CORN

Corn futures jumped 6 cents higher overnight led by new highs in beans as the trade resumes its up-trend and the dollar falls.  Dec corn got to 4.11-3/4 and has retraced half it’s losses since retreating from last week’s contract high of 4.22-1/4.  Technically, Dec corn leaped back over the contract’s 10 and 20-day moving average last night which will favor the Managed Money’s long position that stands and an estimated 225,000 contracts.  Trade estimates for this morning’s USDA Weekly Export Sales are 1.80 to 2.50 mil tons.  U.S. corn export prices are the lowest for export in the World. Some commercials feel U.S. final exports could be up 235 mil bu from USDA guess. This could drop U.S. carryout below 1.80 bil bu.

SOYBEANS

Soybean futures reached a new high overnight with Nov eclipsing the contract high of 10.94 to 1095.  Jan beans reached 11.04 after closing well above the contract’s 10 and 20-day moving average in Wednesday’s rally.  Weather premium is building with South American weather lacking moisture and Managed Money remains heavily net long until that changes.  The 6 to 10 day forecast for Brazil continues to advertise “hit and miss moderate rainfall amounts with coverage up to 85%. Temps near average”.  Argentine growing regions read, “limited rainfall over the next 6 to 10 days with some rains falling in the south moving up the east coast. Temps will be running near average over the next 6 to 10 days with some above average readings developing as we head through next week.” Meanwhile, trade estimates for this morning’s USDA Weekly Export Sales are 800,000 tp 1.70 mil tons for beans, 175,000 to 400,000 for meal, and; 5,000 to 30,000 for soyoil.  Malaysian palmoil prices also traded higher this week and, concern about South America soybean supplies is helping soymeal.  There is also talk that due to higher domestic corn prices China hog producers are adding more soymeal to their feed rations.  Next week’s monthly USDA report will be closely monitored for a potential reduction to the U.S. carryout.  China’s strong return to the U.S. soybean market in recent months has single-handedly lifted U.S. farm exports to the Asian country to new records, and the heavy forward shipping schedule bodes well for the promises outlined in the Phase 1 trade agreement between the two countries.

WHEAT

Wheat futures were up a dime overnight amid a weaker dollar and renewed buying interest in the grain and oilseed complex.  Dec Chicago wheat rose to 6.18-3/4 and is 6.38-1/4 from Oct 20.  Dec KC wheat hit 5.68-3/4 and is targeting the peak of 5.79-1/2 from Oct 21. Dry weather patterns in parts of Russia, Argentina and the U.S. south Plains and the downturn in the greenback has helped Chicago trade higher. USDA estimates U.S. 2020/21 SRW ending stocks near 102 mil bu versus 109 last year.  2021/22 end stocks are estimated near 140.  Trade estimates for this morning’s USDA Weekly Export Sales are 200,000 to 700,000 tons. In overnight tender activity, Egypt seeks optional-origin wheat, S. Arabia seeks 600,000 tons of optional-origin wheat, Japan bought 91,000 tons of U.S./Canadian/Australian wheat, and; Jordan passed on 120,000 tons of optional-origin wheat.

CATTLE

Cattle futures calls are steady to higher.  Futures managed to stay in the green at the close on Wednesday opening the possibility for early follow-through this morning.  Cash trade started to develop with $107 trade, up $1.00/cwt over last week.  And, there is some unconfirmed talk of trade up to $109 to $110 in the south.  Choice Carcasses stayed firm into the close on Wednesday, up .75 to 210.19.  It was encouraging to see the mid-day levels hold again.  Live and feeders trying to break out of the most recent consolidation range and need follow through confirmation, but COVID cases are on the rise and a concern regarding demand uncertainty. 

HOGS

Lean hog calls are called mixed following a nice bounce on Wednesday.  Dec is still in a sideways consolidation pattern held in check by weak fundamentals. Deferred contracts are holding support.  Slaughter runs are heavy at 493,000 estimated kill meaning an ample supply of production is available.  The CME Lean Hog Index continues to slide, losing another .60 to 72.88 on Wednesday. Retail values remained soft all day with closing prices down .58 to 82.41.  The CME Pork carcass cutout index (IJ.X) down 2.77 to 84.44, trending lower since 10/22.  

Author

Matthew Strelow