GRAIN CALLS
Corn: 1 to 3 cents higher.
Soybeans: 7 to 10 cents higher.
Wheat: 1 to 5 cents higher.
GENERAL COMMENTS: Soybean futures rose overnight for a third consecutive session and posted a 2 1/2-month high on strong demand. Corn and wheat also firmed behind corrective buying following recent drops to multi-month lows. Malaysian palm oil futures fell 0.5%, while front-month crude oil rallied around $3. U.S. stock index futures signal a firmer open and the U.S. dollar index is mildly weaker.
USDA reported daily sales of 118,000 MT of soybeans to China and 718,000 MT of soybeans to “unknown destination,” both for the 2022-23 marketing year. Today’s announcement follows four separate daily purchases by China since Nov. 23 totaling 640,000 MT.
Badly needed rain will fall in northern Argentina in two waves over the next five days, with central and north regions receiving the first wave Friday into Sunday and a second wave reaching east-central and northern regions, World Weather Inc. said. Amounts of 0.50 to 1.50 inches, with local totals in excess of 2.00 inches are possible. Rain relief from persistent heat will improve conditions, “but drought will prevail,” with net drying expected in southern Argentina through Monday, the forecaster said.
Brazil will produce a record soybean crop of 153.5 MMT in 2022-23, according to the third estimate from Conab, unchanged from last month. Conab cut its Brazilian corn crop estimate by 570,000 MT from last month to a still-record 125.8 MMT. Conab raised its 2022-23 Brazilian soybean export forecast to 96.6 MMT, up 140,000 MT from last month and kept the 2022-23 corn export forecast at 45 MMT.
Mexico has offered to extend a deadline to ban genetically modified (GMO) corn until 2025 and is working on a proposal to overhaul its plan, Economy Minister Raquel Buenrostro said Wednesday. Buenrostro said President Andres Manuel Lopez Obrador had told the U.S. his country could delay the contentious GMO corn ban until 2025, a year later than previously expected.
Russia will not eliminate grain export duties, Agriculture Minister Dmitry Patrushev said. “This is a mechanism that makes it possible to untie the domestic grain price from the external one,” Patrushev said. Russia introduced the grain duty mechanism in June 2021, providing for floating export duties on wheat, corn and barley, with the generated revenue going back to producers in the form of subsidies.
Russian President Vladimir Putin said his invasion had already yielded “significant” results and he would not mobilize more troops. Speaking at a televised meeting, he also acknowledged the risk of a nuclear war was growing but insisted Russia would only ever use nuclear weapons in response to an attack. A spokesman for America’s State Department said, “any loose talk of nuclear weapons is absolutely irresponsible.”
The U.S. exported $17.5 billion of ag goods in October against imports of $17.1 billion for a trade surplus of $424 million during the first month of fiscal year (FY) 2023. Ag exports declined modestly from $17.7 billion in October 2021, but imports rose significantly from the year-ago figure of $14.8 billion.
South Korea purchased 69,000 MT of South American corn. Japan purchased 154,957 MT of wheat in its weekly tender, including 62,902 MT U.S., 64,620 MT Canadian and 27,435 MT Australian. Philippines tendered to buy 110,000 MT of feed wheat and 135,000 MT of soymeal – both optional origin.
CORN: USDA reported net U.S. corn sales totaling 691,600 MT during the week ended Dec. 1, up from 602,700 MT the previous week. Trade expectations ranged from 300,000 to 950,000 MT. Top buyers included Mexico (333,100 MT, including decreases of 32,400 MT) and China (204,900 MT, including 189,200 MT switched from “unknown destinations”).
SOYBEANS: USDA reported net weekly U.S. soybean sales totaling 1.716 MMT, more than double 693,800 MT the previous week and easily surpassing trade expectations from 600,000 MT to 1.2 MMT. China led buyers at 839,600 MT, including 396,000 MT switched from unknown destinations and decreases of 108,200 MT.
January soybeans overnight pushed above last month’s high of $14.78 1/2 and reached $14.82 3/4, the contract’s highest intraday price since Sept. 21.
WHEAT: Net weekly U.S. wheat sales for 2022-23 totaled 189,900 MT, up from 155,500 MT the previous week and at the low end of trade expectations ranging from 150,000 to 350,000 MT. Lead buyers included China at 65,000 MT.
March SRW wheat rose to $7.55 1/4 overnight as the market extended a modest rebound from the drop to 14-month lows earlier this week.
LIVESTOCK CALLS
CATTLE: Steady-firm
HOGS: Steady-weak
CATTLE: Live cattle may generate buying interest following Wednesday’s drop to three-week lows behind strength in wholesale beef and an outlook for longer-term cash market strength. But price upside may be limited by signs a recent cash rally is leveling off. Cash cattle trade has yet to turn active, with only a few animals changing hands around steady prices in the Southern Plains thus far. Feedlots in the northern market passed on steady bids yesterday in hopes packers will raise prices later this week. December live cattle futures finished Wednesday at a $4.495 discount to last week’s average cash cattle price, reflecting traders’ negative attitudes. A month-long drop in wholesale beef appears to have spurred renewed demand. Choice beef cutout values surged $6.31 to $248.96 on strong movement of 174 loads.
USDA reported net weekly U.S. beef sales of 1,600 MT for 2022 primarily for China (4,800 MT, including decreases of 300 MT) and Japan (1,600 MT, including decreases of 1,100 MT). Net sales of 16,300 MT for 2023 were primarily for South Korea (13,100 MT).
HOGS: Lean hog figures may face pressure from weakness in wholesale pork and signs the cash market hasn’t posted a seasonal low. After a 15-cent gain on Wednesday, the CME lean hog index is down 16 cents today (as of Dec. 6), signaling a seasonal low is not yet in place. December lean hog futures finished yesterday at a modest discount to the cash index, signaling traders aren’t yet convinced a seasonal low is in place. Wholesale pork resumed a recent slide, as the cutout average plunged $5.37 to an 11-month low at $84.45, driven by a drop of over $20 in bellies. USDA reported net weekly pork sales reductions of 7,900 MT for 2022. Net sales of 2,400 MT were reported for 2023.
The U.S. exported 301.1 million lbs. of beef during October — a record for the month. Beef shipments increased 25.3 million lbs. from September and 26.6 million lbs. from October 2021. Through the first 10 months of 2022, the U.S. shipped 2.993 billion lbs. of beef, up 5.1% from the same period last year, driven by a 26% increase in exports to China.
U.S. pork exports totaled 539.7 million lbs. in October, up 26.7 million lbs. from September and 487,000 lbs. above last year. Through the first 10 months of this year, U.S. pork shipments totaled 5.198 billion lbs., down 12.1% from the same period last year as exports to China plunged 54%.