Strong Wheat Prices Push Grains Higher

Good Morning from Allendale, Inc. with the early morning commentary for December 14, 2020.

Grain Markets pushed higher as forecast predicts wetter weather for South America and global grain demand continues to remain strong as we head towards the end of the year.  Trade will continue to watch export numbers as well as precipitation in Argentina and Brazil.      

Last week, March corn futures were up 3.00 cents, January soybeans were down 1.50 cents, December wheat up 41.25 cents, December soymeal was down $3.90 and December soyoil was down 12 points.

CFTC Commitments of Traders showed funds new net position long +269,583 corn contracts (+270,633 last week), long +185,655 soybean contracts (+194,683 last week), short -5,692 wheat contracts (-4,397 last week), long +38,222 live cattle contracts (+39,813 last week)and long +33,584 lean hog contracts (+38,359 last week).

Private exporters reported export sales of 130,0o0 metric tons of soybean meal and cake for delivery to the Philippines during this marketing year. 

SovEcon cuts the 2021 Russian wheat crop forecast 4.3 million metric tons to 76.8 mmt due to poor conditions across 22% of winter grain areas (11-year low). Russia produced record 84 mmt wheat crop in 2020.

USDA NOPA crush report will be released tomorrow morning with trade expecting crush at 180.025 million bushels (185.245 mb last month, 164.909 mb last year).  Oil stocks estimated at 1.548 billion lbs. (1.487 bil. lbs. last month, 1.448 last year).

February lean hog futures finished the week down $3.35.  December hog futures expire today as the cash index remains above December future prices.

February live cattle futures finished the week up $0.85 and March feeders closed the week $1.125 higher.  Box beef prices fell sharply last week as trade hopes to see some stabilization this week.

Live cattle futures have seen open interest 25% under last year indicating we could see a supportive longer term market cycle.

Dressed beef values were sharply lower with choice down 0.71 and select down 2.76.  The Feeder cattle index is 136.66.  Pork cut-out values were up 1.28.

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