GRAIN CALLS
Corn: 1 to 3 cents lower.
Soybeans: 2 to 5 cents higher.
Wheat: 1 to 3 cents lower.
GENERAL COMMENTS: Soybeans posted gains overnight on followthrough from Friday’s price performance. Corn and wheat traded higher at points overnight but faded late, despite supportive outside markets. Crude oil futures are more than $2 higher this morning and the U.S. dollar index is around 650 points lower. We expect markets to open daytime trade similar to how they finished the overnight session, though choppy price action is likely. It seems likely either soybeans will help support corn and wheat or those markets will eventually pull soybeans lower.
Weather remained hot and dry across Argentina during the weekend and will stay that way through Tuesday. Light, scattered rains are expected during the middle of this week as a cool front moves across the country. Limited rainfall also is expected in Argentina during the weekend into next week. But the moisture will not be enough to seriously change the drought situation, according to World Weather Inc. Brazil’s west and south will get rain in the middle to latter part of this week and into the weekend, offering some improvement to crops after recent dryness and warm temperatures.
Early soybean harvest activity in Mato Grosso has been slowed by wet conditions. As of last Thursday, AgRural said only 0.04% of Brazil’s soybean crop had been cut, behind 0.2% last year on that date.
Bitter cold occurred in portions of Russia’s western and southern wheat production region along with far northern Ukraine during the weekend, but snow was on the ground to product most of the crop from damage, according to World Weather.
Supporters of former Brazilian President Jair Bolsonaro stormed Brazil’s Congress, the Supreme Court and presidential palace in the capital Sunday. Brazil’s currency, the real, weakened early Monday. “Considering the enormous coverage the event got and the surprise we all had, markets should react negatively, but this should be short term,” economists at JPMorgan said in a research note. “As day-to day government work resumes, attention should go back to the macro issues that have been top of mind.”
Many travelers began to fly in and out of mainland China on Sunday as Beijing removed almost all its border restrictions, bringing an end to pandemic measures that effectively sealed off the world’s most populous nation from the rest of the world for three years.
CORN: March corn futures dropped as low as $6.50 3/4 overnight. Last week’s low at $6.48 1/2 is initial support. Below that, support is in the $6.45 to $6.35 range. Near-term resistance starts at the 5-day moving average at $5.65 1/2, a level at which buyer interest was curbed overnight.
SOYBEANS: March soybeans gapped higher to start the overnight session but found limited buyer interest above $15.00 and later filled the gap. The overnight high at $15.01 3/4 is near-term resistance. Near-term support is the $14.90 to $14.85 area.
WHEAT: March SRW wheat futures have formed a short-term bear flag formation on the daily chart as the contract paused following last Wednesday’s big downside move. Near-term support and resistance are at $7.36 and $7.56 3/4, respectively.
LIVESTOCK CALLS
CATTLE: Choppy to lower.
HOGS: Choppy to lower.
CATTLE: Live cattle futures are expected to open with a weaker tone after finishing near their weekly lows last Friday. But corrective buying could surface if initial seller interest is limited. Traders will likely remain cautious buyers of futures early this week as they wait for cash cattle trade to develop, though they start the week with expectations of firmer cash prices after disappointing trade last week. Wholesale beef prices firmed on Friday, with Choice up $1.36 and Select $2.39 higher.
HOGS: Lean hogs are expected to open the week under pressure on followthrough from last week’s poor performance and continued weakness in the cash market. Hog futures broke down technically last week and are now near-term oversold. While that could lead to corrective buying, traders are likely to be cautious toward the long side of the market until the cash index shows signs of a seasonal low. The CME lean hog index is down 77 cents to $77.49 (as of Jan. 5), the lowest level since Jan. 19, 2022. Last year at this time, however, the cash index had bottomed and started a sharp rally to the seasonal high in August. This year, the cash index hasn’t shown signs of bottoming yet.