The CME and Total Farm Marketing offices will be closed Monday, January 17, 2022 in observance of Martin Luther King Jr.
CORN
Corn futures saw limited movement overnight following the January WASDE report, which is historically one of the more volatile reports of the year for grains. Not so this year. Prices, this morning are trading 4 cents lower in the nearbys and firm in the deferred contracts. March corn, at 5.95 has slipped below the $6.00 threshold and Dec, at 5.59-1/12 remains above the pivotal 5.50 area. USDA left yield unchanged at 177 bpa, but raised acreage and the 2021 corn crop, as well as ethanol demand yesterday, but lowered exports. U.S. Dec 1 stocks were above the average estimate and year-ago. Talk of increased rains early next week in parts of South America that need moisture is helping weigh on row crop sentiment. We’ll see how the long fund traders react moving forward. Trade estimates for this morning’s USDA Weekly Export Sales are 500,000 to 1.50 mil tons versus 256,000 last week.
SOYBEANS
Soybean futures were softer last night with March and Nov beans down a dime to 13.88-3/4 and 13.92-1/2, respectively. March meal is down 4.40 to 411.80. Soyoil is mixed. USDA’s 5 mmt drop in Brazil’s crop was a record. Argentina’s crop was trimmed 3 mmt. Next week most of Argentina and South Brazil could see needed rains. Paraguay might miss the rains. Prices are now in limbo as traders adjust to the January crop report data. USDA did not raise U.S. soybean carryout, raised the U.S. 2021 soybean crop less than feared and dropped World soybean end stocks more than expected. Trade estimates for this morning’s USDA Weekly bean Export Sales are 400,000 to 1.20 mil tons versus 382,000 last week.
WHEAT
Winter wheat futures continued to slide overnight with nearby contracts (March) in Chicago down 6-3/4 cents to 7.50 and KC down 11 cents to 7.67. MPLS Spring wheat futures are unchanged at 9.20-3/4. As expected, USDA raised U.S. 2021/22 wheat carryout due to lower exports and feed use. Adding pressure is an uptick in World wheat ending stocks. USDA also raised U.S. 2022 winter wheat acres in NC, OH, KY, MO and slightly in IL, WI and NE. Declines were noted in GA, AR and MI. The agency lifted U.S. SRW 2022 acres higher than expected. Trade estimates for this morning’s USDA Weekly bean Export Sales are 150,000 to 400,000 tons versus 48,500 last week.
CATTLE
Cattle futures are called steady to higher. Selling pressure returned to the cattle market on Wednesday as cash disappoints. Light trade was still building with a range of $136-$138, $1-2 lower than last week. Beef carcass values maintain a higher trend. At at the close, Choice added 1.71 to 279.93 and Select was 2.35 firmer to 270.98. The load count was light at 152 loads. Feeder cattle were pressured by the weakness in the Live cattle market, and the concerns of the slaughter pace backing up supplies, limiting near-term demand. January feeders, at 161.875 expire on Jan 27th, and are closely tied to the cash index at 162.21. The cattle market is still trending higher overall, but near-term, prices are challenging support levels. The signs of a near-term low are not in place, and the tone in the cattle market will likely stay soft in the short term.
HOGS
Hog futures are called steady to higher. This morning’s USDA Weekly Export Sales could help provide some support or direction in hog prices for the end of the week. The technical picture in the hog markets stays weak as the market is concerned about limited production and the buildup of hogs supplies, but prices got some recovery on Wednesday. Feb and April contracts could be targeting a further downside move to 75.00 in Feb hogs, and support near 82.00 in April after some back and fill price action. Slaughter numbers were noticeably lower yesterday, estimated at 433,000 head, down nearly 30,000 from last week. The cash hog market values on midday direct trade were .48 higher than Tuesday, and the Lean Hog Index traded higher, gaining .43 to 75.13, and still holding a 3.720 discount to the futures. The spread will likely limit the near-term upside in the futures market. Pork carcasses were stronger at midday, and held most of those gains into the close. gaining 2.84 to 84.46. The load count was moderate to light at 309 loads. The deferred contracts traded higher on Wednesday, following the rest of the market. Longer-term prices are being pressured by a bearish reversal on the charts at the most recent highs, but the tighter hog supplies forecasted for the summer and later month should help support prices.
Author
Matthew Strelow