GRAIN CALLS
Corn: Steady to 1 cent higher.
Soybeans: 4 to 5 cents lower.
Wheat: HRW and SRW wheat 5 to 6 cents lower, spring wheat steady to 1 cent lower.
GENERAL COMMENTS: SRW wheat futures extended this week’s drop near three-month lows overnight, while soybeans also fell as surging Covid cases in China fueled concern over demand. Corn futures firmed slightly. Malaysian palm oil futures gained 2.5% amid expectations for strong exports, while front-month crude oil was down nearly $3. U.S. stock index futures signal a weaker open, while the U.S. dollar index is down over 300 points.
Grain and livestock markets will trade normal hours today. Markets and government offices are closed on Thursday for Thanksgiving. As a result, there will be no Pro Farmer market updates tomorrow. On Friday, markets are open for an abbreviated trading session from 8:30 a.m. to 12:05 p.m. CT.
USDA reported a daily sale of 110,000 MT of soybeans for delivery to China during the 2022-23 marketing year. It marked China’s first USDA-announced U.S. soybean purchase since Nov. 9.
The risk of a rail strike in early December is growing after some unions voted down the deal the White House brokered in September. But based on the performance of stocks tied closest to rail transport, investors expect the issue to be resolved without a strike. Dec. 9 is now the first possible rail strike as the Brotherhood of Railroad Signalmen (BRS) union said it will set the end of its cooling off period relative to negotiations with railroads at Dec. 8, now in sync with two other unions that are still negotiating with railroads after rejecting the initial labor agreement.
Chinese cities imposed more curbs to rein in rising Covid cases. In Beijing, malls and parks were shut and once-bustling areas of the capital resembled ghost towns as authorities urged people to stay home. Other cities across China have imposed localized lockdowns as infections neared highs seen in April. Localities accounting for nearly one-fifth of China’s total GDP are under some form of lockdown or restrictions, Nomura estimated earlier this week, a figure that would exceed the GDP of Britain.
Much-needed rainfall was noted in portions of the coarse grain and oilseed areas in Argentina during the past week, World Weather Inc. said. “However, many central parts of the nation were missed by the greatest rainfall for the second week in a row, leaving soil conditions much too dry for crops,” the forecaster said. “Hotter temperatures and limited rainfall in this coming week will likely translate into more serious crop stress and greater concern about the long term outlook in those areas.”
Brazilian corn exports could soar next year if farmers harvest a full crop and Chinese demand is strong, Brazil’s National Association of Grain Exporters (Anec) said Tuesday. The head of Anec said Brazil could export between 40 MMT and 50 MMT of corn in 2023, up from Anec’s projection of 20.6 MMT this year. Brazilian state statistics office Conab forecasts 2022-23 Brazilian corn exports at 45 MMT.
Ukraine has harvested 39 MMT of grain from this year’s crops to date, according to the country’s ag ministry. It forecasts production will fall to 51 MMT from a record 86 MMT in 2021. Planting plans for corn next year partly will depend on the condition of the winter wheat crop when it breaks dormancy next spring but the ag ministry says area planted to corn could decline.
Ukrainian grain traders’ union UGA said it expects the country to export 13 MMT of wheat and 20 MMT of corn during the 2022-23 July-June season. “The export of grain and oilseeds in the 2022-23 season can be expected at the specified level, if the work of Ukrainian Black Sea ports for export remains until the end of the season,” UGA said in a note.
China will auction another 40,000 MT of state-owned wheat reserves on Nov. 30. Demand has been high for the older wheat, with all of the supplies offered for sale purchased thus far.
Turkey tendered to buy 455,000 MT of milling wheat from unspecified origins, including supplies already stored in domestic warehouses.
CORN: March corn traded within the previous session’s range overnight after falling as low as $6.59 1/4, just above support at the 100-day moving average of $6.58 1/2. Last week’s low at $6.53 1/2 stands as key initial support.
SOYBEANS: January soybeans dropped under the 20-day moving average at $14.35 overnight and fell as low as $14.25 1/2. Initial support is seen at the 50-day moving average at $14.19 1/2.
WHEAT: March SRW wheat overnight fell as low as $8.04, the contract’s lowest intraday price since $7.98 3/4 on Aug. 26. Price pressure in part reflects reports of French wheat sales to China and talk of Polish or German wheat being booked in the U.S.
LIVESTOCK CALLS
CATTLE: Steady-firm
HOGS: Steady-mixed
CATTLE: Live cattle futures may continue trading near one-month highs behind ongoing cash market strength. Cash negotiations have been limited so far this week but are expected to pick up today, and while trade could drag into Friday, most packers and feedlots likely will aim to finish cash activity today ahead of Thanksgiving. Traders continue to expect firmer prices compared with last week’s $152.89 average, a 7 1/2-year high. A recent upturn in wholesale beef may also support futures. Choice beef cutout values rose $1.06 Tuesday to $256.63 on strong movement of 157 loads. February live cattle fell 30 cents Tuesday to $156.425, after posting a one-month high at $156.875 Monday.
HOGS: Nearby lean hogs may continue to take pressure from a continuing slide in cash fundamentals, but February futures have been trending higher for nearly three weeks behind support from tight longer-term supplies. The CME lean hog index is down another 43 cents to $86.54 (as of Nov. 21), the lowest level since Feb. 4 but still $13.39 (18.3%) above year-ago. Last year, the cash index bottomed Nov. 29 and then began a strong recovery into August. Slumping wholesale pork is also a bearish headwind for nearby futures. Pork cutout values fell 69 cents Tuesday to $91.30, the lowest since mid-January. Movement slowed to 265 loads. Sideways futures trading may continue today ahead of Thanksgiving holiday. February lean hogs fell 7.5 cents Tuesday to $90.075.