GRAIN CALLS
Corn: 1 to 3 cents lower.
Soybeans: 11 to 14 cents lower.
Wheat: SRW 2 to 4 cents lower; HRW 3 to 5 cents lower; HRS 2 to 4 cents lower.
GENERAL COMMENTS: Corn and soybeans continue to face persistent selling pressure while wheat futures turned lower as well despite early corrective gains overnight. Inflation data from the EU and the UK has indicated inflation is stickier than expected, similar to the CPI report last week in the US. This sent risk assets lower overnight as expectations of higher for longer interest rates concern the market. Front-month crude oil futures are modestly lower while the U.S. dollar index is over 150 points higher, supported by higher interest rates.
The Biden administration is set to announce today the redesignation of Iranian-backed Houthi rebels in Yemen as specially designated global terrorists, the Associated Press reports. This decision comes in the wake of multiple attacks by the Houthis on commercial vessels in the Red Sea. The group has claimed these attacks as a response to Israel’s military actions in Gaza following an attack by Hamas on Oct. 7.
Market penetration of genetically modified crops in China could reach 85% within three to five years once the industry is fully commercialized, GMO developer Beijing Dabeinong Technology said. Dabeinong said its forecast is based on the experience in the U.S., Brazil and Argentina, where GM corn and soybeans are widely planted. China, long cautious about GM technology, has opened up to commercial planting of GM corn and soybeans this year, granting seed breeding and sales licenses to 26 companies in certain provinces.
China’s troubled property market ended last year with the worst declines in new home prices in nearly nine years, despite government efforts to prop up the sector. New home prices in December logged their steepest drop since February 2015, while property sales measured by floor area fell 23% in December from a year earlier. Property investment by developers in December fell at the fastest annualized clip since at least 2000. For 2023, property investment dropped 9.6%, roughly the same as the slide in 2022.
CORN: March corn futures continue to face persistent selling pressure. Bulls are eyeing resistance at $4.43 1/2, then $4.47, ultimately targeting the 10-day moving average at $4.54 1/4. Meanwhile, support stands at the contract low at $4.40 3/4 with little backing until $4.25.
SOYBEANS: March soybean futures are failing to garner any bullish momentum. Bulls are seeking a daily close above the 10-day moving average at $12.44 1/2, with additional resistance at $12.34 and $12.24 1/4 on the way. Support stands at $12.16 then Friday’s for-the-move low at $12.03.
WHEAT: March SRW futures faced steady selling pressure for the past three consecutive sessions, though saw mild profit taking early overnight. Bulls are targeting resistance at $5.87 1/4, $5.96 then the 10-day moving average at $5.99 1/4 on continued strength, while support stands at $5.82, with little backing until $5.70 1/2.
LIVESTOCK CALLS
CATTLE: Higher.
HOGS: Higher.
CATTLE: Live cattle futures and feeders are expected to open with a firmer tone as prices continue to grind higher on the daily bar chart. While last week’s average cash cattle price slipped 54 cents from the prior week to $173.47, futures surged on Tuesday, marking the highest daily close since November. Packers are likely short-bought on cash cattle due to the winter storms last week, leading to likely increased trade this week, though Friday’s USDA Cattle on Feed Report is likely to push trade into the latter half of the week. Wholesale beef prices continued to surge, as Choice cutout rose $3.57 to $294.99, marking eight-straight days of gains from the Jan. 4 seasonal low. Select cutout jumped $7.42 to $279.98.
HOGS: Lean hog futures are expected to open with a firmer tone following Tuesday’s late-session strength. Despite weakness in the morning, February lean hog futures rebounded strongly to end the session, leading to likely followthrough strength today. The CME lean hog index continues to rebound from the Dec. 29 low, firming 30 cents to $66.85 today (as of Jan. 15), marking gains in five of the last six days. The recent weakness in February futures narrowed the premium to the index to just $3.925, which could encourage bulls. Wholesale pork prices firmed 73 cents to $87.79 on Tuesday with modest gains in each individual cut.