Grain futures firm overnight.
Grain futures firmed overnight after yesterday's late day selling tied to crude oil prices declining from inventory builds and Russian Pres. Putin announced he would help alleviate Europe's tight energy situation. It remains to be seen how much of a dent in the crisis Russia can create, but Nord Stream 2 is close to being certified by the Germans, and this is just the push and prop to get past the controversy of the pipeline being brought online.
The October debt crisis looks to be pushed back until December, as the Senate is poised to raise the US debt limit. The house will pass the bill, which Biden is assured to sign. This allowed a sizeable 24-hour rally in the stock indexes late yesterday, matching the US dollar weakening late in the session.
China is back after the week long holiday, and it's anticipated that China will become very active in the coming weeks to help meet obligations under Phase 1. It was announced late yesterday that Pres. Biden and Chinese Pres. Xi will hold a virtual meeting before the end of the year. China must satisfy Phase 1 before tariffs can be reduced in the crucial upcoming Phase 2 talks. Today China has purchased 16-16.5 MMTs of beans and 12 MMTs of US corn. Aggressive purchases could start to be seen in the coming weeks, which would lead to credence the lows currently being made in soybeans with corn sustaining values well above $5.00 on the board and continuing its rally that can on September 10.
Malaysian palm oil futures drifted slightly overnight, sustaining its large explosive rally that's been experienced over the past month. Even December Paris wheat futures held gains overnight after its sharp lift to new contract highs this week. Midwest cash basis levels are continuing to firm as end users are concerned that farmers will put away as much of their harvest as possible. Forward minimal sales are being delivered, and the pipeline that has not been fully supplied since last winter will look to stay that way. Next week's average yield guesses are coming in lower on corn by 1/2 a bushel, whereas soybeans are also looking to be ½ a bushel higher than the September data. (176 corn, 51.1 beans)
Weather continues to appear warm and dry into the weekend before scattered showers break out on Sunday in the Midwest and Northern Plains. Rain totals of .25-1.25″ are anticipated, with the southern plains only receiving a few light showers with totals less than .25″. And those rains in the South favor the Eastern Plains. Central Brazil will receive needed heavy rainfall in the next 10 days, focusing on Parana, MGDS, and Mina Gerias. Southern Brazil will hold into a drier pattern, where Argentina as complete dryness for another 10 days. Early corn seeding has stopped with Cordoba winter wheat under stress.
Cattle and feeder cattle closed higher for the 3rd day in a row on Wednesday and closed firm. Cash trade did get underway with the Texas Panhandle trading at cattle $124, Kansas show list treated $2 higher at $124. slaughter is 36,000 head at midweek, 11,000 more than last week and 8000 head more than a year ago. Larger production continues to weigh on beef prices, with the choice value yesterday being down $1.09 and select dropping $4.87. Retail prices in August reached a record high of $7.644/LB, which was up 18% from the prior year. While prices continue to set new highs, domestic consumption has begun to decline. Consumption in July was off 8% from last year in August was down 2.4%, which is a 5-year low.