Corn: March corn futures tumbled 14 3/4 cents to $5.67 1/2, the contract’s lowest closing price since $5.64 1/4 on Nov. 9. The most-active contract fell 1.5% from $5.76 1/4 at the end of October. Corn joined a broad global commodity sell-off driven by escalating concern the Omicron coronavirus variant may slow demand. Wheat futures plunged about 4.0% and Nymex crude oil futures sank over 5.0% to a three-month low amid a general risk-off mentality. Corn weakness was compounded by a drop under key chart levels that spurred technically driven long liquidation. U.S. corn harvest is largely finished and trade focus is shifting to exports and a generally favorable start to the growing season in South America. Consultant Michael Cordonnier cut his Brazilian corn crop estimate by 1 MMT to 117 MMT, citing dry conditions in the far southern state of Rio Grande do Sul and extended forecasts calling for below-normal precipitation in southern Brazil. Strong demand from domestic ethanol producers may help limit downside in corn futures. Basis at Midwest ethanol plants has been steady to firmer this week, indicating that margins at multi-level highs are encouraging producers to run at high levels.
Soybeans: January futures fell 24 1/4 cents to $12.17 1/4, near a three-week low and down 2.6% from $12.49 1/2 at the end of October. January soyoil fell 307 points to 55.21 cents per pound, a two-month low. January soymeal fell 90 cents to $341.80 per ton. Soybean and soyoil futures were caught in a wave of heavy selling pressure across risk-based markets, driven by fear and money flow, with little fundamental influence. Concerns over economic impacts from the new Omicron variant of Covid caused traders to actively liquidate long positions. Sell-stops were triggered as support levels were violated on the sharp price drop. Today’s price action sets the soybean and soyoil markets up for followthrough selling unless fresh buyers show up with the flip of the calendar to December.
Wheat: March SRW wheat fell 35 cents to $7.87 1/4, a three-week low, but still up 2 1/4 cents for the month. March HRW futures fell 35 cents to $8.22 1/4, but still up 33 1/4 cents for the month. March spring wheat futures plunged 35 1/4 cents to $10.10. Outside markets held sway in the grain and soy complex, as Nymex crude oil to a three-month low and led a general sell off in the raw commodity sector. Yesterday’s report that Australia’s ag statistics agency raised its forecast for the country’s wheat crop to a record 34.4 million MT also weighed on prices. Late yesterday, USDA yesterday reported 44% of the U.S. winter wheat crop in “good” or “excellent” as of Nov. 29, unchanged from the previous week, but slightly better than trade expectations. Acres rated “poor” or “very poor” rose to 23% from 22%.
When USDA’s final crop condition ratings of the fall are plugged into the weighted Pro Farmer Crop Condition Index (0 to 500-point scale, with 500 being perfect), the HRW crop dropped 5.2 points to 324.4, the lowest rating of the fall and 7.8 points below the five-year-average. For SRW, the CCI improved 5.5 points to 361.3, 3.9 points below the initial level and 13.5 points under the five-year average.
Cotton: March cotton futures closed down the 500-point limit at 106.41 cents, hit a four-week low and closed at a bearish monthly low close. The daily trading limit for March futures remains at 500 points tomorrow. Cotton futures were hit hard by a risk-off mentality across commodity markets. Look for cotton traders to continue to watch outside markets for price direction in the near term. Stepped-up concern over the Omicron coronavirus variant has shaken global markets this week, raising concern about new lockdowns and travel restrictions as well as reduced demand for raw commodities. Until this still-very-uncertain situation becomes clearer, look for buying interest in cotton futures to be limited and for weak long liquidation to be featured. Another bearish factors for U.S. cotton is slowing shipments of the fiber, despite decent export sales seen in the weekly USDA reports recently. This may be due to container shortages at U.S. ports but it’s still a worrisome element for the cotton market bulls.
Cattle: February live cattle fell $1.40 to $137.90, the lowest closing price since $137.70 on Nov. 19 but still up 2.6% from $134.225 at the end of October. January feeder cattle fell 87.5 cents to $164.85. Live cattle fell to the lowest levels in over two weeks amid a broad commodity nosedive triggered by growing concern the Omicron coronavirus variant could harm demand. Eroding technical patterns and ideas the cash market may be leveling off after a strong month also weighed on live cattle. Feeder cattle held up better than live cattle, with a slumping corn market lifting deferred futures to modest gains. The cash market had yet to establish a firm direction after reaching 4 1/2-year highs last week. Meatpackers aggressively bought animals much of this month, but some of last week’s purchases were for delayed delivery and packers have access to fresh contracted supplies for December. Also, wholesale beef prices started this week on a weak note. Choice boxed beef dropped $5.90 today to an average of $271.68, the lowest daily price since July 27. Movement totaled 199 loads.
Hogs: February lean hogs fell 95 cents to $79.975, the lowest closing price since Nov. 11 but still a gain of $1.30 since the end of October. December futures rose 97.5 cents to $73.375. Hog futures joined a general commodity market downturn amid concern over global economic impact from the Omicron Covid variant and the implications of Federal Reserve Chairman Jay Powell’s comments about pursuing a tighter U.S. monetary policy. The hog industry has seemed to be anticipating an early cash market low this fall but wasn’t giving many obvious signs of a looming rebound from recently depressed levels. The next CME Lean Hog Index is expected to fall 56 cents to $70.04, the lowest reading since early February and $3.335 under December futures. Pork cutout values fell $1.01 today to an average of $86.70, after jumping $7.50 yesterday. Today’s movement totaled a strong 440 loads. National direct carcass values rose $1.45 to $56.60.