TFM Daily Market Summary 12-01-2021


The export market for U.S. beef has stayed strong throughout 2021.  According to USDA data release for the month of September, total U.S. meat exports were down slightly from last year, but for the year, total exports were up 637 million pounds, or 4.8%.  The largest portion of this increase was tied to the strong demand for U.S. beef compared to other proteins.  For the year, beef exports are up 20.9% over last year, and well ahead of the 5-year average.  This totals 445 million pounds of total beef export through September.  Beside improved interest from our regular buyers, the impact of the Chinese buying has been noticeable.  China has quickly moved from a minimal purchaser of U.S. beef to one of the top 5 importers this year.  The strong export demand will likely continue into 2022, which should help support longer-term beef prices.



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CORN HIGHLIGHTS: Corn futures rebounded today with modest gains of 2 to 5 cents as traders took the recent pull down in prices of near 30 cents to go long. Stability in equity and energy markets, along with a small recovery in wheat and soybean prices, also provided support. December futures closed 5 cents higher at 5.72 and December 2022 gained 2 cents to finish the session at 5.48-1/2.

The new Covid strain, Omicron, has shaken world markets. Yet it appeared today that cooler heads prevailed, and traders took advantage of a recent set back as an opportunity to buy. By no stretch of the imagination, however, are prices out of downside jeopardy. What this last week likely told the market was that there is risk and it can come quickly if you’re holding too much inventory. Nonetheless, it is early in the marketing year. For grain in storage, continue to sell on price rallies rewarding yourself. We don’t see a significant runup in corn prices unless weather in South America is a bigger concern than it is today. Now that December is here, more attention will be focused upon weather developments, yet to date, nothing consequential outside of normal conditions in the very near term. Forecasters who are watching the La Nina pattern continue to suggest southern Brazil and northern Argentina will become drier as the month wears on.


SOYBEAN HIGHLIGHTS: Soybean futures gained 5 to 11 cents on ideas of the market becoming over-sold in recent sessions on expectations of more export business. Drier conditions in parts of Argentina are starting to show, which provided support for prices today, as did some bargain hunting as crush margins remain positive. A failure of crude oil to hold gains from earlier in the session may have weighed on futures as well, prices shrugged this off into the close. January gained 11 cents to close at 12.28-1/4 and new crop November added 5 cents to finish the session at 12.14.

Most of Brazil remains in good growing shape, however, the state of Rio Grande Do Sul is currently moisture deficit and expected to remain dry at least through the first half of December. This could mean less first crop corn and soybeans. Despite major volatility over the last week, other than soybean oil, the overall range of soybean futures suggest the trend has really been sideways. January futures at 12.28 are trading at the same price they were in early October with a recent high of 12.89 and low of 11.81. A recent pullback in wheat prices weighed on soybean futures, yet we expect futures to consolidate or recover. The bottom line for soybean prices is too much uncertainty regarding South American production. This uncertainty will not allow for an extension of the recent price swing lower, let alone an extension of a down trend.


WHEAT HIGHLIGHTS: Wheat futures tried to recover from the recent losses caused by the headlines of a new Omicron virus strain. The results were a mixed bag with Dec Chi gaining 4-3/4 cents, closing at 7.78-1/2 and July down 1/2 at 7.86-1/2. Dec KC lost 4-3/4 cents, closing at 8.14-1/4 and July down 4 at 8.05-1/4.

The grain markets appeared to take a risk-on stance for todays session, trying to rebound from the losses seen over the past several days. The outcome for wheat was mixed with losses of a penny to gains of almost a nickel in Chi wheat, but losses across the board in KC. A high US Dollar index (still over 96) has been adding to recent pressure. The bright spot continues to be Minneapolis wheat, which saw a gain of 17 cents in the Dec contract and smaller gains in deferred months. Because of a large increase in European exports, their stocks are declining which helped Matif and Black Sea wheat futures to stave off the same level of losses seen in US futures. Paris milling wheat futures were not as lucky though, with strong damage over several days (that being said they achieved comparatively small gains today). Globally, Ethiopia is still tendering for 14.7 mb of wheat and rains are expected to hit eastern Australia again this coming weekend. However, the two-week forecast for Australia remains mostly dry which may be in part lending weakness to KC wheat. Here in the US the forecast for the southern plains remains dry for HRW wheat.


Total Farm Marketing and TFM refer to Stewart-Peterson Group Inc., Stewart-Peterson Inc., and SP Risk Services LLC. Stewart-Peterson Group Inc. is registered with the Commodity Futures Trading Commission (CFTC) as an introducing broker and is a member of the National Futures Association. Stewart-Peterson Inc. is a publishing company. SP Risk Services LLC is an insurance agency. A customer may have relationships with all three companies. TFM Market Updates is a service of Stewart-Peterson Inc. Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition.


Bryan Doherty

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