TFM Daily Market Summary 12-29-2021


FRIDAY, DECEMBER 31: The CME has regular trading hours. Total Farm Marketing offices will close at 2:00 CT; there will be no Top Farmer Intelligence report.

MARKET SUMMARY 12-29-2021 

Apr live cattle futures score new contract highs. Though the Cattle on Feed report last Thursday didn’t necessarily have any bullish fodder, the market has advanced regardless. Strong gains today suggest nearby demand is robust. Cutout values continue to firm this week as well with choice over 2.65 and select over 2.57. Coupled with some weather uncertainty and traders were on the offensive. Managed money may, in part, be supportive as continued broad-based buying of commodities is noted. Both technical and fundamentals are in sync.

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CORN HIGHLIGHTS: Corn futures traded weaker on the overnight losing 5 cents, rallied by mid-session gaining 5 cents, and finally ended mostly steady with Mar gaining 0-3/4 cent closing at 6.05-1/2. Support comes from weather uncertainty in the Southern Hemisphere and good demand, especially from ethanol. The weekly corn grind was 107.507 mb, the highest weekly use figure since the end of October. Stocks on Hand was mostly unchanged at 20.646 million barrels.

Bear spreading was a noted feature into the close, as Dec picked up 3.5 cents against the Mar contract. We are not surprised to see strength in the Dec contract. High input costs along with expectations that between two and four million acres of corn could switch to soybeans may suggest eventually the carry out for corn closer to 1 billion bushels. With a strong crush pace, one has to believe the USDA will increase the total usage by 50 to 150 million bushels. Corn acres could remain mostly unchanged or perhaps even grow, but we view this only likely if Dec corn futures trades 50 cents or more higher which would put Dec futures north of 6.00.


SOYBEAN HIGHLIGHTS: Soybean futures ended the session mixed with nearby Jan closing 2-3/4 cents weaker at 13.56-1/2 and Mar up 0-3/4 at 13.68-3/4. The trading range for most futures contracts today was between 15 and 20 cents. Yet futures contracts limped into the close suggesting the market is taking on more of a holiday-type atmosphere. As a reminder, the market is open normal hours on Friday.

Soybean meal and oil were mixed to firmer and they too may be suggesting the market will wait for more news to digest. A mostly warmer and drier forecast for parts of South America is supportive. The sharp upturn in soybean prices this past month is reflective of weather concerns. The question, however, is if the market has factored in enough yield lost. The way it has traded the last two sessions we might argue it has. Hook reversals yesterday that look negative, along with a comeback today, suggest traders are on hold. Stochastic indicators have been signaling overbought and offered a sell signal yesterday.


WHEAT HIGHLIGHTS: Wheat futures came back from yesterday’s losses with a mixed to higher close today. It seems the recent selling pressure may have eased as many traders squared up their positions before month and year-end. Mar Chi gained 4-1/4 cents, closing at 7.87-3/4 and Jul up 1-3/4 at 7.85-1/2. Mar KC gained 2-3/4 cents, closing at 8.24-1/2 and Jul down 1-1/4 at 8.19-1/4.

Yesterday’s long liquidation in grains may have been short-lived. After wheat’s bearish reversal on Monday and continued selling pressure yesterday, the fact that the market was able to come back with gains (albeit small) is an encouraging sign. Some of what the wheat market saw in terms of liquidation may have been in part due to improving Russian conditions. On that news front, there is talk of Russia selling wheat to China and possibly Algeria as well. Egypt was also tendering for wheat, which resulted in a purchase of 300,000 mt. Of that, 180,000 mt were sourced from Ukraine, 60,000 from Romania, and 60,000 from France. Speaking of France, Paris milling wheat futures also were able to claw their way back into positive territory with small gains today. Iraq’s tender, which we mentioned yesterday, is now scheduled for this coming Monday. In the United States, the southern Plains remain dry, but the northern Plains and Pacific Northwest have been getting snow which should help conditions there. Concern exists in South Dakota specifically regarding winterkill as the snow cover there has been light.


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.


Brandon Doherty

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