CORN
Corn futures were quiet overnight and are virtually unchanged this morning. Prices softened yesterday amid new highs in the dollar, which is up again this morning. As U.S. harvest of a potentially record crop nears completion, parts of OH, MI and northern IN are delayed due to recent rains. Spot basis bids for corn and soybeans held mostly steady in the U.S. Midwest on Tuesday and dealers reported slowing grain movement as the harvest wound down in the heart of the Corn Belt. For now, March corn, at 5.71-3/4 is trading at the lower end of Tuesday’s range and above 10-day moving average support at 5.73-1/2. Weekly Ethanol Stats will be out today, Exports tomorrow. Ethanol output and stockpile projections for the week ending Nov. 12 are seen higher than last week at 1.058 mil barrels per day with stockpiles average estimate at 20.441 mil bbl vs 20.286 mil a week ago. This would be the highest since August. The USDA confirmed private sales of 270,000 tons of U.S. corn to Mexico for shipment in the 2021/22 marketing year.
SOYBEANS
Soybean futures regained Tuesday’s losses overnight, advancing 6 cents to 12.57-1/4 in the nearby Jan contract. The contract is straddling the 50-day moving average while facing technical resistance at the November daily highs. Meal and soyoil are firm, too. Meal contracts succumbed to strength in the dollar yesterday and is now looking toppy after surging past the 200-day moving averages to start the week. The Dec futures contract achieved the move past that milestone for the first time since July. Soybean exports remain sluggish, running 33% behind year-ago levels. Chinese Ag futures overnight had Jan beans down 40 yuan ; Soymeal down 5; Soyoil down 10; Palm oil up 22; Corn up 9. Malaysian palm oil prices overnight were up 111 ringgit (+2.32%) at 4899 buoyed by rising edible oil prices in Chicago and Dalian as well as anticipation for robust export demand to last through November.
WHEAT
Wheat futures are firm this morning with all three exchanges posting 3 to 4 cent gains after a pullback on Tuesday. Resistance from a breakout to the upside in the dollar will likely keep the wheat rally in check. A three day reprieve in the MPLS wheat market adds pressure to the complex. Meanwhile, underlying support from higher Russian wheat prices promise to buoy the market. Ukraine’s wheat crop may decline to 27.1 mil tons in 2022 from 31.9 mil tons this year due to challenging weather, consultant SovEcon said in an emailed note. Canadian wheat acreage may climb about 6% in the coming season and durum up 10% due to tight global supplies and prospects for favorable returns, said Tony McDougall, deputy director of the grains and oilseeds division at the country’s agriculture ministry. Canadian crop production was hit by a major drought in 2021. March CBOT wheat is at 8.24 this morning. KC wheat is at 8.25-3/4. March MPLS wheat is at 10.20.
CATTLE
Cattle futures are called mixed as prices consolidate in a narrow 2-week trading range. Feb live cattle traded an inside day Tuesday and settled at 136.10. USDA will release the November Cattle on Feed report on Friday, so look for more choppy trade. October placements onto feedlots are expected to rise year-over-year to 2.24 mil head. Placements were down 2.9% year-over-year in September. The feedlot herd as of Nov. 1 is seen falling by 0.3% y/y to 11.94 mil head. Marketings are seen falling 3.8% which would mark a fourth straight year-over-year decline. November feeders, at 155.65 are looking soft amid strong grain price scenarios. The Cash index rose .37 to 155.43 and will provide some support for the futures contract.
HOGS
Hogs are called steady to higher following a significant price jump on Tuesday. Dec hogs, at 77.72, are back within reach of the contract’s 200-day moving average drawn at 78.94. Farther up, trendline resistance lies near 83.00 for the contract. The following contracts shot higher in an impressive breakout to the upside including strong closes. This could lead to some follow-through once the market gets warmed up today. Mid-day retail values on Tuesday firmed up, and Pork carcasses rose 7.49 to 102.20 with a load count of 164. The Cash index lost 1.27 to 76.68 while maintaining a 1.195 premium to the Dec contract.
Author
Matthew Strelow