GRAIN CALLS
Corn: 2 to 4 cents higher.
Soybeans: 10 to 12 cents higher.
Wheat: SRW 8 to 10 cents higher; HRW 10 to 12 cents higher; HRS 9 to 12 cents higher.
GENERAL COMMENTS: Soybeans and wheat led corrective strength overnight while corn saw more modest gains. Unrest in France persists, with a no-confidence vote expected on Wednesday, which has brought increased volatility and concern to the currency markets. The U.S. dollar index gave up a portion of yesterday’s gain overnight and is down around 225 points, while front-month crude oil futures are trading solidly higher.
South American crop consultant Dr. Michael Cordonnier raised his Brazilian soybean crop estimate another 2 MMT to 170 MMT, noting the only regional concern for dryness in Brazil was in western Parana, southern Mato Grosso do Sul, western Santa Catarina and parts of Rio Grande do Sul. He maintains a neutral/higher bias toward the crop. Cordonnier left his Brazilian corn crop forecast at 125 MMT. In Argentina, Cordonnier left his production forecasts at 57 MMT for soybeans and 48 MMT for corn, with a neutral bias toward both crops.
Most of the world’s airlines are not doing enough to switch to sustainable aviation fuel (SAF), according to a study by Brussels-based advocacy group Transport and Environment, which also found too little investment by oil producers in the transition. Currently, SAF makes up about 1% of aviation fuel use on the global market, which needs to increase for airlines to meet carbon emission reduction targets. A lack of investment by major oil players, who have the capital to build SAF processing facilities, is hampering the market’s growth, the study says. SAF also costs two to five times more than regular jet fuel. The study noted 87% of airlines are failing to make meaningful efforts to meaningfully adopt SAF into fuel usage – and even those who are trying could miss their own targets without more investment.
Citigroup economists, analyzing the Phase One trade deal from Donald Trump’s first term, report that China significantly underperformed on its import commitments. China fulfilled less than 60% of the agreed $200 billion increase in purchases for 2020-21 compared to 2017 levels. Economists argue this underscores the difficulty in addressing the U.S./China trade imbalance, likely to remain a focal point in Trump’s second term.
CORN: March corn futures followed soybeans and wheat higher overnight. Additional strength finds resistance at $4.36 1/2, which is reinforced by downtrend resistance at $4.40 3/4. Support comes in at $4.33, the 40-day moving average, then yesterday’s low of $4.29 3/4.
SOYBEANS: January soybean futures surged higher overnight. Prices are nearing the upper end of the recent sideways range, eyeing resistance at $9.98. Initial support stems from the 10-day moving average at $9.90 1/2, with firmer backing from $9.83 1/4.
WHEAT: March SRW futures posted strong corrective gains overnight. Bulls are eyeing initial resistance at $5.56 3/4, the 10-day moving average, before targeting downtrend resistance at $5.61 1/4. Initial support stems from $5.47 1/4 while additional weakness finds support at last week’s low of $5.43.
LIVESTOCK CALLS
CATTLE: Choppy/lower.
HOGS: Choppy/lower.
CATTLE: Live cattle futures and feeders are expected to open with a mostly weaker tone in a continuation of yesterday’s weakness. February live cattle futures saw continued selling pressure Monday despite last week’s cash cattle average surging $3.58 to $189.97. Traders are anticipating the availability of December contracted supplies, strong purchases the past couple of weeks and the fact that packer margins are still solidly in the red will weigh on the cash market in the coming weeks. Wholesale beef firmed, with Choice cutout climbing $2.49 to $313.01 Monday while Select rose $2.70 to $277.00.
HOGS: Lean hogs are expected to open with a mostly weaker tone as seasonal cash market weakness is likely to weigh on futures. The CME lean hog index is down another 85 cents to $84.36 as of Nov. 29, just $1.135 above December futures’ closing price on Monday. Losses in the index have accelerated and will be hard to ignore if continued, but traders are anticipating cash hog losses will ease sooner than later. Pork cutout was up another $2.35 to $92.66 Monday, led by strength in hams, though all cuts except butts posted gains.