GRAIN CALLS
Corn: 1 to 3 cents lower.
Soybeans: Steady to 2 cents higher.
Wheat: Steady to 2 cents lower.
GENERAL COMMENTS: The grain and soy markets saw corrective buying most of the overnight session, though sellers reemerged into the break, breaking prices near session lows. Rain falling in both Argentina and Brazil on Monday likely limited buying interest. Outside markets were mixed overnight, as front-month crude oil futures saw mild corrective gains and the U.S. dollar index traded modestly higher.
South American crop consultant Dr. Michael Cordonnier kept his Brazilian crop estimates at 151 MMT for soybeans and 117 MMT for corn as he awaits production updates from Conab and USDA later this week, along with additional soybean harvest data. He favors the downside for both crops. Cordonnier also kept his Argentine crop estimates at 50 MMT for soybeans and 53 MMT for corn, while maintaining neutral-to-higher biases.
The South China Morning Post reports a “corruption crackdown in the agricultural sector of a key northernmost province has ‘far-reaching’ significance when it comes to ensuring China’s food security, according to a four-part documentary series by state broadcaster CCTV.” A total of 1,011 cases of corruption have been filed and 1,367 officials in Heilongjiang province disciplined as of November, according to the second episode of the series produced by CCTV and China’s anti-corruption agency, the Central Commission for Discipline Inspection (CCDI), which aired on Sunday.
Merchandise traffic through the Bab el Mandeb Pass in the Red Sea is 46% less than since the beginning of the attacks by the Yemeni militias on Nov. 19, and 53% less than recorded on Jan. 7, 2023, according to Port Watch data. Hapag-Lloyd and Maersk said on Monday they have not entered any agreements with Iranian-backed Houthi militants to prevent their ships from being attacked in the Red Sea, denying a report saying that some shippers had started to make such deals. German logistics giant DHL Group is advising customers to take a close look at how they manage inventories as shippers switch away from the Red Sea.
CORN: March corn futures saw corrective buying early overnight, though sellers resurfaced near the break. Bulls are seeking to hold support at $4.55, backed by Monday’s low at $4.52, then the psychological $4.50 mark. Resistance stands at $4.60 1/2, then the 10-day moving average at $4.64 1/2.
SOYBEANS: March soybean futures continue to trend lower on the daily chart. Bulls are seeking to hold support at $12.45, which is backed by $12.36, while resistance stands at the psychological $12.50 mark, $12.54, then $12.65 3/4.
WHEAT: March SRW futures posted modest corrective gains most of the overnight session, protecting last week’s low. Support stands at $5.93, $5.91 1/4, then $5.85 1/4. Bulls are targeting resistance at $6.05 1/4 then $6.10 on further corrective buying.
LIVESTOCK CALLS
CATTLE: Lower.
HOGS: Choppy/lower.
CATTLE: Lower.
HOGS: Choppy/lower.
CATTLE: Live cattle futures and feeders are expected to open with a weaker tone as technical selling is likely to persist. After failing to break out from the downtrend line stemming from September highs on Monday, bears took hold of the market, closing prices near session lows. While last week’s cash cattle average firmed for the third consecutive week, rising $1.77 to $174.01, uncertainty surrounding slaughter counts this week due to the major winter storm could further limit futures buying interest. Packers are further discouraged from keeping slaughter runs high as their margins continue to be deep in the red amid the recent strength in cash prices and weakness in wholesale beef values. Wholesale beef prices were mixed on Monday as Choice rose $1.67 to $278.83 and Select dropped 17 cents to $259.36.
HOGS: Lean hog futures are expected to open with a mostly weaker tone as futures have become extended above the CME lean hog index. Despite strength late last week, the CME lean hog index fell 11 cents to $65.74 (as of Jan. 5), marking back-to-back days of modest losses. That relative weakness is likely to keep a lid on nearby futures as traders await further confirmation of a seasonal low in cash prices, as February futures finished Monday at a $4.86 premium to today’s cash quote. Wholesale pork prices rose 82 cents to $85.02 Monday, nearing the upper end of the recent downtrend. Only picnics and hams posted losses on the day.