The grain and oilseed markets were quiet ahead of the Fed rate decision that begins today and ends Wednesday with the decision announcement at 1:00 p.m. CST. Other policy decisions, like the blender’s credit bill, will likely be finalized Friday afternoon before Congress breaks for the holiday. Monday, Argentina eliminated the corn/wheat export tax, however, changes to their currency structure have yet to be announced. The Chinese yuan devalued further Tuesday and the dollar was lower as currencies remain volatile ahead of the FOMC meeting. Support for the march contract can be found at 3.7325 and resistance at 3.81. Crude oil was higher and Dow futures point to a higher open. March corn futures moved 0.75 cents lower to $3.7825 Tuesday morning, while May lost 0.75 cent to $3.835.
Soybean futures were neutral-weaker early Tuesday after the complex firmed Monday on technical buying and the lower dollar. The trade is weighing the blender’s tax credit decision, lower Argentine export taxes, and weather-induced lower Brazilian soybean production against the backdrop of currency volatility ahead of the expected Fed rate hike. Despite weekly export soybean inspections missing expectations Monday, analysts believe the November NOPA crush report will set a record for the month at an average estimate of 161.7 million bushels. January soybeans were 1 cent lower to $8.7325 early Tuesday, while Jan soyoil lost 27 points to 30.85 cents per pound and January meal climbed $0.20 to $275.70.
Wheat futures were lower Tuesday morning after rising Monday on technical buying. Weekly wheat export inspections beat the estimates at 434,767 tonnes, though the export pace for wheat remains at its slowest since 1972. Russia ag ministry sees their 2016 crop at 104 million tonnes, 4 million higher than the estimate of SovEcon and above their 2015 harvest of 103 million tonnes. 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 2.75 cents to $4.9075 per bushel early Tuesday, while Mar KC wheat fell 1.5 cents to $4.865, and March MWE slid 0.5 cents to $5.10.
Nearby lean hogs fell after Friday’s surge that helped futures above the 40-day moving average resistance. Hog slaughter last week was at 2,426,000, compared to 2,424,000 last week and 2,262,000 a year ago. Slaughter this week is at 441,000 heard, the biggest one day kill since 452,000 on April 13. Potential for last minute holiday ham orders by retailers will be faced with competition from beef and poultry. The increased holiday demand may support futures in the near term, though seasonal increases in hog numbers combined with the early year fall-off in demand could signal lower prices. December futures settled at 55.550 cents down 0.45 cents after it expired at noon. February hog futures lost 1.10 cents to 59.45 cents/pound on the close Monday, while April hogs lost 0.65 to 64.050.
Slumping wholesale beef values pressured live cattle futures on Monday, increasing the possibility of further cash price weakness. Boxed beef cutouts were lower Monday with choice down 1.05 to 201.45 and select down 1.80 to 186.63. Cattle slaughter for last week was at 581,000 head, compared to 560,000 last week and 570,000 a year ago. Slaughter this week is at 112,000 head up from 110,000 head last week and 111,000 the prior year. Poor weather conditions including rain and snow may slow operations feedlots. February live cattle lost 2.625 cents to 123.625 cents/pound at the close Monday, while April futures lost 2.90 to 124.45. January feeder cattle fell 4.50 cents lower to 147.625 cents/pound Monday, and March feeders lost 4.50 cents to 145.625.
Cotton futures firmed Monday morning as the dollar continued lower. Last week, cotton production was lowered to 13.03 mil (480 lb bales), down 2% from last month and down 20% from last year. 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 .07 higher to 63.45 cents/pound, while May cotton gained 0.12 to 64.27 cents/pound.