TFM Midday Update 12-10-2021

CORN

Mar corn down 3 @ 5.88
USDA report showed no major changes to carryout, leaving the number at 1.493 billion bushels, the same level as the November report.
Prices likely seeing some post report profit-taking as the number was slightly above expectations.
Demand remains strong with another good week of corn usage for ethanol production
Prices received an early session boost as CPI data showed consumer inflation was at 6.8% year over year for last month, above expectations.
Technical picture stays strong as corn futures continue to push to a high over the previous day and showing strong price action. March at 5.96 will be key resistance.

Jan soybeans up 4 @ 12.68
USDA WASDE left carryout unchanged and tightened global carryout forecast, which supported prices.
After 10 consecutive days, no announced soybean export sales on the overnight.
Strong move in soybean meal prices, offset by pressure in soybean oil is keeping soybean prices choppy on Friday.
Going into the end of the year, the market will stay extremely focused on demand and the trends in South American weather.

Mar wheat up 7 @ 7.84, Mar KC up 5 @ 8.02, Mar MNPLS up 4 @ 10.26
Wheat prices recovering and seeing some price squaring after the strong move lower this week.
USDA raised both U.S. and global wheat carry out on the WASDE report on Thursday, disappointing the market.
U.S. wheat prices are closely tied to Matif Milling Wheat prices in Europe, which have trended lower, leading U.S. wheat lower.
March Chicago wheat is challenging resistance at 7.80 level, which was key support broken yesterday.

Feb LC up 0.325 @ 138.100 & March FC up 0.850 @ 165.950
Early cash trade was $140 in the south, steady with last week, and disappointing to the market
Weak retail values are concerning as boxed beef prices are moving lower counter-seasonal. Weak retail tone may limit gains in the cash market.
Cattle slaughter projected at 123K
CME Feeder Cattle Index for 12/9: up 0.47 @ 161.63 and running a discount to the Feeder futures prices.
Cattle could be close to a seasonal turn, but steady cash market was disappointing and could keep pressure on the market.

Feb hogs up 2.400 @ 80.225 & Feb pork cutout up 2.500 @ 86.000
Hog futures seeing follow-through buying and short-covering after Thursday’s strong close.
Cash market is showing signs of life, with National Direct midday prices firmer, building some potential optimism.
Carcass values have trended higher this week, even with the soft close on Thursday.
Overall premium of the futures market to cash market is still concerning and may keep selling pressure active in the near term.
CME Lean Hog Index for 12/10: up 0.12 @ 70.95

John Heinberg