GRAIN CALLS
Corn: Steady to 2 cents higher.
Soybeans: 5 to 7 cents lower.
Wheat: 1 to 3 cents higher.
GENERAL COMMENTS: The grain and soy complex traded in low volume, tight ranges overnight. Buying interest increased in wheat into the break, while selling interest picked up in soybeans. Outside markets are unfavorable this morning as front-month crude oil futures continue to pull back from recent highs while the dollar index is around 100 points higher and near recent highs.
USDA reported daily sales of 170,400 MT of corn for delivery to Mexico, 187,000 MT of soybeans for delivery to Spain and 132,000 MT of soybeans for delivery to unknown destinations — each for the 2024-25 marketing year.
CR text will include direct farmer aid, disaster aid and year-round E15. Nothing is official until the text of the continuing resolution (CR) is released, which should occur today after several lengthy Monday negotiations. Besides $10 billion in farmer aid, the CR is expected to include $16 billion to $21 billion of disaster aid for crop losses due to natural disasters for 2023 and 2024 and provisions for year-round sales of E15. Of note: Senate Ag Chair Debbie Stabenow (D-Mich.) did not get her wish in moving conservation/climate funding into a one-year extension of the 2018 Farm Bill; that discussion will occur next year. Details regarding the $10 billion farmer aid package awaits final text.
The Chinese government’s efforts to limit agricultural imports are causing a soybean shortage in southern areas of the country by leading to longer-than-usual wait times at customs, traders with knowledge of the matter told Bloomberg. Some soybean crushers in the oilseed processing hub of Dongguan in Guangdong province have had to suspend operations for the last three weeks as they can’t get enough supply, said the traders. Cargoes have been delayed at the border for more than 20 days, compared with about five days to be cleared under normal circumstances, they said. Officials are taking longer than usual to do quality inspections on imported beans. China has asked traders and processors to buy less foreign grains this year in an attempt to buoy prices and support local farmers amid a slowdown in domestic demand.
South American crop consultant Dr. Michael Cordonnier cut his Argentine soybean crop forecast by 2 MMT to 55 MMT, as it appears farmers won’t switch as many hectares of corn to soybeans as anticipated. Cordonnier raised his Argentine corn crop estimate 1 MMT to 49 MMT due to expectations of more plantings. He has a neutral bias toward both crops but says weather in Argentina is starting to look “problematic.” Cordonnier left his Brazilian crop forecasts at 170 MMT for soybeans and 125 MMT for corn, with a neutral to higher bias toward both.
CORN: March corn futures continue to consolidate in an apparent bull flag on the daily bar chart. Resistance stands at $4.47 then the psychological $4.50 mark, while support lies at $4.42, the 10-day moving average.
SOYBEANS: January soybean futures continue to see relative weakness. Bulls are seeking to hold support at the contract low of $9.73 1/2 on continued weakness. Resistance stands at $9.80 then $9.87 3/4, the 10-day moving average, on a reversal higher.
WHEAT: March SRW futures saw modest strength overnight. Initial resistance stands at $5.54 1/4 with additional strength looking to overcome the 40-day moving average at $5.58 1/2. Support stands at the psychological $5.50 mark then $5.42 3/4.
LIVESTOCK CALLS
CATTLE: Lower.
HOGS: Lower.
CATTLE: Live cattle futures and feeders are expected to open lower in a continuation of yesterday’s bearish reversal, though discounts to the cash market could limit losses after the open. February futures marked a fresh for-the-move high before reversing lower and closing on session lows yesterday. Cash cattle prices firmed $3.41 last week to $194.31. The cash market has outperformed expectations over the past month, despite negative packer margins. Wholesale beef prices continue to work higher, as Choice cutout climbed 98 cents to $317.37, while Select surged $5.72 to $289.57.
HOGS: Lean hog futures are expected to open lower in a continuation of Monday’s technical breakdown. February lean hog futures broke below last week’s lows as sellers took hold of the market and settled below the cash index, negating recent premiums. The CME lean hog index is down 6 cents to $83.84 as of Dec. 13. Wholesale pork climbed 92 cents to $95.53 Monday, led by strength in ribs and bellies, while movement surged to 367.46 loads, indicating strong demand despite higher prices.