Bean oil and soybeans lead the overnight grain price recovery.
Grain futures were initially lower overnight, as StoneX released their yield expectations putting corn at 177.5 BPA and soybeans at 50.8 BPA. StoneX is typically a high guesser, and they bumped their yields by .6 on corn in .8 on soybeans from their August yield. Crop ratings have declined since August 1, when the USDA did their initial assessments, and yield data declines typically occur into September data on this. StoneX chose to go against the trend. Grain futures recovered overnight with soybeans adding to the 2nd day of gains while corn is still processing the corn production. As Malaysian palm oil futures were higher, soybeans were pulled higher in the morning session on a swift rally on bean oil and canola.
It is hoped that in the next week that Gulf traders will return to offering FOB/CIF offers once again to world importers as they better understand the damage to facilities and when power might be restored. Like Katrina in 2005, it will take 2-3 weeks to get back to normal operations, with pent up demand then stepping forward. LDC Port Allen facility is reporting that it has power and is waiting for the lower Mississippi River to reopen so that vessels return to start loading grain. Other exporters (besides Cargill Reserve, which suffered structural damage) are making facility assessments and awaiting power. Visually these facilities look like they suffered only minor damage. Yet, engineers are combing through the plants looking for any structural faults. It’s hoped that by later today or early next week that these assessments will be completed.
CBT trading resumes in the overnight trade on Monday. All eyes will be on the US Gulf and the progress in restoring electricity and assessing when the Mississippi River channel can be reopened. Parts of the French Quarter saw their lights go on Thursday, which was a beacon of hope with Entergy finishing their damage assessment and offering a plan for electrical restoration.
A progressive weather pattern is indicated for the US with a high-pressure Ridge to hold across the Western US for a few days before pushing eastward and expanding into the Central US. This will produce an above-normal Plains and Western US temperature pattern with more limited rainfall chances next week and diminished rainfall for the Central US into mid-September. A storm system is pushing across the W Midwest with rainfall south into Kansas and across E Iowa. There is no indication of any tropical systems that would strain the recovery effort of NOLA. There is no evidence of any frost risk for Central US crops into September 15, with the S Midwest corn/soybean harvest to get underway in a few weeks. The warm/ dry flow will push crop maturity while enough rain falls for wheat seed germination. The best chance for Kansas rain occurs in the next 36 hours. The extended range forecast is forecast warm with mostly dry weather to aid the early harvest effort.
Live cattle and feeder futures crumbled yesterday through major moving averages, confirming a potential top that was put in last week Tuesday. Cash cattle trade for Thursday was limited on light demand. Sales this week have so far been limited to Nebraska, where live trade has been $1-2 lower at $126 and dressed trade has been $1-4 lower at $200-203. Boxed beef values were weaker again on Thursday. The choice-value slipped $.53, and the select value was down $2.60. The beef outlook is bearish into the end of the month as domestic demand seasonally slows. Steer carcass weights bottomed in June and have been moving higher since. The latest slaughter data showed an average carcass of 903 Lbs, 7 under last year, but 11 Lbs over average. Rallies that occur in the cattle market will now be sought after with increased cattle hedging. We recommended weeks ago to hedge into the burst to new highs created last week in the winter and spring contracts.