Malaysian Palmoil pulls beans higher overnight.
Soybeans and corn moved higher overnight, led by an explosion in Malaysian Palmoil, which also pulled canola higher, giving soybeans new life and challenging technical resistance. The monthly Malaysian Palmoil Board Inventory Report sparked the massive rally, which pegged end of July stocks at just 1.52 MMTs. Such stocks were down 7.3% from June, with production down 5.2%. Even corn was able to bump against resistance at 560, while wheat corrected from yesterday's strong rally.
Black Sea wheat futures are strongly rising, with Dec futures at $303.75/MT. December Black Sea wheat is forecasting an export price of $8.25/Bu fob – the highest in years. Russian all wheat crop estimates continue to decline, with private Russian analysts now discussing a crop size of 75-77 MMTs due to sliding spring wheat yields. The USDA is expected to cut their Russian wheat crop estimate tomorrow to 79-81 MMTs.
A non-binding Senate Amendment was passed late Tuesday 99-0 that called for preserving the current tax rules for transferring farms/businesses and the full benefit of stepped-up asset valuation when assets are acquired from a decedent. Senate Republicans pushed the Bill to force Democrats to go on the record in protecting the current tax benefits for US farmers.
The GFS/EU weather models are in good agreement, which raises confidence in the 10-day forecast. The only real forecast uncertainty rests with tropical storm Fred and whether the storm will become a hurricane and makes landfall across the Florida Panhandle on Sunday. After that, Fred will be a slow mover across the Southeast US and produce flooding rains. The question is if Fred can alter the Central US weather pattern?
A generally dry Central US weather pattern will prevail for the next 10 days with ill-defined rains in the 11-15 day period. A few showers will dot the E Midwest in the next 36 hours before a lengthy period of dry/sunny/warm weather returns. Heat will persist across the Plains, and the W Midwest with high temps ranging from the upper 80's to the lower 100's. The E Midwest is warm with high temps ranging from the upper 80's to the lower 90's, but no real extreme heat is offered.
Cash cattle markets stayed quiet through Tuesday on limited demand, while cattle in the South are offered $1-2 higher at $123-124. The beef market rally accelerated on Tuesday. The choice cutout value jumped $5.52 to $305.32, and the select value rose $3.80 to $284.61.