Wheat futures carrier the overnight strength.
Wheat futures extend their rally overnight from yesterday's friendly Stocks and Production numbers, while corn also continues recovering. Soybeans stabilized overnight, as spreads adjust favoring wheat and corn over beans. Soybeans are still the protein that gets affected by the rising values of feed grains. On wheat, its likely Stats Canada, when they release their final crop estimate in late autumn, will be lowering spring wheat supplies, along with Russian export forecasts are still 3-4 million tons 2 high, all this amid record important global consumption implies will eventually see nontraditional customers come to the US in the 2nd half of the crop year. The Australian wheat crop looks to be large, but logistic issues will limit shipments out of the country at 22-24 million tons. This country is a Covid prison with movement around the country extremely limited.
Spot cotton this week has rallied to $1.05 per pound, and this is a new 10 year high, as new crop cotton futures are also rallying to $0.86. Inflation is making its rounds from commodity to commodity. There will be extreme competition in the Texas/Delta crop seedings that will compete with corn and soybeans for next year.
As of this morning, we are 5 hours away from a Friday close. In retrospect the August 27 Friday close ahead of Hurricane Ida, wheat futures are $0.15 higher, corn futures are within $0.12 of full recovery of value since that day, while soybeans are $0.70 lower. Valuations for wheat and corn are on an upward trajectory, while beans have seen their balance sheets loosened.
The spot new crop soybean and corn ratio this week has plunged to $2.33-$2.40 and expected returns are starting to favor corn seeding over soybeans for 2022. US soybean stocks are now in the 250 Mil to possibly 300 Mil bushel range unless South American yield losses from the La Niña manifest into the winter, soybeans will be a follower of feed grain pricing, with carry outs absorbed if South American runs into trouble. The La Niña forecasts continue to intensify, and a rather strong event is probable for the November-February period. Near complete dryness is forecasted in Argentina for another 2 weeks, with September 1 through October 15 rainfall totaling just 40-60% of normal across the principal Ag belt. Only spotty rainfall is forecasted in the key areas of Central Brazil over the next 10 days.
The Central US forecast is drier across the southern and central plains, and rainfall across Texas, Oklahoma, and Kansas is week has been disappointing. As of this morning, 24-hour accumulation has been recorded just 1/2 an inch to an inch and 1/2. Near zero rain impacted the western half of the HRW wheat belt. Light to moderate rains moves into the Delta and Southern Midwest this weekend. A warm and dry week resumes next week.
The cattle trade was lower yesterday on follow-through technical selling, as cash markets turned quiet on Thursday while the beef market extended monthly losses. The choice cutout value fell $2.35 to $294.98 and select was down $2.48 at 206 $9.32. Choice beef ends the month down $47 a hundredweight but still $84 higher than a year ago and record for late September. Despite the week basis through September, feedlots moved cattle to the Packers at a decent clip. Cattle slaughter on Thursday totaled 121,000 head, which brought the monthly total to 2.73 Mil head. This was 1% less than a year ago was still 5% above the ten year average. Slaughter was down from year ago, sewer carcass weights. The latest slaughter report showed an average steer weight of 912 Lbs or 7 Lbs less than a year ago. The cash market continues to look range-bound with that price range in the $120-125 price.