New historical highs seen in commodities overnight.
Grain futures were sharply higher overnight, as you can smell the inflation in the air. New historic all-time highs were hit for Malaysian palm oil overnight, along with oats domestically doing the same thing, hitting $6 .36. Cotton also made new contract highs overnight, rallying $ 4.76, hitting a high of 116.39. China has fully returned from its Golden Week Holiday, and the Dalian futures market there posted sharp gains for Palm oil and soybean oil. This gives credence to soybeans having posted a low at the opening of October, almost at the midpoint of harvest.
Overnight the Senate voted to increase the US debt limit through December 3, with the US dollar dropping towards 94.00. The US jobs report came out this morning, showing the September unemployment rate falling to 4.8% versus 5.2% in the prior month. Oil futures are back to testing the $80 value on anticipate strengthening in the economy.
Next Tuesday’s USDA crop production report will be released on Tuesday at 11:00 a.m. CDT. Average guesses are for corn to drift slightly to 175.9 BPA, with soybeans at 51.1 BPA. Demand is resurfacing, with end-users hoping to buy into negative data. Demand is about to become a daily story, as the Gulf is anticipated to be 90% restored by the end of next week. In addition, China is likely to embark on an aggressive Ag purchasing spree, with soybeans, ethanol, corn, and wheat being targeted.
US weather models have a Central US Ridge holding in place with several vigorous short waves producing showers/thunderstorms across the N Plains, W Midwest, and E Plains next week. Thus, an open Midwest harvest window is offered for the next 4-5 days, before rain/wind will cause multi-day slowdowns. The Brazilian weather forecast continues to show improvement with showers across Central and Northern Brazil into October 20. An upper ridge of high pressure keeps early corn seeding slow, with Córdoba winter wheat areas under stress.
Cattle futures had an explosive week marking solid gains four days in a row since last Friday’s low close near technical support of 120 for October cattle and 125 December. Negotiated cattle markets across the Plains feeding areas were quiet on Thursday, with most trade is taking place near 125. Boxed beef values on Thursday were mixed, with choice falling another dollar 1.32, $7 lower on the week, while select was up dollar 1.53. $0.40 on the week. Carcass weights continue to advance as they do seasonally, and they’re at last year’s record high. The latest slaughter report showed an average weight at 914 pounds, 10 pounds lighter than last year, but 9 pounds above average. December cattle will run into major resistance at the 50-day MA, at 131.50-132.00.