TFM Daily Market Summary 11-22-2021


The USDA Cattle on Feed Report released Friday last week brought very few surprises. Total cattle on feed as of Nov 1 was 99.8% of last year, or only 0.2% under last year. This was just slightly more than expected, which was 0.3%. Total cattle inventory was estimated at 11.948 million head, 398,000 more head than last month, but only 25,000 head compared to last year. The heavyweight cattle remain a concern, as total cattle on feed greater than 120+ days was 2.4% higher than last year. This larger number reflects the slower slaughter pace and limited marketings of cattle over the past couple months. This heavier number could be a concern going into the end of the year as ample cattle supplies seem available. It will still take a strong retail market and cash trend to push prices higher into the end of the year.


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CORN HIGHLIGHTS: Corn futures saw solid gains to start the week with prices 4-7 cents higher, as slip-over strength from the wheat market supports grains in general. Dec gained 6 cents closing at 5.76-3/4, and March added 7-1/4 cents to 5.84-1/4.

A strong double-digit move in the wheat market brought buying support to the corn market, as prices moved marginally higher. All three classes of wheat posted strong double-digit gains on supply concerns, and as a competing grain, corn also found some bid. Technically, corn futures tested and helped support on the 10-day moving average, closing near the top half of the trading range for the day. The strength at the end of the day could set the market up for additional follow through on the overnight session. On the demand news front, weekly export inspections were released on Monday, and inspections for last week were 618,000 mt. The U.S. export pace is current behind the pace from last year by 18%, but the true export window is later into the spring and summer months, so the market has time to catch up. Weather in south America is still a big focus. Brazil conditions are good; Argentina may be more questionable with La Nina forecast possibly being a factor going into the end of the year and 2022. The market and news front may stay quiet this week with the holiday trade but watch for increased volatility with Dec options expiration on Friday and first notice day for Dec futures on Nov 30, just around the corner.

SOYBEAN HIGHLIGHTS: Supported by soybean meal and soybean oil today, January settled 11 cents higher at 12.74-1/4, while November settled 5-1/2 cents higher at 12.56.

Soybean oil pushed 1.29 cents higher today from palm oil and canola prices pushing near all-time highs. Also pushing soybean oil higher is President Biden’s Build Back Better plan, advancing to the Senate. This includes close to 1 billion dollars of spending for biofuel infrastructure and extends biodiesel tax credit. All of this spilled over to let soybeans at least hold their ground and make minor gains for the day. Days like today are needed, as export demand continues to be lackluster, and China was once again quiet. Between US farmer selling being over 30% than this time last year and China’s buying slowing, it is feared US ending stocks may increase in the next report. Brazil’s crop is off to a good start with favorable weather ahead – 86% of the crop is planted. It is believed South American beans could be available as early as January and are at a discount to US beans. If China can hold out, they will move their business to Brazil. Current negotiations, or lack thereof, between the US and China are certainly not helping the situation.

WHEAT HIGHLIGHTS: The star of the grain market was once again wheat, starting in the overnight trade and not letting up for a minute throughout the trade today. Dec Chicago gained 22-3/4 cents closing at 8.45-3/4, just a couple cents off the new contract high. Similarly, KC wheat closed 27 cents higher at 8.61-3/4 and also set a new contract high.

KC wheat posted a close that hasn’t been seen in eight years. As we all are aware, US supplies are at their tightest in 14 years. News of another dry forecast for the southwestern Plains in the US helped to bolster prices. Global weather also was important, as more news of rains continuing to hit what was expected to be Australia’s record sized crop, continues to damper quality and production numbers – with more rain in forecast. Paris milling futures also put in contract highs today and spilled over into our markets, further pushing wheat prices. Russian export taxes increased to $78.50/mt and are expected to continue to climb as they fight food inflation internally. Once again, reports of increased presence of Russian troops near Ukraine’s border has added tension and concern to the wheat market. This afternoon the USDA will reports progress of winter wheat planting – some fear what’s remaining may go unfinished in eastern Midwest. Today’s grain inspections were nothing to be impressed by just a hair over 177,000 mt, but with supplies this tight, the market seems unconcerned over the weak export market currently.


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John Heinberg

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