CORN
Corn futures continued to trek higher overnight and make new highs in the front months. Nearby March reached 6.17-3/4 on gains of 3 cents. December corn was flat overnight at 5.57. Row crops, in general are trending higher as weather premium pours in and technical buying fuels the rally. Key growing locations in South America remain dry resulting in a shrinking forecast for first crop corn yields, particularly in Brazil. Brazilian corn prices are at their highest levels since August. In addition, news of Chinese economic stimulus efforts equate to potentially stronger demand for commodities. Meanwhile, the U.S. dollar has flattened out and seeing some easing. China reports efforts to stimulate their economy, which could help increase demand for commodities. Spot basis bids for corn were steady to weak at elevators, ethanol plants and processors around the interior of the U.S. Midwest on Monday morning, grain dealers said. However, basis bids for row crops shipped by barge to the U.S. Gulf Coast inched higher on Monday in response to exporter needs and high costs for freight.
SOYBEANS
Soybean futures were higher again overnight led by soaring soymeal prices. Jan beans, up 12 cents to 13. 74-1/2, are challenging the August 17 high of 13.83-3/4. Nov beans were dragged 4-1/4 cents higher to 12.82. Nearby January meal reached a new high of 419.70 last night on gains of $4.90. Despite dry weather in South America, Brazil’s soy harvest could still become a record. However, a warm and dry forecast remains under the watchful eye of the trade. Rio Grande do Sul and Parana is mostly dry through Today followed by isolated showers Wednesday through Friday. Temperatures are forecasts to be near to above normal through Friday. Mato Grosso, MGDS and southern Goias is forecast to get scattered showers north through Today. Scattered showers Wednesday through Friday with temperatures near normal through Friday. Overnight, Chinese May bean futures were up 78 yuan; Soymeal up 18; Soyoil up 52; Palm oil up 38; Corn down 9. Malaysian palm oil prices were up 168 ringgit (+3.65%) at 4772.
WHEAT
Wheat futures eased overnight with nearby March Chicago down 8 cents to 7.96, March KC down a dime to 8.37; And, March MPLS spring wheat down 7 cents to 10.17-1/2. Wheat futures are disengaging from the supportive rally seen in row crops as weather for the crop holds less support for this market. Favorable conditions for winter wheat establishment is reported in southern Europe and, though dry in the U.S. southern Plains, the 2 week forecast holds chances of rain. Winter wheat crops in Ukraine’s central regions, which make up a third of all sowings in the country, have been affected by poor weather and are mostly in satisfactory condition, APK-Inform agriculture consultancy said on Tuesday.
CATTLE
Cattle futures are called mixed after a choppy session to begin this holiday-shortened week of trading. Feb live cattle, at 139.27, may have defined a near-term trading range with yesterday’s high of 140.325 after coming off the low 135.50 from just last week. Friday’s COF Marketings were higher than expected and viewed as supportive for the contract, but the failure to take out the December high of 140.375 may allow prices to drift. Boxed beef values eased yesterday. All-in-all, the market has a positive tilt in place, but more buying interest will be needed to keep prices from easing. Packers are short bought and will be looking to fill supply lines which should underpin cash markets and thus futures.
HOGS
Hog futures are called mixed as traders digest yesterday’s strong performance. Nearby Feb hogs made a new high for the month of December at 84.65, but settled well off the daily high at 83.65. The near-term upside objective lies at the November 26 high of 84.67. Though well supported, this could be a key resistance area moving forward as prices are now technically overbought. Thursday’s Hogs and Pigs report was supportive, but February hogs are trading at a wider than normal premium to the cash market. Frigid temperatures will offer some support to the market while slaughter capacity takes a hit from the holiday schedule.
Author
Matthew Strelow