GRAIN CALLS
Corn: 1 to 4 cents higher.
Soybeans: Steady to 2 cents lower.
Wheat: Steady to 2 cents lower.
GENERAL COMMENTS: Corn mildly favored the upside overnight, fueled higher into the break by export sales coming in above expectations at a marketing year high, while wheat and soybeans were slightly lower. All three traded in relatively tight ranges overnight. Front-month crude oil futures surged overnight to the highest level since mid-November, while the U.S. dollar index surged over 600 points higher as bond yields sunk due to PCE inflation, the Fed’s preferred inflation metric, coming in above expectations.
USDA Secretary Tom Vilsack told Reuters Chinese buyers took advantage of lower prices for corn in Brazil, leading to a nearly 20% drop in U.S. exports to China, but he expected the numbers to rise again over time. At the same time, he said the U.S. government was working hard to reduce American exporters’ over-reliance on China and other big markets and encourage greater diversification. Vilsack told the President’s Export Council USDA would start accepting applications for an initial $300 million to help U.S. agricultural exporters break into new markets outside of China, Canada, Mexico and the European Union.
EPA offers March 28 deadline to finalize rule allowing year-round E15 sales in eight states. This move comes in response to a lawsuit brought by the attorneys general of Iowa and Nebraska. EPA initially proposed allowing year-round E15 sales in these states following their petition on the matter. Although there were reports suggesting a delay in finalizing the rule, court filings now establish March 28, 2024, as the target date for EPA to issue the final rule. EPA stated it had received numerous administrative petitions requesting a delay related to its proposal to permit E15 sales.
Russia’s IKAR agricultural consultancy said it expects Russia’s 2024-25 grain crop to total 145 MMT, including 92 MMT of wheat. IKAR projects Russia will export 63 MMT of grain in 2024-25, including 48 MMT of wheat.
Export sales for the week ended Nov. 23:
Corn: Net sales of 1.928 MMT for 2023-24, a marketing year high and up 35% from the previous week and 54% from the four-week average. Increases came primarily for unknown destinations (726,600 MT), Mexico (294,600 MT) and Japan (258,000 MT). Traders expected sales between 600,000 MT to 1.2 MMT.
Soybeans: Net sales of 1.895 MMT for 2023-24, nearly double the previous week and up 10% from the four-week average. Increases came primarily from China and unknown destinations. Sales came in above expectations between 850,000 MT and 1.5 MMT.
Wheat: Net sales of 622,800 MT for 2023-24, the most since early October. Increases came primarily from China and unknown destinations. Sales were up sharply from the previous week and the four-week average and above expectations of 200,000 to 500,000 MT.
This morning, USDA reported daily sales of 134,000 MT of soybeans to China during the 2023-24 marketing year.
CORN: March corn futures saw relative strength overnight, continuing the recent trend of moving opposite beans and wheat. Bulls are seeking a daily close over initial resistance at $4.81, which is backed by the 20-day moving average at $4.85, while bears are looking to take out support at $4.73 1/2 then Wednesday’s for-the-move low of $4.70 1/2.
SOYBEANS: January soybean futures traded within Wednesday’s range overnight, pinned between moving average support and resistance. Resistance stands at the 20-day and 10-day moving averages at $13.47 1/2 and $13.49, respectively, backed by downtrend line resistance at $13.65 1/2. Support stands at 40-day moving average support at $13.41 1/2, then $13.29 3/4.
WHEAT: March SRW futures traded in a tight range overnight, struggling against initial resistance at the 20-day moving average, currently at $5.86. Bulls are targeting resistance at $5.91 1/2 above that mark, before a test of the psychological $6.00 mark. Support lies at the 10-day moving average, currently at $5.80 3/4, with firmer backing from $5.70 1/2.
LIVESTOCK CALLS
CATTLE: Lower.
HOGS: Choppy/higher.
CATTLE: Live cattle futures are expected to open with a mostly weaker tone as corrective buying has seemed to have run out of steam. Cattle futures surged on Wednesday morning though bulls failed to sustain buying efforts. Cash fundamentals have continued to erode, as futures buying has yet to translate to higher bids in the cash cattle market. This week’s cash average is currently $174.82, well below last week’s average of $176.77. Wholesale beef prices fell Wednesday, as Choice declined $1.14 to $297.03 and Select dropped $2.26 to $264.09. USDA reported net beef sales of 6,300 MT for 2023, down 37% from the previous week and 49% from the four-week average.
HOGS: Lean hog futures are expected to open with a mostly firmer tone as the market shows relative strength following Tuesday’s capitulation low. The CME lean hog index fell another 13 cents to $71.53 (as of Nov. 28), though Tuesday’s average cash price was higher than Monday’s (remember the index is a two-day average). While there may be slight underlying support in the cash market, seasonally rising hog weights, which are well above year-ago and the five-year average, are likely to keep a lid on prices. Wholesale pork prices fell 83 cents to $83.97 Wednesday, the lowest since late May. USDA reported net pork sales of 21,200 MT for 2023, down 20% from the previous week and 35% from the four-week average.