Soybean oil brings support to soybeans.
Grain futures initially worked lower overnight, as StoneX released their crop guesses for October 12, with a 176.6 BPA on corn and 51.3 BPA on soybeans. Wheat futures retreated after an explosive run over the past three sessions and found double-digit losses in the night when French milling wheat also turned lower in decline $3.50 a metric ton.
Soybean oil turned back sharply higher in the night, as Malaysian palm oil again rocketed higher and closed at a new record high of 4855 RM/MT for a spot contract. This also brought in new highs for the September move in canola, along with rapeseed values pressing higher. Palm oil is now lifting and throwing support to soybeans as soybean meal seeks value.
47% of the winter wheat crop has been planted, with 19% emerged. Better rains are needed across the Plains for even wheat seed germination. Unfortunately, the Plains forecast is arid into October 15. Nevertheless, harvest is anticipated to exceed 50% for soybeans and corn later this week.
Ethiopia is tendering for 300,000 MTs of world wheat, while Taiwan launched a tender for 48,000 US origin wheat. It’s anticipated that Egypt will also be in today for November wheat. Most end-users only have 45-60 days of forward coverage.
China returns from their Golden Week Holiday our Wednesday evening; they’re Thursday morning in China. Traders will be gauging if China ramps up its US Ag commodity buying following the news that our trade representative will be pushing China for Phase 1 compliance. The US will not move forward with a Phase 2 agreement to remove tariffs unless compliance is met on Phase 1.
Warm/dry weather looks to persist through Sunday before scattered showers break out across the Eastern Midwest, producing a .25-1.25” of rain. The Plains will only receive a few light showers, but totals will most be less than .20”. There is no evidence of a storm system produce needed rains over the Plains states that would aid seed germination. The Plains dryness is becoming worse in the North American forecast. Argentina and far Southern Brazil are where dryness continues to linger for another 10 days. An upper Ridge of high pressure will keep early corn seeding at bay, with Córdoba winter wheat coming under stress.
The cash cattle markets were quiet yesterday while a small number were traded in Kansas at steady to one dollar higher, quartered at hundred $24. The boxed beef market continues to search for a low and was mixed on Monday. The choice fell $3.18, but select gained $0.32. From the August high, the choice value is now down $59, led by loins which have dropped the hundred and one dollars/CWT., With the box beef market seasonally bottoming in the next two weeks. Yesterday’s sharp rally confirmed significant support at $125 the December contract, with October futures likely confirming that $120 will be the floor for October.