CORN
Corn futures were quiet overnight within 4 cent trading ranges. Dec and March contracts are off a penny this morning to 5.75-1/2 and 5.83, respectively as the dollar surges to new highs. Monday’s USDA Weekly Crop Progress showed: Corn harvest 91% complete vs 84% last week, and 94% a year ago. The short-term momentum in corn remains higher after the market found support following last week’s report, bouncing off the old resistance line near the 5.50 mark (Dec). 5.82 has been the high close this month so far and should be watched as short-term resistance. Fundamentally, harvest of the potentially record-yielding crop is nearing completion and both ethanol strength and the uptick in China’s corn prices are seen as bullish factors. The breakout higher in the dollar index, however, is a potentially negating factor this week.
SOYBEANS
Soybean futures were down 2 to 3 cents overnight putting The nearby Jan contract at 12.54.-1/4, just shy of its 50-day moving average. Front month meal contracts are firm amid a potential shortage of lysine, which could increase soybean meal usage, thus supporting the market. Soybean meal futures posted another sharply higher trade yesterday with the December contract pushing back over $370. This contract is now more than $60/ton off its low from a month ago and trading where it was in mid-July. Soybean oil futures are higher this morning while consolidating after weakening at the beginning of the month. Chinese Ag futures overnight had Jan 22 Soybeans down 56 yuan ; Soymeal up 28; Soyoil down 4; Palm oil up 76; Corn up 17. Malaysian palm oil prices overnight were up 21 ringgit (+0.42%) at 4987 as a jump in Malaysian exports stoked optimism over stronger demand from key regions including India, China and Europe. Monday’s USDA Weekly Crop Progress showed: Soybeans at 92% harvested vs 87% last week, and 95% a year ago. Also, NOPA members crushed 183.993 million bushels of soybeans in October, up from 153.800 million bushels crushed in September but below the 185.245 million bushels in crushed October 2020. The October crush, which was the third highest monthly total on record, reflects the withdrawal of one NOPA member from reporting, the group said.
WHEAT
Wheat futures are moderately lower this morning as a rising dollar creates headwinds for the recent rally. March Chicago is down 3-1/2 cents to 8.22-3/4. March KC wheat is off 4-1/4 cents to 8.31-3/4; And, March MPLS futures are down 8-1/2 cent to 10.18. While the December Chicago wheat contract hit a new high to start the week, KC wheat held small gains but held beneath last week’s peak while spring wheat saw double-digit losses. As Chicago prices sit at 12-year highs, it is tough to know what kind of further upside potential is possible. World stocks have tightened and wheat futures have been tied to the overall inflationary trend, but this move has been extensive and impressive. Monday’s USDA Weekly Crop Ratings showed: Winter wheat 46% G/E vs 45% last week, and 46% a year ago; Winter wheat planted 94% vs 91% last week, and 96% a year ago; Winter wheat emerged 81% vs 74% last week, and 84% a year ago.
CATTLE
Cattle futures are called steady to lower. Live cattle futures had a mixed trade to start the week, looking for some overall direction while holding a narrow trading range. The cattle markets technically are still in a near-term uptrend, but prices may be limited in the near-term by price resistance, and may be challenging the bottom of the range. Seasonal demand softness will be a concern as the market moves into and past the Thanksgiving Day holiday, and the possible softening in the cash market into the end of the year. It was a typical Monday in cash trade, with both bids and asking prices undefined. Expectations are for steady to higher trade again later this week. Midday retail values were softer, and that could be a limiting trend to keep cash markets in check. Retail beef held the weakness into the close as Choice carcasses lost 1.10 to 283.20 and Select fell 2.25 to 267.28. The load count was light at 112 loads. The overall trend in retail values was softer the Choice grade beef, which help limit gains. The Choice/Select spread has begun to tighten, trading at 15.92 at the close, which may be reflecting a softening demand tone for the Choice beef product. The feed cash index lost .41, to 155.06, holding the Nov contract in check. Softness in the grain market is helping the deferred contract prices.
HOGS
Hogs are called mixed following slight weakness in the front end of the market Monday, but longer-term support in the deferred contracts. Prices could be watching the news for direction on the early part of the week. The February hogs are challenging resistance of the 200-day moving average, right at the trade day close. Trendline resistance is over top near $83.00, as well as the 100-day moving average. The high-range close on Feb opens the door for a possible test of this window. Retail values have been trying to find some stability. Pork carcasses were 7.49 higher, but failed to hold those gains, closing .78 lower to 93.83 with a moderate load count at 312 loads. Overall cash market remains soft, but prices are back to historical levels, and that could build some support. The Cash Hog Index slipped 1.27 to 76.68. The index has built a slight premium to the December futures, trading 1.1950 over the futures, but the gap narrowed and the weak cash market limited gains in the front month. Retail fundamentals are possibly improving, now it is up to the cash market to follow as the charts try to build and uptrend.
Author
John Heinberg