CORN
Corn futures were unchanged overnight. Look for choppy trade to continue until USDA comes out with the December WASDE report at 11:00 AMD CT today. USDA estimates U.S. total 2021/22 corn production at 16.323 bil bu vs 16.055 last year. Total demand is estimated near 14.830 bil bu vs 14,819 last year. This suggests carryout near 1.493 bil bu vs 1,236 last year. Trade estimates for today’s report average 1.487 bil bu. The actual carryout could be closer to near 1.343 bil bu. We’ll get Weekly Export Sales at 7:30 AM with trade estimates ranging from 600,000 to 1.40 mil tons. Yesterday, the USDA confirmed private sales of 1,844,040 tons of U.S. corn to Mexico, including 1,089,660 tons for delivery in the 2021/22 marketing year that began Sept. 1 and 754,380 tons for delivery in 2022/23. U.S. ethanol output last week hit a five-week high of 1.09 mil bbl/day, among the best weeks on record. Stocks ticked up for a 3rd week, though implied weekly ethanol usage is in line with prior years, as is gasoline demand. Outside markets are mixed with the dollar up 22 points after yesterday’s drop; crude down 58 cents and stock index futures down 120 points ahead of jobless claims data.
SOYBEANS
Soybean futures were down a nickel overnight to 12.56 (Jan). Meal prices are firm this morning and soyoil oil weaker. USDA estimates U.S. 2021/22 soybean supply near 4.696 bil bu vs 4.761 last year. Total demand is estimated near 4.356 bil bu vs 4,505 last year. This suggests carryout near 340 vs 256 last year in today’s Dec WASDE repprt. The agency could drop demand 100 mil bu and increase carryout to 440. Actual trade estimates average 352 mil bu. Trade estimates for Weekly bean export sales are 1.0 to 1.70 mil tons. Overnight, Chinese May bean futures were down 37 yuan; Soymeal up 43; Soyoil down 94; Palm oil down 132; Corn down 8. Malaysian palm oil prices overnight were down 63 ringgit (-1.30%) at 4778 a drop as traders weighed the tropical oil’s competitiveness against rival soybean oil and prospects for weaker demand.
WHEAT
Winter wheat futures broke near-term support overnight, slipping below a week’s worth of daily lows on losses of 10 to 15 cents. March Chicago and KC wheat are trading at 7.83 and 8.02, respectively. March MPLS spring wheat futures are mostly unchanged at 10.35. USDA estimates the U.S. 2021/22 supply near 2.606 bil bu vs 2.957 last year. Total demand is estimated near 2.023 bil bu vs 2.111 last year. This suggests a carryout near 583 mil bu versus 845 last year. HRW carryout is 299 vs 428 last year, SRW 93 vs 85, HRS 127 vs 235 and white wheat 46 vs 70. The key will be U.S./World 2022/23 supply and demand. Some look at U.S. 2022 wheat crop near 2.080 bil bu and carryout near 940. Trade estimates for Weekly Export Sales are 50,000 to 400,000 tons. Argentine farmers are expected to harvest 22.1 million tons of wheat in the 2021/22 season, the Rosario grains exchange said in a report on Wednesday, citing better than expected yields as the reason for increasing its previous 20.4 million ton estimate.
CATTLE
Cattle futures are called steady to lower as the disappointing trend in retail values pressure the market. Technically, cattle charts are still in consolidation, posting a series of higher highs and lows, building a flag pattern. The short-term demand concerns have limited the market’s rally potential. Boxed beef values were lower at midday and prices stayed weak into the close. Choice carcasses lost 3.92 to 264.11 and Select was 2.59 lower to 253.09. The load count was light to moderate at 161 loads. The Choice/Select spread is trading at 11.02. The tighter range reflects some of the demand limitation for Choice beef. The cash market remains very quiet with only a few scattered bids on the table Wednesday afternoon. Asking prices are around $144 to $145 in the South, and $224 to $225 in the North. Significant trade volume looks like it will be holding off until today or tomorrow. The overall weakness in cattle markets kept the buyers on the sidelines for the feeders as well. The seasonality makes the market cautious and the price action has signaled a near-term top.
HOGS
Hogs are called steady to higher. The USDA will release weekly export sales this morning, and this could be a factor going into the end of the week. The market is in a sideways, choppy trading pattern, while building a large wedge formation on a longer term basis. The price break this week is moving prices back towards the bottom of the range, moving into an oversold condition. Hog futures traded lower again on Wednesday on technical selling, as demand concerns have pushed prices to their lowest point in a month. The futures market still holds a premium to the cash markets, which makes the market vulnerable to additional selling pressure. Cash markets remain soft as midday national direct cash prices were 2.66 lower on the afternoon report. Lean Hog Cash Index was slightly higher, gaining 0.16 to 70.94. Dec hogs have pulled in line with the Cash index, but Feb is still over 5.00 premium. Pork cutout values have been choppy and Midday values helped support prices, gaining 5.82, and prices firmed into the close with Pork values gaining 9.35 to 90.44. The load count was moderate at 412.
Author
Matthew Strelow