GRAIN CALLS
Corn: 1 to 3 cents higher.
Soybeans: 2 to 5 cents higher.
Wheat: SRW 5 to 7 cents higher; HRW 6 to 9 cents higher; HRS 6 to 8 cents higher.
GENERAL COMMENTS: Wheat led corrective strength overnight with corn and soybeans following to the upside. Each ended last week near significant technical support, today’s price action is likely to set the tone for the rest of the week. Both the U.S. dollar index and front-month crude oil futures are modestly lower this morning on profit-taking.
Rains fell across nearly all of Brazil’s crop areas last week. AgRural notes there are only a few isolated areas of concern. The firm estimates Brazil’s soybean crop at 171.5 MMT, with corn production forecast at 121.3 MMT. World Weather Inc. says Brazil will continue to receive rains over the next two weeks, supporting crop development. Southern Argentina is forecast to be mostly dry over the next week.
Analysts expect members of the National Oilseed Processors Association (NOPA) to report November soybean crush at 196.7 million bu., which would be down 1.6% from the all-time record in October but a new high for the month. Soyoil stocks are expected to rise to 1.123 billion lbs. at the end of November.
Lawmakers this week will race to get a continuing resolution (CR) agreed to before the Dec. 20 timeline for stopgap spending for fiscal year (FY) 2025 that began Oct. 1. The ag sector awaits final decisions on disaster aid, a one-year extension of the 2018 Farm Bill and whether a last-minute compromise will produce billions in farmer aid. The Federal Reserve’s next meeting on interest rates takes place on Tuesday and Wednesday, with a 25-basis-point cut to interest rates widely expected. Key will be whether the Fed signal a pause ahead in cutting rates. The final estimate of third quarter GDP will be released on Thursday, with the personal consumption expenditures price index, the Fed’s preferred inflation gauge, scheduled for Friday morning. Key agricultural data includes USDA’s Food Price Outlook and Cattle on Feed Report on Friday.
CORN: March corn futures were supported by the 10-day moving average at $4.41 1/4 overnight, which marks key technical support today. Bulls are seeking to overcome resistance at $4.47 1/2 before challenging the $4.50 level.
SOYBEANS: January soybean futures bounced off uptrend support at $9.87 overnight, which continues to mark key support. Resistance stems from the 20-day moving average at$9.93 1/4 then the psychological $10.00 mark.
WHEAT: March SRW futures rebounded overnight. Bulls are looking to overcome resistance at $5.60 1/4 before tackling last week’s high close of $5.63 1/4. Support comes in at $5.55 3/4 then the psychological $5.50 mark.
LIVESTOCK CALLS
CATTLE: Choppy/higher.
HOGS: Mixed.
CATTLE: Live cattle futures and feeders are expected to open with a mostly firmer tone, though technical selling could limit gains after the open. Cattle futures are likely to be supported by reports that cattle imports from Mexico will not begin until next year. Despite earlier speculation, USDA clarified Friday that Mexican cattle imports under new protocols won’t resume until early 2025. Cash cattle prices rose for the fourth consecutive week last week, suggesting packers were short bought on needs through year end. Wholesale beef prices continue to rise, with Choice climbing $1.15 to $316.39 and Select firming $3.38 to $283.86 Friday.
HOGS: Lean hog futures are expected to open with a mixed tone. February futures rebounded Friday though gains were limited by 10-day and 20-day moving average resistance, which could spur selling efforts today. Cash fundamentals are mildly supportive, as the CME lean hog index is down a penny to $83.90 as of Dec. 12, though the index rose in three of the last eight days. The recent relative strength in the cash index despite slaughter likely peaking seasonally is a testament to the market’s strength. Pork cutout climbed $2.30 to $94.61, the highest quote since Nov. 19.