TFM Midday Update 12-09-2021

CORN

Mar corn up 2-1/4 @ 5.89-1/4
Expectations for only minor changes on today’s WASDE report, but for corn carry out to be slightly reduced.
Strong weekly ethanol production report supports the corn market as last week’s production moved to a 5-week high and challenging all-time weekly production levels.
Expectations are for an additional adjustment higher in corn for ethanol demand on the USDA report.
USDA Weekly export sales reported: Net sales of 1,132,500 MT for 2021/2022 were up 11% from the previous week and 2% from the prior 4-week average. Still neutral overall for corn.
Technical picture stays strong as corn futures continue to push to a high over the previous day and showing strong price action. Mar at 5.96 will be key resistance.

Jan soybeans down 8 @ 12.53
Soybean futures pricing in a possible increase in carry out on today’s USDA reports
USDA weekly export sales reported: Net sales of 1,637,900 MT for 2021/2022 were up 54% from the previous week and 27% from the prior 4-week average. Still trailing last year’s pace and pressuring the market.
Private exporters reported sales of 280,000 mt of soybeans for delivery to unknown destinations, split evenly between the 2021/22 and 2022/23 marketing years. This is the 10th consecutive day of announced soybean sales.
Brazil CONAB raised expected soybean production to 142.79 MMT vs 142.01 MMT on their November report.

Mar wheat down 13 @ 7.80, Mar KC down 13 @ 7.99, Mar MNPLS down 12 @ 10.23
No major changes expected for wheat on today’s WASDE report, but the market will be watching global supply trends.
USDA weekly export sales reported: Net sales of 239,900 MT for 2021/2022 were up noticeably from the previous week, but down 27% from the prior 4-week average. Totals neutral to bearish for U.S. wheat prices.
Potential for improved rainfall chances in southern Plains helping pressure the market.
Additional technical selling as prices are challenging key support at the 7.80 level for Mar wheat.

Feb LC down 0.725 @ 137.925 & Mar FC down 0.950 @ 165.000
Weakness of boxed beef contrasts with higher cash potential
Cash market is slow to develop, which is causing some pause in the market.
Weak retail values are concerning as boxed beef prices are moving lower counter-seasonal. A weak retail tone may limit gains in the cash market.
Cattle slaughter projected at 122K
CME Feeder Cattle Index for 12/8: up 0.20 @ 161.16 and running a discount to the feeder futures prices.

Feb hogs up 0.750 @ 76.800 & Feb pork cutout up 1.125 @ 83.900
Futures trying to find some footing after challenging key lows yesterday, supported by firming retail prices.
Cash markets are still not supportive of prices and limit near-term rallies.
Increased weights may be due to supply backup
Overall premium of the futures market to cash market is concerning and may keep selling pressure active in the near term.
CME Lean Hog Index for 12/9: down 0.11 @ 70.83

John Heinberg