GRAIN CALLS
Corn: 1 to 2 cents higher.
Soybeans: Steady to 2 cents higher.
Wheat: SRW wheat 2 to 4 cents higher, HRW and spring wheat steady to 2 cents higher.
GENERAL COMMENTS: Wheat futures firmed overnight after unexpected deterioration in USDA crop ratings fueled concern over dryness in the U.S. Plains. Corn and soybeans were steady to slightly firmer. Malaysian palm oil futures rallied nearly 4% amid strength in vegoils and crude oil. Front-month crude oil rose over $1.50. U.S. stock index futures signal a firmer open, while the U.S. dollar index is down around 400 points.
Beijing shut parks, malls and museums today while more Chinese cities resumed mass testing for Covid-19. Some analysts are saying 20% of China’s economy is being negatively impacted by the Covid lockdowns. China reported 28,127 new domestically transmitted cases for Monday, nearing its daily peak from April, with infections in the southern city of Guangzhou and the southwestern municipality of Chongqing accounting for about half the total. The wave of infections is testing recent adjustments China made to its zero-Covid policy, aimed at making more targeted in clampdown measures.
Saudi Arabia and other OPEC oil producers are discussing boosting oil output, a move that could lower prices and help heal a rift with the Biden administration amid new attempts to blunt Russia’s oil industry, the Wall Street Journal reported. Delegates are considering raising output by up to 500,000 barrels a day. The move could come the day before the European Union is set to impose an embargo on Russian oil.
Another round of excessive heat is expected in Argentina over the next five days with highs rising through the 80s and 90s Fahrenheit and a few extremes reaching over 100 degrees, World Weather Inc. said. The country will be dry through the weekend, except for some rain in southern Buenos Aires and La Pampa this weekend.
In Brazil, top growing states of Mato Grosso do Sul to Rio Grande do Sul are expected to receive some rain today and Wednesday, but then be dry through early next week, World Weather said. Those areas “will be closely monitored for rainfall in the second week of the outlook, since without it there could be a little concern over crop moisture and future development potential.”
Crop Consultant Dr. Michael Cordonnier kept his Brazil soybean and corn production estimates unchanged at 150.00 MMT and 125.50 MMT, respectively, and he retained a neutral bias toward both crops. He also kept his estimates for Argentina’s soybean and corn production unchanged, both at 50.00 MMT, but he has a lower bias for corn, citing unfavorable conditions and delayed planting.
One of the two largest railroad unions said Monday it had rejected a new labor deal brokered by the White House, inching closer to a strike that could disrupt supply chains in December. The other union voted to ratify it. Unions and railroads are back at the negotiating table. By law, Congress can intervene to impose an agreement if the two sides remain deadlocked. A rail shutdown could further upend supply chains. The SMART Transportation Division said it would head back to the negotiating table with railroads with a goal of reaching a deal by Dec. 8. If no agreement is reached, the union could strike Dec. 9.
Taiwan purchased 43,400 MT of U.S. milling wheat.
CORN: Late Monday, USDA reported the U.S. corn harvest at 96% complete as of Sunday, up from 93% a week earlier. March corn traded within the previous session’s range overnight, with initial support seen at the 100-day moving average of $6.57 3/4, slightly under today’s low.
SOYBEANS: January soybeans overnight pushed above the 10-day moving average at $14.37 and reached $14.40 1/4, the contract’s highest intraday price since Nov. 16. Further resistance is seen at the 200-day moving average of $14.48 1/2.
WHEAT: USDA late Monday reported 32% of the U.S. winter wheat crop in “good” or “excellent” condition as of Sunday, unchanged from a week earlier and one percentage point below analysts’ expectations. Acreage rated poor-to-very poor rose to 33% from 32%.
When USDA’s weekly crop condition ratings are plugged into the weighted Pro Farmer Crop Condition Index (0 to 500-point scale, with 500 being perfect), the HRW crop dropped 1.7 points to 269.0, which was 70.6 points below the five-year average. The SRW rating inched up 0.5 point to 357.5 and has improved each week since the initial rating, though that was still 4.3 points below the five-year average.
LIVESTOCK CALLS
CATTLE: Steady-firmer
HOGS: Steady-weaker
CATTLE: Live cattle futures may extend Monday’s climb to one-month highs as tight supplies support firm cash outlook. Live steers averaged $152.89 last week, up 18 cents from the previous week, the seventh straight weekly gain and the highest average since spring 2015. Cash cattle are expected to trade higher again this week as market-ready supplies are tightening significantly, while packers are ramping up slaughters to build supplies for the holiday season. Choice beef cutout values rose 70 cents Monday to $255.57, up from a four-week low Friday. Movement totaled 112 loads. February live cattle rose 87.5 cents Monday to $156.725, the contract’s highest close since Oct. 27. January feeder cattle rose $1.85 to $182.625, the highest close since Sept. 20.
USDA after today’s close will detail frozen meat stocks at the end of October. The five-year average is a 17.6-million-lb. increase in beef stocks and a 14.4-million-lb. decline in pork stocks during the month.
HOGS: Lean hog futures may face pressure from an ongoing seasonal erosion in cash fundamentals The CME lean hog index is down 80 cents to $86.97 (as of Nov. 18), the lowest since Feb. 7. Rising slaughter and pork production are pressuring wholesale pork. Pork cutout values fell $1.45 Monday to $91.99 as weakness in six of seven primal cuts sent the average to an 11-month low. However, movement rose sharply, to 370 loads. Seasonal pressure on cash fundamentals will limit buyer interest in nearby December hog, though bullish prospects once the seasonal pressure concludes should limit selling in deferred futures. February lean hogs rose 60 cents Monday to $90.15.