GRAIN CALLS
Corn: 1 cent lower to 1 cent higher.
Soybeans: 2 to 4 cents lower.
Wheat: Winter wheat 3 to 5 cents lower; HRS 1 to 3 cents lower.
GENERAL COMMENTS: Grains favored the downside overnight with corn, soybeans and wheat each trading in narrow ranges. Heightening geopolitical tensions have done little to support grain prices over the past week as the focus remains on Brazilian weather. Outside markets were supportive overnight as front-month crude oil futures saw modest gains and the U.S. dollar index saw profit taking from recent gains.
U.S., allies issue final warning to Houthi rebels over Red Sea vessel attacks. This warning comes after at least 23 attacks by Houthi rebels in the Red Sea region occurred since Dec. 19. The countries, including the U.S., Australia, Bahrain, Belgium, Canada, Denmark, Germany, Italy, Japan, Netherlands, New Zealand, Singapore and the UK, have conveyed that this warning should be considered the final one. While a senior U.S. official did not specify what actions might be taken, he emphasized the Houthis should not expect another warning. The joint statement from these nations calls for an immediate end to these unlawful attacks, as well as the release of unlawfully detained vessels and crews.
Senate Majority Leader Chuck Schumer (D-N.Y.) said he and House Speaker Mike Johnson (R-La.) are “quite close” to a deal for top-line spending, which would be the first step toward keeping money flowing for government operations after an initial Jan. 19 funding deadline for some departments, including USDA. One option is to continue providing funding at the existing levels until the end of the current fiscal year, without implementing sequestration measures. This approach would act as a year-long continuing resolution (CR), even though it would be treated as a new appropriation. But some lawmakers have cautioned against a strategy that merely maintains spending at its current levels, suggesting a desire for adjustments or changes in the budget. Of note: Some leading House Republicans are now pushing border security language as part of any funding measure.
China will use “all strengths” to accelerate the advancement and use of agricultural technology to secure higher productivity and a stable supply of crops, the agriculture ministry said. “It is necessary to intensify the application of research and development, leave no stone unturned to accelerate high-yield and high-oil soybeans, breakthrough in core technologies such as agricultural machinery in hilly and mountainous areas, and integrate and strengthen the application of technologies,” the ministry said. Beijing will promptly establish a scientific and technological innovation strategic advisory committee to provide decision-making consultation on major ag technology strategies, plans and policies, it said.
CORN: March corn futures struggle to lack buying interest despite prices remaining near contract lows. Bulls are looking to overcome resistance at $4.68 1/4 then $4.70 3/4 on corrective buying, while support stands at $4.63 3/4, the contract low of $4.61 3/4, with little backing until the psychological $4.50 level.
SOYBEANS: March soybean futures continue to consolidate on this week’s lows. Resistance stands at $12.80 with backing from the 10-day moving average at $12.97. Bears are seeking a break below Tuesday’s close at $12.73 1/2, Wednesday’s for-the-move low at $12.65 3/4, with little significant support until the psychological $12.50 level.
WHEAT: March SRW futures are working lower for the fourth consecutive session. Prices quickly fell below the psychological $6.00 mark, marking that area as initial resistance, which has backing from the 40-day moving average at $6.11 1/4, then $6.15 1/2. Meanwhile, support stands at $5.91 1/2 then $5.78 1/2.
LIVESTOCK CALLS
CATTLE: Choppy/higher.
HOGS: Choppy/higher.
CATTLE: Live cattle futures and feeders are expected to open with a mostly firmer tone on continued cash cattle market strength. Initial cash cattle trade started around $175.00 in the far northern market. While volume was light, cash cattle prices are likely to rise for the third consecutive week. Meanwhile, wholesale prices continue to fall under heavy pressure. Packers apparently have significant amounts of Choice beef to move, as cutout dropped another $6.31 to $278.03 Wednesday. Meanwhile, Select fell just one cent to $258.85, bringing the Choice/Select spread to $19.18, the narrowest since June. Wholesale beef weakness could limit packer interest in paying up for cash cattle once they have secured near-term needs.
HOGS: Lean hog futures are expected to open with a mostly firmer tone, driven by technical buying. While February futures failed to maintain most of yesterday morning’s gap higher, prices remain near daily support and cash fundamentals do not warrant such a breakdown in futures at this juncture, though futures could continue to see increased volatility as traders await a seasonal low in the cash market. The CME lean hog index rose 14 cents to $65.19 today (as of Jan. 2). It will take more than one modest daily price gain to convince traders a seasonal low is in place, though this could trigger some buyer interest in futures. Wholesale pork prices dropped on Wednesday, falling $2.32 to $82.78 with declines seen across the board, though movement was a firm 391.4 loads, indicating packers had substantial inventory to move and there’s retailer demand on price breaks.