CORN
Corn futures were mixed overnight and are up a penny this morning. Dec corn has retreated since rallying more than 40 cents the two previous week and is trading at last week’s lows at 5.54 to start this week ahead of tomorrow’s monthly USDA Supply/Demand report. The WASDE data is expected to keep Ending Stocks near the 1.50 bil bu mark. Many view both yield and demand increasing. Support for Dec at 5.50 may be a pivot point until the 11 AM (CT) release of the report. For today, Weekly Export Inspections and Harvest Progress numbers will come out. Basis values for soybeans and corn shipped by barge to the U.S. Gulf Coast were steady to slightly weaker on Friday in subdued trade as farmers in the Midwest moved into the late stages of the harvest, traders said. In South America, favorable conditions for establishment of row crops are seen in Brazil, while, showers benefit corn planting and establishment in Argentina.
SOYBEANS
Soybean futures were mostly unchanged overnight while settling in at Friday’s lows. Jan beans are fractionally lower at 12.04-3/4. A close below the October 13 low of 11.95-3/4 threatens to break the back of the bean market as a longer term down-trend forms. Meal is flat this morning, soyoil firm. Soybean ending stocks are expected to see a jump in tomorrow’s report and with non-threatening weather reports from Brazil, the fundamental picture looks a little bleak in the short term. That being said, the pivot off the low from a couple of weeks ago mixed with the short-covering trend from managed money traders gives credence to the argument that some solid bottoming action took place. Overnight, Chinese Ag futures (JAN 22) Soybeans were down 88 yuan ; Soymeal down 16; Soyoil down 340; Palm oil down 382; Corn up 14. Malaysian palm oil prices overnight were up 15 ringgit (+0.31%) at 4895 tracking losses in rival edible oils, as investors fretted about dwindling demand that could push up inventories in Malaysia.
WHEAT
Wheat futures are firm this morning with Dec and March Chicago contracts up a nickel to 7.71-31/2 and 7.84-3/4, respectively. The continuous Chicago wheat chart has hit its highest level since December 2012, so far this month. Dec KC wheat is up 3 to 7.81-3/4. March is up 3-1/4 cents to 7.85-3/4. Dec MPLS future are up 5-1/4 cents to 10.14-3/4. March is up 5 to 10.00-1/4. Tomorrow’s WASDE report isn’t expected to hold any major surprises for the wheat market but given the recent strength, prices look to remain buoyant. Spot basis bids for HRW wheat held steady at truck and rail market terminals across the southern U.S. Plains on Friday, grain dealers said.
CATTLE
Cattle futures are called steady to higher. February live cattle closed Friday at overhead resistance at $137 level and fail to get through, but the high end of the range close should support the market on today’s open. Cash trade saw some additional movement on Friday, and prices trended higher. Southern live deals were completed at $130, $4 to $5 higher than the previous week’s weighted averages, and $2 higher than business earlier in the week. Northern dressed trade was mostly $204, $4 higher than the previous week’s weighted average basis, and $2 higher than the rest of last week’s deals. For beef retail values, seasonal demand provided a boost to the market with the Choice cutout increasing $5.33 and Select increasing $5.58. Firmer asking prices and continued consumer interest are expected to keep prices steady to higher in the short term. The improved fundamentals support the futures market, and with price closing near the top of the range top should led to additional buying support to start the week.
HOGS
Hogs are called mixed. Hog futures experienced spread selling pressure in the front half of the market as well as pressure on cash, and available supplies. Hog charts are trying to build a near term uptrend, as prices have moved off the lows from earlier last week. Friday’s trade saw some back and fill, testing support under the market. Overall cash markets remain soft, and the Cash Hog Index lost 2.38 on the week. The overall tone stays weak, but prices on the cash market are pulling in line with last year and multi-year averages, bringing some optimism that a floor could be in the cards near-term. Retail pork carcasses closed lower on Friday, dropping 1.34 to 96.35. The load count was moderate at 304 loads. Pork carcasses found some footing last week and trended higher. More strength will be needed to support the market.
Author
Matthew Strelow