TFM Midday Update 12-17-2021

CORN

Mar corn up 6 @ 597-1/2
Spillover strength from soybeans pulling corn futures higher.
March futures pushed through the reversal high in 11/24 and are challenging the $6.00/bushel barrier.
Corn market is challenging strong overhead resistance, building some weather premium on South American forecasts.
Weekly export sales of 1.948 MMT was a market year high, led by the large purchase from Mexico last week.

Jan soybeans up 18-1/2 @ 1295-3/4
Export sale of 33,000 MT of soyoil to India, and 132,000 MT sale of soybeans to China helping support oil prices.
Soybean market adding premium for weather in South America, as weather forecasts stay dry into the end of the year.
Despite weather concerns, the majority of Brazil soybean crop is in good condition, and the country is still likely to produce a record size crop. January rains will be key.
Demand is still a concern as U.S. soybeans are still more expensive than Brazil export prices going into 2022, trading nearly $30/MT more than Brazil for spring export prices.

Mar wheat up 5-1/4 @ 7.75-3/4. Mar KC up 8 @ 8.11-3/4, Mar MNPLS down 1-3/4 @ 10.25
Spillover strength helping support wheat futures in general as prices recover from strong sell at mid-week. Spread trade pressuring the spring wheat contracts.
Weekly Export sales at 650,600 MT, a market year high, as end-users picked up lower price wheat supplies. Weekly exports at 274,400 MT.
Weather concerns support the KC Wheat Belt as longer-range forecasts maintain a dry bias.

Feb LC down 0.775 @ 136.275 & Mar FC down 2.675 @ 161.650
Weak outside market and strong grain prices pressuring live cattle and feeder cattle prices.
Cash cattle trade still developing, but early trade at $136-138 is steady to $2 lower than last week. Cash trade mostly complete for the week.
Retail values saw afternoon buying support on Thursday, but not enough to outweigh the negative tone in the market for the day.
CME Feeder Cattle Index for 12/16 was down 0.69 @ 161.08.
Weekly Export sales were 17,100 mt, up noticeably from last week, and an additional 5,700 MT for 2022, as beef exports for the year are still on a record pace.
The technical picture has turned more negative, but prices are trying to find support today.

Feb hogs up 0.950 @ 81.325 & Feb pork cutout up 0.825 @ 91.600
Hog prices turned higher on cash optimism, Feb looking to challenge resistance at the $84.00 level.
Firm close in retail values again on Thursday bringing in some buying optimism.
Weekly export sales were supportive at 31,100 MT, up 58% over last week, and an additional 5,800 MT for 2022, at a strong pace for 2021.
Cash market is showing signs of life on firm National Direct values as prices may be trying to find some seasonal value.
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 12/17 gained 0.11 @ 72.41.

John Heinberg