GRAIN CALLS
Corn: Steady to 2 cents lower.
Soybeans: 2 to 4 cents lower.
Wheat: Steady to 2 cents lower.
GENERAL COMMENTS: There was no overnight grain trade as markets remained closed for Christmas, with grain and livestock markets resuming trade with a hard open at 8:30 a.m. CT. Corn, soybeans and wheat are each poised for slightly weaker openings. Front-month crude oil futures are modestly higher this morning and near recent highs, while the U.S. dollar index is slightly lower.
The Section 45Z Clean Fuel Production Credit, replacing the Section 40B credit for sustainable aviation fuel (SAF), is set to take effect on Jan. 1, 2025. While final regulations are pending, the U.S. Department of Treasury has committed to issuing guidance before the end of the Biden administration on Jan. 20. Treasury expects to release preliminary guidance soon, enabling renewable fuel producers to demonstrate eligibility and claim the credit for 2025 production. This guidance will provide basic requirements for compliance and claims. Producers must register by Jan. 1, 2025, to qualify.
Russia will remain the world’s leader in wheat exports in 2024-25, though IKAR agricultural consultancy projects its share of global wheat trade will fall to 20% from 25% the previous year. IKAR projects Russia will export 41 MMT of wheat in the upcoming 2025-26 marketing year.
The World Bank raised its forecast for China’s economic growth in 2024 and 2025, but warned that subdued household and business confidence, along with headwinds in the property sector, would keep restricting growth. Thanks to the effect of recent policy easing and near-term export strength, the World Bank sees China’s GDP growth at 4.9% this year, up from its June forecast of 4.8%. Although growth for 2025 is also expected to fall to 4.5%, that is still higher than the World Bank’s earlier forecast of 4.1%.
Due to Wednesday’s Christmas holiday, export sales data for the week ended Dec. 19 will be published Friday morning.
CORN: March corn futures look to challenge the Dec. 11 high of $4.51 1/4, which is quickly backed by the Oct. 2 high of $4.52 1/4. A reversal lower finds support at $4.45, which is reinforced by the 20-day moving average at $4.51 1/4.
SOYBEANS: January soybean futures have struggled to overcome stiff resistance at $9.78. Strength above that mark targets resistance at $9.91. Support lies at $9.66 then the psychological $9.50 mark.
WHEAT: March SRW futures remain near recent lows. Support lies at $5.33 then the contract low of $5.29 1/4. Resistance comes in at the 10-day moving average at $5.42 3/4 then the psychological $5.50 mark.
LIVESTOCK CALLS
CATTLE: Choppy/lower.
HOGS: Choppy/higher.
CATTLE: Live cattle and feeders are expected to open with a mostly weaker tone as long liquidation is likely to weigh on futures, though steep discounts to the cash market could limit losses after the open. Liquidation of long positions has been a featured activity in live cattle futures since the February contract rose to the highest level since March on Dec. 16, despite strength in the cash market. With cash trade expected to be limited this week and next, and funds heavily long, there’s risk of more liquidation pressure, despite futures trading well under cash.
HOGS: Lean hog futures are expected to open with a mostly firmer tone, supported by continued strength in cash fundamentals. The CME lean hog index looks to have posted an early seasonal low, traders will keep a close eye on the cash market for any potential weakness. Cutout and cash hog trade today will give a look into post-holiday demand as well. February lean hog futures hold a modest discount to the CME lean hog index. Price action in futures is likely to remain light through the holiday period, closing tracking movement in the cash index.