GRAIN CALLS
Corn: 1 to 3 cents lower.
Soybeans: 3 to 6 cents lower.
Wheat: Winter wheat 1 to 3 cents higher; HRS steady to 2 cents higher.
GENERAL COMMENTS: Corn and soybeans saw profit-taking overnight, while wheat continued to challenge downtrend resistance. Additional profit-taking is possible today in corn and beans given the recent strong gains. Front-month crude oil futures are modestly lower this morning on corrective selling, while the U.S. dollar index is around 400 points lower, pulling back from yesterday’s more-than two year high.
USDA reported daily export sales of 198,000 MT of soybeans for delivery to China during the 2024-25 marketing year.
U.S. producer price inflation (PPI) rose less than expected in December. Factory gate prices rose 0.2% in December, down from 0.4% in November and below expectations of 0.3%. Prices in fuel and electricity led inflation. On an annual basis, PPI rose for the third straight month to 3.3%, the biggest annual rate since February 2023.
Brazilian crop estimating agency Conab raised its 2024-25 soybean crop estimate 110,000 MT from last month to 166.32 MMT, though that’s still below most private crop forecasters that are at or slightly above 170 MMT. Conab trimmed its corn production forecast by 80,000 MT to 119.55 MMT. The soybean and corn production adjustments were due to changes in planted acreage. Conab kept its 2024-25 Brazilian export forecasts at 105.5 MMT for soybeans and 34 MMT for corn.
South American crop consultant Dr. Michael Cordonnier lowered his Brazilian soybean crop estimate 1 MMT to 170 MMT, citing dryness concerns in far southern production areas and yields in central Brazil maybe not being as strong as farmers expected due to constant overcast conditions. Cordonnier left his Brazilian corn crop forecast at 125 MMT. For Argentina, Cordonnier cut his soybean and corn crop forecasts 1 MMT each to 52 MMT and 49 MMT, respectively, due to hot, dry weather.
Members of President-elect Donald Trump’s incoming economic team are discussing slowly ramping up tariffs month by month, a gradual approach aimed at boosting negotiating leverage while helping avoid a spike in inflation, Bloomberg reported, citing people familiar with the matter. One idea involves a schedule of graduated tariffs increasing by about 2% to 5% a month and would rely on executive authorities under the International Emergency Economic Powers Act, the people said. The proposal is in its early stages and has not yet been presented to Trump, the people said. Trump has denied previous reports suggesting his tariffs policy will be rolled back from levels he promised during his presidential campaign.
CORN: March corn futures consolidate overnight. Bulls are eyeing yesterday’s high of $4.77 before tackling resistance at $4.83. Meanwhile, profit-taking has bears eyeing support at $4.72, which is loosely backed by the 10-day moving average at $4.63 1/4.
SOYBEANS: March soybean futures consolidated near recent highs overnight. The overnight high of $10.56 3/4 marks initial resistance, while additional strength targets $10.66. Support lies at $10.50 with additional selling eyeing $10.43 1/2 support.
WHEAT: March SRW futures traded on either side of unchanged overnight. Bulls are looking to extend prices above the $5.45 mark to signal a low could be in place. Resistance stands at $5.50, which corresponds with the 40-day moving average at $5.51 1/4. Support comes in at $5.40 1/2 on resurgent selling pressure.
LIVESTOCK CALLS
CATTLE: Choppy/higher.
HOGS: Choppy/lower.
CATTLE: Live cattle futures and feeders are expected to open with a mostly firmer tone, supported by continued strength in the cash market. Last week’s cash cattle average jumped another $3.65 to $202.58, marking a record high for the second consecutive week. That marks eight straight weeks of gains, in which the cash cattle average has climbed $17.79. Futures continue to trade at a discount to the cash market, which is likely to limit the downside on any continued selling pressure. Wholesale beef prices were higher again Monday, as Choice cutout rose 51 cents to $333.35 while Select climbed $3.43 to $317.57.
HOGS: Lean hog futures are expected to open with a mostly weaker tone, driven by technical selling pressure. February futures tested and rejected off downtrend resistance stemming from the November high on Monday. That is likely to continue to limit buying as traders await further strength in the cash hog market to drive prices higher. The CME lean hog index is up 34 cents to $80.77 as of Jan. 10, pausing the recent price decline. Pork cutout fell $1.16 to $90.20 Monday, led by weakness in bellies, which continue to pull back from recent highs.