GRAIN CALLS
Corn: Steady to 2 cents higher.
Soybeans: 1 to 3 cents lower.
Wheat: SRW 2 to 4 cents lower; HRW 1 to 3 cents higher; HRS 2 to 4 cents higher.
GENERAL COMMENTS: Corn and wheat posted modest gains overnight, trading in tight ranges. Soybeans favored the downside, though buying interest in all three increased into the break. Equite futures are higher this morning, despite CPI coming in higher month-over-month. Front-month crude oil futures are around a dollar higher while the dollar index is near unchanged.
Consumer price inflation rose for the second consecutive month to 2.7% in November, up from 2.6% in October but in line with market expectations. On a monthly basis, CPI rose by 0.3%, the largest month-over-month increase since April. Core CPI rose to a three-month high to 3.3%m unchanged from October and September and in line with expectations.
Potential tariffs by the incoming Trump administration has increased demand for Ukrainian corn, Hellenic Shipping News reported. While U.S. corn is the most economical option for European markets, traders have increasing concerns regarding potential tariffs and how that will impact global trade, encouraging more buyers to source corn from Ukraine. Some say a similar trend is emerging in Asian markets, particularly China. Traders anticipate more Asian demand for Ukrainian corn in early 2025.
China’s top leaders and policymakers are considering allowing the yuan to weaken in 2025 as they brace for higher U.S. trade tariffs as Donald Trump returns to the White House, three people familiar with the situation told Reuters. The potential strategy reflects China’s recognition that it needs bigger economic stimulus to combat Trump’s threats of punitive trade measures. The tightly managed yuan is allowed to move 2% on either side of a daily mid-point fixed by the central bank. While the People’s Bank of China is unlikely to say it will no longer uphold the currency, it will emphasize allowing the markets more power in deciding the yuan’s value, one source says.
Farm-state officials continue to talk about a farm aid package along the lines we discussed Tuesday, including around $9 billion in direct payments for 2024 and another $1 billion for crop insurance rebates. Outgoing Senate Ag Chair Debbie Stabenow (D-Mich.) is pushing for specialty crop payouts and a budget baseline for her urban ag program. Once a final package is agreed, party leaders will have to sign on. All this, including one-year funding for so-called “orphan” programs, is part of extending the 2018 Farm Bill due to the inability of lawmakers to reach an agreement on a new measure. Last-minute changes are possible due to very liquid talks.
CORN: March corn futures traded in a tight range overnight. Bulls next objective is overcoming the Oct. 2 high at $4.52 1/4. Support comes in at $4.47 3/4 then the 10-day moving average at $4.40 1/4 on a reversal lower.
SOYBEANS: January soybean futures traded lower overnight. Bulls are looking to keep prices above solid support at $9.86. Resistance stems from the psychological $10.00 mark, which has capped strength each day this week.
WHEAT: March SRW futures continue to grind higher. Bulls next objective is overcoming the 40-day moving average at $5.71. Support comes in at $5.61 3/4, the 20-day moving average, then the psychological $5.50 mark on a reversal lower.
LIVESTOCK CALLS
CATTLE: Choppy/lower.
HOGS: Lower.
CATTLE: Live cattle futures and feeders are expected to open with a mostly weaker tone, driven by technical selling. February live cattle futures tested solid resistance around $189.50 after two days of price strength, which is likely to reignite selling efforts if it holds. Cash cattle trade has been light to start the week at mostly steady prices with a week ago, which could cap buying after the open. Wholesale beef was mixed on Tuesday, with Choice cutout falling $2.41 to $311.72 and Select firming 31 cents to $279.65.
HOGS: Lean hog futures are expected to open lower in a continuation of Tuesday’s selling pressure. February lean hog futures broke below support and saw sustained selling throughout yesterday’s session. The CME lean hog index is down another 13 cents to $83.33 as of Dec. 9. December futures finished 40.5 cents below that level on Tuesday and will continue to keep a close relationship ahead of Friday’s contract expiration. Pork cutout fell 49 cents to $93.14 yesterday, led by weakness in ribs, though movement was solid at 350.2 loads.