CORN
Corn futures were firm overnight after closing with modest gains on spillover strength from a higher bean market. Dec corn is up 3 cents this morning to 5.57-3/4, mid-range of yesterday’s 16-1/4 cent trading range. Tuesday’s higher close ended a five day losing streak. USDA pegged the 2021 corn yield at 177 BPA marking a .50 bushel increase from October raising the crop size to 15.062 bil bu versus 15.050 bil bu expected. In addition, carryout rose to 1.493 bil bu versus 1.480 bil expected. The agency also estimated world ending stocks at 304.4 mmt versus market expectations for 300.80 mmt. Weekly Ethanol Stats will be out today with production seen lower than last week at 1.097 mil barrels per day. The Stockpile average estimate is 20.368 mil bbl vs 20.129 m a week ago which would be the highest in nine weeks.
SOYBEANS
Soybean futures were mostly unchanged overnight with a weaker tone. Jan beans are off 2 cents to 12.10. In Tuesday’s report, USDA forecast 2021 U.S. soybean yield at 51.20 BPA, down .30 BPA from October, thus lowering the production estimate from 4.484 bil bu to 4.425. 2021/22 carryout was trimmed to 340 mil bu from 362 expected. The agency also estimated world 2021/22 ending stocks at 103.7 mmt vs 105.50 expected. The data elevated bean meal contracts to new highs for the move and pushed beans to double-digit gains the USDA caught some traders off guard and unexpectedly trimmed yields, prompting the biggest price surge in weeks. The outlook for U.S. soybean exports were lowered and maybe overdue with sales lagging expectations, especially to China. Overnight, Chinese Ag futures (JAN 22) had Soybeans up 131 yuan ; Soymeal up 34; Soyoil down 2; Palm oil up 30; Corn up 16; Malaysian palm oil prices were up 128 ringgit (+2.67%) at 4920 advancing the most in four weeks, countering a bearish inventory report, as investors anticipate a brighter export outlook this month and weaker production in second-largest grower Malaysia.
WHEAT
Winter wheat futures are mixed this morning. Spring wheat contracts are up 5 to 9 cents with March up 5 to 10.18-1/4. The complex is underpinned by a number of factors in this inflationary climate. U.S. reserves are tighter and European wheat inventories are running precariously low. Most recently, USDA said on Tuesday that the 2021/22 world wheat ending stocks were lowered even further to 275.80 mmt vs their 277.20 mmt figure from October. The market had been looking for 276.50 mmt. 2021/22 U.S. wheat carryout did come in at 583 mil bushels vs its 580 mil bu figure from a month ago. In outside markets, the dollar rose 25 points overnight while creating some headwinds for an otherwise healthy bull wheat complex.
CATTLE
Cattle market calls are for more choppy trade after yesterday’s mixed session. December live cattle settled at 132.20 while maintaining an uptrend above the contract’s 100-day moving average. The near-term upside objective is 133.02 once the next area of resistance at 132.67 is breached. Talk of sustained demand for higher priced beef as we approach the holidays keeps a bid under the market for this week. Packers purchased the few available cattle at $130/cwt amid bids of up to $130.50. Asking prices range from $132-135 depending on region and cattle type. The online exchange featured a Tuesday sale with no lots selling.
HOGS
Hogs are called steady to lower as the trade view lower pork product prices and weaker cash markets as weighing factors. On addition, slow exports create a bit of a log-jam of pork for the marketplace to work through. The prospects for China’s hog feed needs and broader economic outlook remain uncertain. A seasonally high slaughter pace will compete with the cheaper pork prices. December hogs futures plunged to a close of 74.95 on Tuesday and look to be consolidating in last week’s lower trading range. First support for the contract lies down at 74.20, while the next area of resistance rests around 75.70.
Author
Matthew Strelow