CORN
Corn futures traded two-sided overnight. Mach corn is down 3-1/2 cents this morning to 5.80-1/2. Front month Dec corn, down 4 cents to 5.82 this morning has not traded above the 5.90 mark since early July, but is once against knocking at the door, although the weekly charts are pushing to oversold levels. Fundamentally, demand news is mostly positive and many outside markets have recovered from the Covid-related panic selling. Spot basis bids for soybeans and corn firmed at processors in the western U.S. Midwest on Friday, grain dealers said. The USDA will release their December WASDE report this Thursday, but this report is usually one of the least volatile throughout the year. Until corn can get a decisive close above 5.90, the market remains rangebound. Weekly Export Inspections will be out later this morning. In outside markets, the dollar is firm, crude up 1.83/bbl; And, stock index futures up 218 points.
SOYBEANS
The soy complex is in the red this morning with Jan beans down 7-1/4 cents to 12.60. Jan meal is off $3.20 per ton after rallying more than $20/ton from the low last Tuesday. Overall, the market is supported by hopes for better Chinese demand for soybeans and the weather premium that my be building due to dryness in Argentina. Recent showers benef soybean planting and establishment in Argentina, but dryness will cause concerns shortly. Favorable conditions for soybean planting and establishment are seen in central Brazil. Southern areas may be showing more stress as soils dry out. Spot basis bids for beans were steady on Friday at the Gulf after strengthening last week as Chinese buyers booked several cargoes of the oilseed. Overnight, Chinese Jan bean futures were down 27 yuan; Soymeal up 9; Soyoil up 252; Palm oil up 258; Corn down 21. Malaysian palm oil prices overnight were up 100 ringgit (+2.15%) at 4750 to cap its biggest jump in more than two weeks, with expectations of a drop in stockpiles in second-biggest grower Malaysia and stronger soybean oil boosting sentiment.
WHEAT
Wheat futures are down 3 to 4 cents this morning after some back and forth trading overnight. March CBOT wheat posted a range from 8.12 to 7.99-1/4, and is at 8.00 this morning. Nearby Dec wheat, up 4-1/2 cents to 7.99 this morning suffered its largest weekly down-move since mid-August. March KC wheat is at 8.20-3/4. March MPLS wheat is at 10.17. Price action going forward is uncertain from here, but is likely to be eventful. Prices are poised to move lower if last week’s lows are taken out. Spot basis bids for HRW wheat delivered to grain terminals across the southern U.S. Plains were flat in both the rail and truck markets on Friday, grain dealers said. Farmer sales were slow. Saudi Arabia’s main state wheat buying agency the Saudi Grains Organization (SAGO) has purchased an estimated 689,000 tons of wheat in an international tender. Russia is discussing setting its wheat-export quota that runs from mid-February through June at 9 million tons, according to people familiar with the matter. It is said the figure was proposed by the agriculture ministry, which also suggested a total grains quota of 14 million tons for the period. In Canada, wheat production is seen 63,000 tons lower than previously expected, according to estimates released Friday by Statistics Canada on its website.
CATTLE
Cattle futures are called mixed to lower. The seasonality makes the market cautious and the price action has signaled a near-term top as price tend to trend lower in early December. The stronger cash trade helped support prices mid week last week, but prices are consolidating at the bottom of the previous week’s trading range. After most cash trade was completed, price action face resistance as weak equities markets and risk off trade pressured the cattle market. February cattle prices have been consolidating and forming a bearish flag formation, which could leave the market open to a further downside break. For the week, active cash trade occurred in the North at mostly $140 to $142 live, and $218 to $220 dressed –$2 higher live, and $2 to $3 firmer for dressed compared to the prior week. Trade in the South was moderate volume at mainly $142, which is $2 firmer than last week. Feeder cattle saw strong losses pressured by a strong move in grain prices. January feeders are running a premium to the cash index, which helped limited its rally potential.
HOGS
Hogs are called mixed. Futures are holding a premium to the cash market, making the market susceptible for selling pressure. Technically, prices are in a sideways, choppy trading pattern, and on longer-term charts, are building a large wedge formation. Look for more back and forth, tightening of the range for a potential breakout in one direction of another. A firming cash market and firm retail demand could be the fuel for an upside move. On Friday, National Direct morning hog report posted strong gains, rising 2.91. In addition, the Lean Hog Cash Index was firmer, gaining .59 to 70.86. The cash market may be starting to look like a value and see some firming bids, especially given strong packer margins. Dec hogs are still holding a premium of 3.14 the index, which could limit gains in the front month. Carcass values have been trending higher during the week, but Friday’s close was difficult, as retail pork carcasses were sharply lower, losing 6.72 to 81.37. The load count was moderate at 342 loads.
Author
Matthew Strelow