TOP STORIES

Hogs Extend Trend Higher to Start Month -- Market Talk

11:13 ET - Lean hog futures trading on the CME are up 0.9%. If the most-active contract holds on to its current gains today, then that'll make it roughly 10% higher that its traveled in nearly two weeks -- bringing prices to levels last seen in October. For futures, the move higher appears to be linked to prospects of higher demand with the Christmas holiday approaching. Pork cutout prices have been rising as well, with the carcass cutout prices up over the past five days -- rising $1.61 per hundredweight yesterday to $79.96 per cwt. Meanwhile, live cattle futures are up 0.5% Tuesday. (kirk.maltais@wsj.com, @kirkmaltais)

STORIES OF INTEREST

US Farmer Sentiment Turns Lower -- Market Talk

10:04 ET - The Purdue University/CME Group Ag Economy Barometer--a measurement of farmer optimism about the agricultural economy--fell 16 points in November to a reading of 167, falling off of an all-time high set in October. "Producers were more pessimistic about future economic conditions on their farms in November than they were just a month earlier," says James Mintert, the barometer's principal investigator and director of Purdue University's Center for Commercial Agriculture. "This is the opposite of what happened following the November 2016 election." According to Mintert, farmers say that they expect to see higher regulations and a weaker safety net for US farmers, driving sentiment lower amid the election of President-elect Joe Biden in November. (kirk.maltais@wsj.com; @kirkmaltais)

Wheat Drops as Larger Russian Export Quota Mulled

Wheat for March delivery fell 1.3% to $5.77 1/4 a bushel on the Chicago Board of Trade Tuesday as traders considered how a larger-than-expected Russian quota of wheat exports will affect the market.

Corn for March delivery fell 1.2% to $4.20 3/4 a bushel.

Soybeans for January delivery fell 0.6% to $11.62 a bushel.

Big Long Position in Corn a Risk Factor For Prices -- Market Talk

09:35 ET - The latest commitment of traders report, released yesterday by the CFTC, showed a net long among managed money traders at over 266,000 contracts. With such a sizable long position, any bearish news could spark a major sell-off in corn, says Doug Bergman of RCM Alternatives. "The biggest problem for corn right now is the historically large fund long that is at risk of being liquidated if sell triggers start to get hit," says Bergman. However, he notes, corn export demand is expected to remain strong, since US corn is still competitively priced versus the rest of the world -- even with corn trading on the CBOT at its highest levels in over a year. The most-active corn contract is up 0.4% pre-market Tuesday. (kirk.maltais@wsj.com; @kirkmaltais)

FUTURES MARKETS

Movement in US Dollar Spurs Higher Livestock Futures -- Market Talk

15:15 ET - Weakness in the US dollar throughout November appears to be spurring buying interest in livestock futures, says independent trader Dan Norcini. "There seems to be a general bid coming into the commodity complex as a whole of late," says Norcini. "A lot of it has to do with what is taking place with the US Dollar." The USD index trading on the Intercontinental Exchange dropped 0.6% today, and has shed 3% since November 1. Meanwhile, livestock futures inched up today - with live cattle futures finishing up 0.3% to $1.13175 per pound and lean hog futures finishing up 0.3% to 68.75 cents per pound. (kirk.maltais@wsj.com; @kirkmaltais)

CASH MARKETS

 
Estimated U.S. Pork Packer Margin Index - Dec 1 
 
 This report reflects U.S. pork packer processing margins. The margin indices 
are calculated using current cash hog or carcass values and wholesale pork 
cutout values and may not reflect actual margins at the plants. These 
estimates reflect the general health of the industry and are not meant to 
be indicative of any particular company or plant. 
Source: USDA, based on Wall Street Journal calculations. 
All figures are on a per-head basis. 
 
Date     Standard Margin       Estimated margin 
         Operating Index         at vertically - 
                             integrated operations 
 
Dec  1       +$ 36.18            +$ 36.51 
Nov 30       +$ 42.12            +$ 42.53 
Nov 27       +$ 43.06            +$ 42.91 
 
* Based on Iowa State University's latest estimated cost of production. 
A positive number indicates a processing margin above the cost of 
production of the animals. 
 
Beef-O-Meter 
This report compares the USDA's latest beef carcass composite 
values as a percentage of their respective year-ago prices. 
 
                                  Beef 
          For Today              Choice  104.6 
      (Percent of Year-Ago)      Select  104.7 
 
USDA Boxed Beef, Pork Reports 

Wholesale choice-grade beef prices Tuesday fell 28 cents per hundred pounds, to $243.40, according to the USDA. Select-grade prices rose 65 cents per hundred pounds, to $223.08. The total load count was 130. Wholesale pork prices fell $2.80, to $76.05 a hundred pounds, based on Omaha, Neb., price quotes.

(END) Dow Jones Newswires

December 01, 2020 17:34 ET (22:34 GMT)

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