Hogs and Pigs report.  The technical trend remains soft, but prices are trying to push through overhead resistance.  Fundamentals need to improve, though.  The Pork Product index is trending sideways to lower, slipping 3.21 on Monday to 74.06; and, the CME Lean Hog Index was lower by .67 to 63.72.  Feb hogs, at 65.92 is trading over the index.  Heavy pork production and a large slaughter run also limits upside potential. 

Author

Matthew Strelow