GRAIN CALLS
Corn: 1 to 3 cents higher.
Soybeans: 9 to 12 cents higher.
Wheat: SRW 1 to 3 cents lower; HRW 1 cent lower to 1 cent higher; HRS steady to 2 cents lower.
GENERAL COMMENTS: Corn and soybeans favored the upside overnight, while wheat saw some profit taking, though went into the break well off session lows. Outside markets were volatile this morning following the jobs reported that pegged the labor market as adding 199,000 jobs in November, up from expectations of 180,000 and October at 150,000. That marks the second consecutive month of job additions below the average monthly gain of 240,000 observed over the last year. Unemployment came below expectations of 3.9% at 3.7%. Fed fund futures fell following the report, reducing expectations of rate cuts by the Federal Reserve in 2024. Front month crude oil futures saw corrective buying overnight and are trading around $1.50 higher, while the U.S. dollar index is trading around 450 points higher on heightened interest rates.
USDA reported daily sales of 136,000 MT of soybeans and 110,000 MT of SRW wheat for delivery to China and 165,000 MT of corn for delivery to unknown destinations- each for the 2023-24 marketing year.
USDA won’t update its corn and soybean crop estimates in the Crop Production Report at 11:00 a.m. CT, though there will be a revised cotton production forecast. Any changes to domestic use in the Supply & Demand Report will likely be limited, with traders expecting ending stocks to come in at 2.152 billion bu. for corn (2.156 billion bu. in November), 243 million bu. for soybeans (245 million bu. in November) and 684 million bu. for wheat (same as November). The bigger focus will be global production forecasts, especially for South America.
India lowered the limit of wheat traders and millers can hold to increase domestic availability and moderate prices, the food ministry said. Traders and wholesalers can now hold 1,000 MT of wheat stocks, half of the previous limit, The government is also prepared to release an additional 2.5 MMT of wheat in the domestic market if required to rein in prices, along with potentially slashing the import duty on Russian wheat. The Indian government also extended the export ban on deoiled rice bran until March 31, 2024.
The UN Food and Agriculture Organization global food price index dropped 10.6% from year-ago, matching the revised October level that was the lowest since March 2021. Increases in the price for vegoils, dairy products and sugar were fully offset by decreases in cereal grains and meat. Compared to year-ago, prices declined 2.4% for meat, 16.9% for dairy, 19.4% for cereal grains and 19.8% for vegoils, while sugar prices jumped 41.1%.
CORN: March corn futures traded most of the overnight session between the 20-day and 40-day moving averages. Bulls are eyeing a daily close above the 40-day moving average at $4.90, which would mark the first close above that level since mid-October. Additional resistance lies at $4.93, which has brought heavy selling interest over the last month and a half. Support lies at $4.86 1/4, $4.83, then $4.79.
SOYBEANS: January soybean futures surged overnight. Prices remain in a firm four-week downtrend, with prices testing the downtrend line overnight at $13.23. Strength above this mark targets converging moving average resistance from $13.30 to $13.35. Support lies at $13.10, the psychological $13.00 mark, then $12.96.
WHEAT: March SRW futures continue to see impressive strength, despite daily sales momentum likely running out of steam. Bulls are targeting initial resistance at $6.45 before additional resistance at the psychological $6.50 mark. Support lies at $6.32 1/4 then $6.21 3/4, though overbought conditions may have traders targeting firmer resistance at $6.12 1/2.
LIVESTOCK CALLS
CATTLE: Lower.
HOGS: Lower.
CATTLE: Live cattle futures are expected to open with a mostly weaker tone, though corrective buying could underpin the market following the open. February futures tried and failed to rally Thursday, though sellers were also unable to push prices much below Wednesday’s for-the-move low. Cash cattle trade continues to slip lower as the week goes on, nearly guaranteeing another weekly decline. The cash average so far this week is $170.47, below last week’s $174.45. Wholesale beef prices remain high seasonally, though continue to face sustained weakness on a near-term basis. Choice cutout fell 72 cents to $289.84 Thursday, while Select dropped $1.07 to $258.83. Movement remains quite strong, totaling more than 200 loads for the second straight day at 218 loads.
HOGS: Lean hog futures are expected to open with a weaker tone in continuation of technical selling. After gapping lower, February futures saw persistent selling pressure on Thursday. The CME lean hog index made a fresh for-the-move low, falling 31 cents to $69.12 (as of Dec. 6). Traders expect sustained weakness in the index up until the December contract’s expiration on Dec. 14, as futures hold a $1.57 discount to the index. Wholesale pork prices rose 17 cents to $83.37 Thursday, with individual cuts seeing minimal prices changes from the prior day. Movement fell below the 300.0 mark for the first time since Nov. 27, totaling 268.53 loads. Pork supplies are likely peaking seasonally with this week’s kill total usually marking the annual peak, though market-ready supplies are likely to remain above year-ago levels.