Corn: December corn fell 5 3/4 cents to $5.81 and March fell 9 1/2 cents to $5.82 1/4. Corn futures were caught in a broad-based selloff across the grain and soy markets as many traders take profits. With November ending and the December contract going into delivery tomorrow, there may be more corrective selling. Fund activity will likely determine if there’s a deeper price pullback, or if buyers surface under the market. USDA’s weekly corn export inspections for the week ended Nov. 15 totaled 766,063 MT (30.2 million bu.), down from 825,650 MT the previous week. Trade expectations ranged from 575,000 to 1.2 MMT. Corn inspections continue to run slower than the seasonal norm. Inspections are running 17.0% behind year-ago, whereas USDA projects exports will decline 9.2% from 2020-21. Corn basis was weaker across the Midwest this morning, though it was steady/firmer at ethanol plants. Given strong margins, we expect basis at ethanol plants to remain supported.
Soybeans: January soybeans fell 11 1/4 cents to $12.41 1/2 and near the session low. January soybean meal fell $6.70 to $342.70, the lowest closing price since Nov. 11. January soyoil fell 60 points to 58.28 cents per pound. The soy complex took spillover pressure from weakness in corn and wheat futures amid heightened risk aversion after concern over the Omicron Covid variant shook global markets last Friday. A stronger U.S. dollar also pressured the soy complex. Soymeal futures are showing signs of a near-term top, have topped out, which could mean soybeans will struggle to move higher. South American weather remains mostly favorable for crops, with planting of Brazil’s soybeans nearly complete, and aside from some dryness in far southern areas, conditions are favorable. USDA reported 2.143 MMT (78.7 million bu.) of soybeans inspected for export during the week ended Nov. 25, down from 2.432 MMT (89.4 million bu.) the previous week. Trade expectations were 1 MMT to 2 MMT. U.S. soybeans inspected recently are running close to seasonal levels.
Wheat: March SRW wheat fell 18 cents to $8.22 1/4, down from a contract high at $8.67 1/2 Nov. 26 and the lowest closing price since $8.22 on Nov. 16. March HRW futures fell 11 3/4 cents to $8.57 1/4. March spring wheat dropped 3 1/4 cents to $10.45 1/4. Wheat futures tumbled as the U.S. dollar strengthened and Australia boosted its estimate for the country’s crop. Australia is expected to reap a record 34.4 MMT of wheat in 2021-22, up 17% from a previous estimate, the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) said today. The projected crop would be 3% above a previous record in 2020-21. In the U.S., little moisture relief is expected for the dry areas of the western HRW belt. Precipitation “will continue minimal in areas that need it most,” World Weather Inc. said. Weekly wheat export inspections remained paltry at just 7.5 million bushels. Inspections are running 16.9% behind year-ago. USDA projects exports will be down 13.3% from 2020-21.
USDA’s latest weekly crop condition ratings released late today reflected dryness stress. USDA reported 44% of the winter wheat crop in “good” or “excellent” as of yesterday, unchanged from the previous week, but slightly better than trade expectations for 43%. Acres rated “poor” or “very poor” rose to 23% from 22%.
Cotton: December cotton futures rose 5 points to 116.65 cents per pound and March futures fell 37 points to 111.41 cents, with other deferred contracts also lower. Cotton futures fell under carryover technical pressure from sharp losses to end last week but seemed to find support as U.S. stocks and crude oil futures rebounded from last Friday’s Covid-sparked sell-off. Concern over the new Omicron coronavirus variant, and its broader impact on the economy and commodity markets, may keep cotton futures on edge this week. Strong U.S. exports may continue to support cotton futures. USDA on Friday reported net U.S. cotton sales of 196,900 running bales for the week ended Nov. 18, up 44% from the previous week and up 3.0% from the prior four-week average. Top buyers included China (58,500 RB), Vietnam (44,500 RB), Pakistan (34,200 RB) and Turkey (20,100 RB). Late today, USDA reported the U.S. cotton crop was 85% harvested as of Nov. 28, up from 75% the previous week and above the 79% average for that date during the previous five year.
Cattle: December live cattle fell $1.175 to $136.925, while February futures fell $1.90 to $139.30. January feeders fell $1.425 to $165.725. Cattle futures started out with a mildly firmer tone, but buyer interest dried up and profit-taking surfaced. Given the recent strong runup in prices and with November coming to an end, it wasn’t overly surprising to see the market pull back on corrective selling. But today’s price action does heighten attention to a potential top. Last week’s cash cattle price averaged $138.17, up 3.8% for the eighth consecutive weekly gain and the highest weekly average since June 2017. With packers having access to contracted supplies for December starting later this week, there is some talk they could back off their recent aggressive raising of prices. But market-ready supplies are also tight as feedlots used the price surge to get current on marketings and likely pulled some animals forward. That should keep the cash market from weakening much if any. Choice boxed beef prices fell $2.43 today to an average of $277.58 on relatively light movement of 82 loads.
Hogs: February lean hogs fell 10 cents to $80.925, the contract’s lowest closing price since $80.55 on Nov. 12. April futures and other deferred contracts ended slightly to moderately higher. Nearby hog futures fell under profit-taking and followthrough selling from last Friday’s general commodity sell-off amid concern over the Covid Omicron scare. Solid losses in the cattle futures markets today also produced some spillover selling pressure in lean hog futures. Nearby December lean hog futures are still trading at a premium to cash, with was also a negative today. The CME lean hog index fell 93 cents to $71.63, the lowest since early February, and the next quote is expected to drop $1.03. But a spike in wholesale pork prices suggests demand may be improving. Pork cutout values rose $3.70 today to $87.71, led by a gain of over $7.00 in hams. Movement was strong at 335 loads. The national direct cash hog price rose 2 cents to $55.15.