Grain futures drifted overnight despite yesterday's strong recovery, with old crop corn maintaining small gains in anticipation of additional Chinese purchases being announced ahead of their meeting in Anchorage Alaska with US traders confirming Phase 1 trade obligations. Additional moisture following in the Midwest along with South America has the market stalled. End-user underlying support is expected hard breaks. There are concerns that the Delta is too wet, holding out for early corn seeding, but it's the overall Midwest moisture improvement that is focused with the upcoming spring seeding.
Today's the end of the Federal Reserve's two-day meeting, and with the US dollar trading near steady ahead of their interest rate policy announcements. It's expected interest rates will be left unchanged on the short-term, the focus will be on the Fed’s future economic outlook and potentially when will US interest rates lift itself-off the 0% floor. Most argue that it will not be until 2023, but a close vigil is being kept on US inflation with raw material prices rising sharply so far in 2021.
We are 10 trading days away from the USDA March 31 Stocks/Seeding's report. US quarterly stocks need sharp revisions and there is a likelihood of volatile number releases put on stocks and seeding's that report day. The market is now moving away from South American weather to a focus on North American acreage and spring planting. The next important South American weather event will be in May as Brazilian corn will be pollinating in a drier window due to its late planting.
The South American weather forecast is mixed with 2 additional rain events slated for Argentina while Eastern Brazil enters a period of net drying. Debate continues to rage on the size of the Brazilian soybean harvest in a wide range of 128.5-136.0 MMTs with the harvest reaching the 50% mark. A high-pressure Ridge over NE Brazil has strengthened which is forcing upper air humidity southward into Argentina and RGDS in Southern Brazil. Following needed rain in the past 48 hours of .5-2.00”, mostly dry weather will prevail for the remainder of the week before a new system pulls across Argentina on Sunday/Monday producing .4-1.50” of rain over the northern 2/3’s of the crop area. A second system is evident for late next week that will water southern areas. No extreme heat is noted.
Yesterday cattle futures went into retreat with June failing to score a new contract high by $0.20. Continued weakness in April cattle, and that contract closing just under the hundred day moving average. Cash cattle markets in the plains were untraded Tuesday. Cattle feeders in the N Plains that were impacted by last week’s winter storms will be looking for higher prices. Offers in the south have been quoted at $116-117 or $2-3 better than a week ago. The outlook at midweek holds firm. After falling for 10 of the last 11 days, the beef market uncovered demand on Tuesday. The choice cutout gained $2.16 and select was up $.72.