GRAIN CALLS
Corn: Choppy to 2 cents lower.
Soybeans: Choppy to 5 cents lower.
Wheat: Choppy to 2 cents lower.
GENERAL COMMENTS: Grain and soy futures are expected to open mixed to mostly weaker coming out of the extended holiday weekend on pressure from outside markets. Front-month crude oil futures are more than $1 lower this morning, while the U.S. dollar index is around 1,000 points higher.
Argentina received some much-needed rainfall during the holiday weekend, offering some short-term relief to dryness, but the forecast calls for mostly dry and hot weather over the next 10 days, which will increase crop stress. Brazil will continue to see favorable weather during the next two weeks. There are some pockets of dryness in far southern Brazil and too-wet conditions in some northern areas, but overall, World Weather Inc. says growing conditions remain mostly favorable.
USDA this afternoon is expected to report November soybean crush totaled 190 million bu., according to a Bloomberg survey. That would be down 3.5% from October and 0.1% below year-ago. Corn-for-ethanol use is expected to be 448.7 million bu., down marginally from October and 3.9% less than year-ago.
Ukraine exported 22.6 MMT of grain in the first half of the 2022-23 marketing year, down 29.8% from the same period last year. That total included 12.5 MMT of corn (up 15.7%), 8.4 MMT of wheat (down 47.0%) and 1.6 MMT of barley (down 68.8%).
Brazil exported 2.02 MMT of soybeans in December, according to official government data. That was down from 2.64 MMT in November and 2.71 MMT last year. Brazilian corn exports totaled 6.41 MMT last month, up from 6.06 MMT in November and 3.41 MMT last year.
The World Health Organization has invited Chinese scientists to a virtual closed meeting with its technical advisory group on viral evolution on Tuesday, to present data on which variants are circulating in the country. China lifted its “zero-Covid” measures in December and cases are now surging, although official data is patchy.
CORN: March corn futures paused late last week after earlier reaching the highest level since early November. Near-term resistance is last Friday’s high at $6.85. Near-term support is layered from $6.77 to $6.72 1/2.
SOYBEANS: March soybeans last week pushed to their highest level since mid-June. While the technical picture is bullish, the market may face some corrective selling if funds aren’t active buyers to kick off the new year. Near-term resistance is at $15.45 3/4, with support at $15.08 and then the psychological $15.00 mark.
WHEAT: March SRW wheat reached the highest level since Nov. 30 last Friday. Near-term resistance is the psychological $8.00 mark. Trendline support drawn off the December lows intersects around $7.60.
LIVESTOCK CALLS
CATTLE: Steady/firmer
HOGS: Steady/weaker
CATTLE: Live cattle futures are expected to open with a firmer tone coming out of the extended holiday weekend. Fundamental support will come from expectations the cash market will be firmer and rising wholesale beef prices. Packers were more aggressive than expected with cash cattle prices last week, suggesting they were short-bought on supplies after the holidays. Cash sources expect packers to be active buyers of cattle this week after light purchases the past could weeks. Packers also strengthened their margins during the final weeks of last year and they are now solidly in the black. Choice boxed beef prices firmed $3.12 last Friday, while Select was 23 cents higher.
HOGS: Lean hogs are expected to open with a weaker tone on followthrough selling after a corrective pullback the final three days last week. February lean hog futures finished last Friday $7.51 above the CME lean hog index, which is down 55 cents to $80.19 (as of Dec. 29). Traders aren’t yet convinced the cash index has put in a seasonal low, which could pressure the market. The flip of the calendar could attract new buyers if initial seller interest is limited, though the premium futures hold to the cash index is likely to limit buyer interest until traders are convinced a seasonal cash low is in place.