GRAIN CALLS
Corn: Steady to 2 cents higher.
Soybeans: 4 to 6 cents lower.
Wheat: SRW 5 to 7 cents higher; HRW 4 to 6 cents higher; HRS 2 to 4 cents higher.
GENERAL COMMENTS: Wheat futures led strength overnight with corn posting modest gains as well. Soybeans showed relative weakness. Weaker than expected housing starts led to selling pressure in U.S. equity markets this morning, a potential warning sign of a continued slowdown in the real estate market. Front-month crude oil futures are trading around unchanged this morning, while the U.S. dollar index is trading around 50 points lower.
The Brazilian soybean crop is rated mostly in good condition and more rains are in the forecast. As a result, South American crop consultant Dr. Michael Cordonnier raised his Brazilian soybean crop forecast by 1 MMT to 166 MMT. He maintains a neutral to higher bias, noting the only concern is dryness starting to creep into far southern areas. Cordonnier left his Brazilian corn crop peg at 125 MMT with a neutral bias. For Argentina, Cordonnier kept his crop forecasts at 57 MMT for soybeans and 48 MMT for corn with a neutral bias toward both.
USDA rated the winter wheat crop 49% “good” to “excellent” and 15% “poor” to “very poor.” On the weighted Pro Farmer Crop Condition Index (0 to 500-point scale, with 500 being perfect), the HRW crop improved 10.2 points to 330.4, driven by gains in Kansas, Oklahoma and Texas. The SRW CCI rating slipped 0.2 point to 371.3. The HRW crop is now 9.5 points above year-ago, while the SRW CCI rating is 2.9 points below last year on this date. Click here for details.
Despite the Biden administration asking Congress to provide $24 billion in aid to the U.S. ag sector, as part of a $98.4 billion disaster aid package, Congress will likely modify key provisions when they return after a one-week Thanksgiving break. Look for farm-state lawmakers to include specific language on the operation of the coming ag disaster funding to avoid how USDA implemented the last aid to farmers. Of note: Of the $24 billion for agriculture, $21 billion would allow USDA to compensate farmers and ranchers for crop and livestock losses. This is significantly above the around $14 billion in disaster aid recently cited by a USDA official.
CORN: December corn futures saw modest gains overnight. Resistance stems from the Nov. 8 close at $4.31 then the for-the-move high at $4.34 3/4. Meanwhile, selling pressure finds support at $4.25 1/2 then $4.21 1/2.
SOYBEANS: January soybean futures saw resurgent selling pressure overnight. Continued selling finds support at the psychological $10.00 mark then last week’s low of $9.86 1/4. Resistance stands at the 40-day moving average at $10.13 1/2, which capped gains the last two sessions.
WHEAT: December SRW futures continue to bounce. Initial resistance at the 10-day moving average at $5.51 3/4 limited gains overnight. Additional strength finds resistance at $5.58 3/4. Support stands at $5.42 then the Nov. 14 lose at $5.30 1/4.
LIVESTOCK CALLS
CATTLE: Choppy/lower.
HOGS: Mixed.
CATTLE: Live cattle futures and feeders are expected to open with a mostly weaker tone, driven by renewed technical selling pressure. After reversing higher the past two sessions, December live cattle futures have challenged downtrend resistance stemming from the October high, which is likely to encourage technical selling pressure, especially considering futures have narrowed discounts to the cash market. Meanwhile, surging Choice cutout could limit seller interest, as Choice beef climbed $3.94 to $307.28 Monday, while Select dipped 69 cents to $275.45.
HOGS: Lean hog futures are expected to open with a mixed tone. Discounts to the cash market are likely to keep losses limited, but returning seasonal weakness in the cash market has traders hesitant to buy futures. The CME lean hog index is down another 78 cents to $88.49 as of Nov. 15, the sixth decline in the last seven days and the biggest drop during that span. December lean hog futures finished Monday $8.465 below today’s cash quote. Pork cutout sunk 4 cents to $97.07 Monday, led lower by losses in ribs and bellies. Movement dropping to 252.42 amid prices declines is concerning for bulls if it continues.