Corn futures were a little higher Monday morning, two days ahead of the Fed rate decision, where it is widely expected they will raise interest rates, likely putting pressure on commodities. The US dollar was up .17% to 97.73 while gold is down and crude oil is below $35. The Chinese yuan is weaker at 6.4558, its lowest value against the dollar since mid-2011, surpassing even the surprise devaluation of Aug 11, 2015. March corn remains above the $3.72 support level and resistance is found at the 3.815 level. The trade awaits the much-anticipated changed as Argentina’s new finance minister stated Friday that they will likely cut grain export taxes this week. The transition from El-Nino to La-Nina next year could signal drier pattern for US 2016 growing season. March corn futures moved 0.75 cents higher to $3.76 early Monday morning, while May gained 1 cent to $3.8125.
Just over one week until Christmas, soybean futures were a little lower, in part as trading volume can be lower this time of year. Brazil’s Abiove increased their 2015/16 soybean export estimate to 55 million tonnes from the 53.8 million tonne estimate in October, while CONAB see 57.5 million tonnes for soybean exports. Brazil’s government estimates their soybean production higher to a record 102.5 mmt, from 100 mmt and up 6.5% from the previous season, yet Oil World forecasts 95 mmt due to dryness. The El-Nino pattern remains the strongest on record, NOAA says, also giving La-Nina a 31% probability between Jul-Aug ’16. The November NOPA crush report will be released at 11:00 a.m. Tuesday. January soybeans were 1 cent lower to $8.6975 early Monday, while Jan soyoil lost 35 points to 31.01 cents per pound and January meal climbed $1.10 to $274.80.
Wheat futures were traded lower to start the week. The commitment of traders report showed funds remain near-record short 70,980 contracts in wheat, covering only 6,344 contracts. The Rosario exchange expects Argentine wheat production to increase to 9.6 mmt, compared to the 9.4 mmt estimate last month and their wheat planted area was raised to 3.45 million hectares from 3.40 million. France may be in “wheat overload” in 2016. El-Nino has caused the downgrade of Australian winter wheat to 23.3 mmt this year from 23.7 harvested in 2014 as farmers contended with an usually dry spring in additional to heavy rains and winds in November. March CBOT wheat futures lost 1.75 cents to $4.89 per bushel early Monday, while Mar KC wheat fell 0.5 cents to $4.82, and March MWE slid 0.5 cents to $5.0725.
Live cattle traded at or near contract lows last week, plagued by an oversupply of market ready beef. Boxed beef cutouts were lower Friday with choice down 0.58 to 202.50 and select down 2.04 to 186.43. Cattle slaughter for last week was at 581,000 head, compared to 560,000 last weekand 570,000 a year ago. Poor weather conditions including rain and snow may slow operations feedlots. February live cattle lost 0.07 cents to 126.25 cents/pound at the close Friday, while April futures gained 0.05 to 127.35. January feeder cattle fell 0.63 cents lower to 152.12 cents/pound Friday, and March feeders lost 0.58 cents to 151.12.
Nearby lean hogs closed lower on profit taking from previous sessions gains on Thursday. Country hog prices moved 0.14 higher to 51.63 and the lean hog index fell .08 to 56.22. Carcass value rebounded on strength in loins (+$0.94), butts ($0.02), picnics ($1.50), hams (+$0.42) and bellies (+$1.14). Ribs were $1.53 lower. Pork cut-out: $72.66, up $0.56. CME cash lean 12/07: 56.32, up .10. While the opportunity for pork to gain holiday meat market share still exists, large supplies have so far outweighed even the record decrease in pork stocks from the October cold storage report. Hog slaughter for the week was at 1,754,000, compared to 1,750,000 last week and 1,722,000 a year ago. February hog futures closed down 0.025 cents to 59.225 cents/pound.
Cotton futures were lower Friday morning. In Wednesday’s WASDE, the production was forecast at 13.03 mil (480 lb bales), down 2% from last month and down 20% from last year, due mainly to lower production in North and South Carolina. Domestic milling remained unchanged, yet exports were reduced 200,000 based on lower available supply and lagging sales today. Yield is expected to average 768 lbs per harvested acre, down 70 lbs from last year and down 14 pounds/acre from their Nov estimate. Global projections show lower production, consumption and ending stocks compared to November. Global production is down 1.9 mil bales. Projected world trade is up 1.0 mil bales. World ending stocks are now projected at 1.7 mil bales down from last month’s 104.4 mil bales projection. Mar cotton moved lower 0.11 to 63.66 cents/pound, while May cotton lost 0.14 to 64.41 cents/pound.