** Quarterly Overview**

Q3 Overview 2022 – Q4 Outlook 2022 PDF

Q3-2022 Quarterly Commodity Spreadsheet

Grains & Meats

Grains and Meats Weekly Component Report PDF-11.30.2022

Grains and Meats Weekly Component Report Spreadsheet-11.30.2022



Over the past week, soybean futures rallied 2.33%, while corn edged 0.11% to the upside. Wheat posted a 2.21% loss since November 23.

January soybean crush spreads at $2.4025 cents per bushel moved 14.25 cents lower from the level on November 23, which tells us nearby soybean meal and oil prices underperformed the raw oilseed futures. The January crush spread moved to a high of $2.7925 on October 31, while the continuous contract reached a new record peak of $3.4025, supporting soybean futures and remain elevated at near the $2.40 level. The current level of the crush spread should continue to provide support for soybean futures prices.  

January ethanol at $2.2875 per gallon wholesale was only 0.11% lower as gasoline futures edged slightly lower over the past week and corn posted a marginal gain. Corn is the primary ingredient in US ethanol production. The January gasoline-ethanol spread fell to 9.72 cents on November 30, with January NYMEX gasoline at a premium to January ethanol swaps. Ethanol slightly outperformed gasoline over the past week, pushing the spread marginally lower.

The March KCBT-CBOT wheat spread moved 2.0 cents lower to a $1.0425 cents premium for the KCBT hard red winter wheat over the CBOT soft red winter wheat since November 16. At $1.0425, the spread remains far above the long-term norm of a 20-30 cents premium for the KCBT wheat, a sign that consumers continue to hedge their future requirements because of supply and price concerns.

Aside from feeding the world, corn and beans play an increasing role in powering the world as the demand for biofuels rises. The fundamentals continue to favor the grains, but bull markets rarely move in a straight line.

As I wrote over the past weeks, when grains were moving lower:

“I view the corrections as buying opportunities but as the grain and oilseed markets have been falling knives, picking bottoms is dangerous.”

Grains were mixed over the past week, but I believe the current environment will support prices.

Prices remain elevated during the offseason. The level of the soybean crush spread, KCBT’s premium over CBOT wheat, and elevated traditional energy prices remain bullish for the grains. The USDA will release the final WASDE report of 2022 on Friday, December 9.


The short-term trend in wheat futures is in a slightly bearish pattern. The short-term path of least resistance in soybeans is bullish, while corn futures are consolidating. The longer-term trends remain bullish.

Open interest in CBOT soybean rose by 1.85%, while the metric in the corn futures moved 10.0% lower since November 22 as December futures rolled to March. CBOT wheat open interest dropped by 11.84% over the past week as the contracts rolled. I continue to expect lots of two-way volatility in the grain and oilseed futures markets and continue to favor the upside. The bottom line is grain prices face a supply-side shock as the war in Ukraine continues to prevent the usual flow of agricultural products to worldwide consumers. The war has raged across Europe’s breadbasket throughout the entire 2022 crop year, which has a significant and long-range impact on the global supplies. Expect grain and food prices to remain elevated over the coming months. Logistics around the Black Sea Ports will continue to cause volatility in the grain markets along with the weather conditions in the Southern Hemisphere as Brazil, Argentina, and other production below the equator enters the growing season. The political change in Brazil, replacing President Bolsonaro with President Lula, could cause some price volatility in the agricultural sector as Brazil’s currency responds to a shift towards a socialist government. There were no significant changes over the past week from a fundamental or technical perspective. I continue to believe any significant selloffs in the grains will be buying opportunities if the war in Ukraine continues.


  • We are long the WEAT ETF product. I rate WEAT a hold at $8.04 per share.
  • We are long two units of the CORN ETF at $26.27 per share. I rate CORN a hold at $26.42 per share.
  • We are long the JJG product at $71 per share. I rate JJG a hold at $76.00 on November 30.
  • We are long the JJA product at $23.34 per share. I rate JJA a hold at $24.98 on November 30.
  • We are long the SOYB product at $24.95 per share. I rate SOYB a hold at $27.75 on November 30.
  • We are long ADM at $71.16 per share. I rate ADM a hold at $97.50 on November 30.
  • We are long BG at $85.18 per share. I rate BG a hold at $104.84 on November 30.



Live and feeder cattle futures for February and January delivery edged marginally higher, with a 0.16% gain in the fat and a 0.68% rally the feeders. February lean hog futures fell 3.89% over the past week.

The February lean hog versus live cattle ratio moved higher to the 1.82400:1 level on November 30 from 1.75030:1 on November 23 as the spread moved away from the long-term norm of 1.4:1. Pork is historically less expensive than beef for February delivery, and beef got more costly over the past week as hogs declined and cattle moved higher. The USDA will release its December WASDE report on Friday, December 9, updating its supply and demand forecasts for the animal proteins for the final time in 2022.


The medium-term trends on the weekly charts reflect higher lows and higher highs in the cattle futures, but the trend is less bullish in the feeders. The February lean hogs futures short-term trend turned lower above the 90 cents per pound level. Seasonality is often a powerful force in the meat markets, but production costs remain higher because of the highest inflation in over four decades. High feed and other input costs will continue to underpin meat prices over the coming months. Cattle and hogs remain in mostly bullish trends during the offseason winter months.


  • We bought the COW ETF product at the $37.02 level, leaving room to add on declines. I rate COW a hold at $39.48 per share.

A Final Note

As we head into the final month of 2022, the OPEC and Fed meetings will determine the path of least resistance of markets across all asset classes. Meanwhile, demonstrations in China could set the stage for an economic comeback in the world’s second-leading economy if the government eases the COVID-19 protocols. In a year where the leading stock market indices have posted significant losses, end-of-the-year tax loss selling could impact markets over the coming weeks.

Commodity prices have come down from the 2022 highs, but the potential for future rallies is high. The geopolitical landscape remains tense as the war in Ukraine continues to threaten peace in Europe and causes the divide between the US/NATO and Russia to widen. China could hold the key to the global economy over the coming weeks if the government does not react harshly to the current demonstrations. Meanwhile, the dust has yet to settle in the crypto arena as the saga of the FTX bankruptcy continues to grip the asset class.

I expect another volatile year in the commodities asset class in 2023. I am a buyer of dips in December and will maintain core long positions into 2023.

Thank you for your continued support!

Warm regards,

Andy Hecht



Any investment involves substantial risks, including, but not limited to, pricing volatility, inadequate liquidity, and the potential complete loss of principal.  This document does not in any way constitute an offer or solicitation of an offer to buy or sell any investment, security, or commodity discussed herein, or any security in any jurisdiction in which such an offer would be unlawful under the securities laws of such jurisdiction.