GRAIN CALLS
Corn: 3 to 4 cents higher.
Soybeans: 12 to 14 cents higher.
Wheat: 7 to 13 cents higher.
GENERAL COMMENTS: Corn and wheat futures rose to the highest levels in over a week overnight. Soybeans also gained as weather and supply concerns encouraged corrective buying after Monday’s losses. Malaysian palm oil futures rallied 4%, the biggest daily gain since Nov. 1, on lower-than-expected inventory numbers. Front-month crude oil rose about $1.50 as the market extended this week’s rebound. U.S. stock index futures signal a sharply higher open and the U.S. dollar index is down more than 1,300 points and near a 5 1/2-month low.
USDA reported a daily sale of 140,000 MT of soybeans for delivery to “unknown destinations” during the 2023-24 marketing year. With today’s announcement, USDA has reported nine separate daily sales to China or unknown destinations totaling 1.966 MMT since Nov. 23.
U.S. consumer prices in November came in lower than expected and posted the smallest annual increase in nearly a year as costs for gasoline and other goods and services declined, according to a Labor Department. The consumer price index increased 0.1% last month after advancing 0.4% in October. Economists expected the CPI to gain about 0.3%. In the 12 months through November, the CPI climbed 7.1%, the smallest advance since December 2021. With tamer inflation numbers, the Federal Reserve is expected to scale back the size of its interest rate increases on Wednesday.
Argentina’s crops are “still at risk” despite recent rain, World Weather Inc. said. “Topsoil moisture has improved following the weekend rain, but the improvement will not last long with a 10-day weather outlook that fails to bring much follow-up rain and keeps temperatures near to slightly warmer biased,” the forecaster said. “Subsoil moisture is still critically low and it will not take very many days of sunny weather to deplete topsoil moisture again returning serious crop stress to the driest areas.”
South American crop consultant Dr. Michael Cordonnier cut his Argentine crop estimates for a third straight week due to impacts from persistent heat and dryness. While Argentina received beneficial rains during the weekend, they will provide only temporary relief and hot, dry conditions are forecast to return. Dr. Cordonnier lowered his Argentine soybean and corn crop estimates another 1 MMT each, cutting both to 47 MMT. He has a neutral to lower bias for both crops. Cordonnier kept his Brazilian crop estimates at 151 MMT for soybeans and 125.5 MMT for corn.
Eight ships loaded with grain left ports in Ukraine’s Odesa region today after a pause caused by power cuts following Russian missile strikes over the weekend, the Ukrainian infrastructure ministry said. The Black Sea port of Odesa did not operate on Sunday and the ports of Chornomorsk and Pivdennyi, which are also authorized to export grain had operated only partially.
The Ukrainian grain traders union UGA asked the government to ensure electricity to grain facilities to reduce potential damage to stored crops. Russia has been targeting Ukraine’s energy infrastructure with missile and drone strikes since October, which UGA said made production processes at grain storage enterprises virtually impossible. “This in turn leads to grain spoilage and, as a result, loss of funds,” UGA said. “Due to the lack of electricity, it is impossible to cool or ventilate it by moving it.”
After a year of price volatility for agricultural inputs, 2023 is set to be a “normal” year for fertilizer and pesticide costs, an official at top Canadian fertilizer maker Nutrien told Reuters. Nutrien’s chief executive for Latin America said the war in Ukraine raised concerns and initially increased fertilizer prices this year, but added that 2023 will be more normal with less volatility than 2022, with a more “settled” market, despite what Dias said was expected Russian surcharges on fertilizers.
China is delaying a key economic meeting after Covid-19 infections surged in Beijing, according to Bloomberg News. The closed-door Central Economic Work Conference was initially expected to start later this week, when Chinese leaders, including President Xi Jinping, were expected to chart a recovery course for the Covid-hit economy in 2023, including more stimulus plans.
Japan is seeking 154,942 MT of wheat in its weekly tender.
CORN: March corn overnight reached $6.58, the contract’s highest intraday price since $6.60 1/2 on Dec. 2. Corn is poised to rise a fourth consecutive session, with a sustained push above $6.60 potentially confirming a near-term bottom with the 3 1/2-month low of $6.35 on Dec. 7.
SOYBEANS: January soybeans traded within the previous session’s range overnight after dropping 23 1/4 cents Monday to $14.60 1/2. Escalating concerns over South American weather and stronger crude oil should support futures.
WHEAT: March SRW wheat overnight reached $7.67 1/2, the contract’s highest intraday price since $7.68 on Dec. 5. Continued futures gains may foster ideas that market notched a near-term bottom with last week’s drop to 14-month lows.
LIVESTOCK CALLS
CATTLE: Steady-firm
HOGS: Steady-firm
CATTLE: Live cattle futures may gain support from expectations cash prices will retain a firm tone despite last week’s pullback, while a surge in wholesale beef prices may also encourage buyers. The average live steer price last week fell 63 cents to $155.79, the first decline in 10 weeks, as packers purchased only 59,000 head of cattle in the negotiated market. Cash sources expect generally steady cash cattle prices this week, supported by last week’s light volume but limited by the upcoming holiday-shortened slaughter schedules. Choice beef cutout values surged $8.09 Monday to $257.02, the highest daily average since Nov. 17 and an indication packers’ recent price cuts spurred retail demand. February live cattle rose 55 cents to $156.10, the contract’s highest settlement since Nov. 22.
HOGS: Lean hog futures may gain support behind ideas the cash market is near a bottom. The CME lean hog index is down another 52 cents to $81.47 (as of Dec. 9), the lowest since January. December hog futures finished Monday 48 cents above the index, suggesting traders sense the cash index will soon bottom. Meanwhile, traders continue to take premium out of deferred contracts, with February hogs finishing Monday just $2.23 above today’s cash quote. Pork cutout values fell $1.62 Monday to $86.94, led by a decline of over $6 in bellies. Movement was strong at 335 loads. February lean hogs fell 30 cents to $83.70, the contract’s lowest close since Oct. 14.