CORN
Corn futures were firm overnight after sliding the past five days. Dec corn traded a high of 5.56-1/2 last night and low of 5.50-1/4 with 100-Day Moving Average support drawn at 5.43-1/4. Monday afternoon’s Weekly Crop Progress report showed 84% of the crop harvested versus 74% a week ago. Today’s USDA Supply/Demand report is widely expected to see an increase in production and decrease in Ending Stocks. Actual trade estimates for the U.S. corn crop is around 15.050 bil bu or up 31 mil bu from USDA October guess. This week, one private crop group raised their crop guess 180 mil bu. The trade estimates U.S. 2021/22 corn carryout near 1.480 bil bu vs USDA 1.50. Some are closer to 1.30 bil bu due to higher demand.
SOYBEANS
Soybean futures were mostly unchanged overnight with nearby contracts fractionally higher within 4 cent trading ranges. Jan beans are up 3/4 cent to 11.89-1/4. Meal and soyoil contracts are firm, too. Monday afternoon’s Weekly Crop Progress report showed 87% of the crop harvested versus 79% a week ago. Trade estimates for the U.S. soybean crop in today’s WASDE report is 4.484 bil bu, up 36 mil bu from USDA October guess. This week, one private crop group raised their crop guess 50 mil bu. Trade estimates for U.S. 2021/22 soybean carryout is near 362 mil bu vs USDA 320. Some are now over 500 mil bu due to estimates of lower U.S. soybean exports. Overnight, Chinese Ag futures (JAN 22) Soybeans were down 58 yuan ; Soymeal up 7; Soyoil down 72; Palm oil down 50; Corn up 18. Malaysian palm oil prices overnight were down 103 ringgit (-2.10%) at 4792 due to weak soybean oil prices and expectations that Malaysian stockpiles will rise. Chinese soybean purchases out of Brazil jumped 35% on the year as the main global soybean importer turned to South America to cover its spot demand amid logistic disruptions and delays in the U.S., according to AgriCensus.
WHEAT
Wheat futures are firm this morning while looking to complete a downward price correction from contract highs. March CBOT wheat is trading a nickel higher this morning to 7.73. March KC is up 3 to 7.83-3/4; And March MPLS is up 7 cents to 10.15-3/4. Monday afternoon’s Weekly Crop Progress report showed 91% of the winter wheat crop planted in the U.S. versus 87% a week ago. Dry conditions in the Black Sea region despite some recent showers adds to concern for low U.S. wheat supplies this year along with a drought in the southwest Plains. A weaker U.S. dollar index is also supportive. No significant changes are expected in today’s monthly WASDE report. Trade estimates for U.S. 2021/22 wheat carryout is near 581 mil bu vs USDA 580. Some are closer to 620 mil bu due to lower exports. Trade estimates World wheat end stocks near 276.5 mmt vs 277.2 in October and 288.3 last year.
CATTLE
Cattle market calls are mixed. We saw some follow through buying after last week’s firm close, and the anticipation of higher potential cash supported the market. Cattle trade was disappointing overall, especially given the strength at the end of the week last week. The futures market may have a “show me” mentality before pushing prices higher. Technically, charts are still in a near-term uptrend. February live cattle struggles with resistance at $137 area, and failed to get through. The close was soft, but with a USDA report coming today, traders may be cautious. Cash trade was undeveloped on Monday with the expectation is for some follow through higher trade later this week after last week’s strength. Retail carcasses are trending higher, but at the close retail values were mixed as Choice carcasses lost .89 to 288.65, but Select added 1.08 to 268.60. The load count was light at 103 loads. One concern is the impact of the higher retail beef costs to the consumer. With both pork and chicken cheaper on a relative basis, beef demand could be affected.
HOGS
Hogs are called mixed. Hog futures saw choppy, mixed trade to start the week, looking for direction. December hogs futures started the day firm, but slipped to fill the price gap from 11/3, while testing support on the 20-day moving average. From here, prices could be poised to go either direction. Most likely, the cash market will truly be the leader. Overall cash markets remain soft, but prices are back to historical levels, and that could build some support. The Cash Hog Index reflects that and has been trading lower, but turned firm Monday, gaining .37 to 78.69. This was the index’s first higher close going back to early October, maybe signaling a support level in the cash market. The index has built a slight premium to the December futures, trading 2.315 over the futures, thus providing support. Retail pork carcasses were stronger at midday trying to build off last week’s strength, but closed well off early session gains as Carcasses were 1.49 lower to 94.86. The load count was moderate at 337 loads.
Author
Matthew Strelow