Vegoils turn higher overnight.
Grain futures are mixed this morning with soybeans holding psychological $12 and bouncing as rapeseed and canola markets turned sharply higher along with bean oil creating a lift for beans on the crush. Cash rapeseed in Europe is now quoted at $0.80 per pound with anticipation that world soy oil demand will look towards the US as it is the cheapest in the world.
Tuesday afternoon, crop progress reports reflected that corn is 41% harvested versus a 31% average, soybeans or 49% finished ahead of the 40% average. Yield reports in the Eastern Midwest continue to be disappointing and are expected to decline further during the 2nd half of harvest. Downed corn is notable and Illinois. There is a continued argument that the January final corn yield will be lowered by several bushels.
Wheat futures were disappointed overnight, with Egypt canceling their wheat tender for November/early December supply amid the ongoing rally in the global cash market. Egypt is balking at current prices, and the market viewed this as negative, with French milling wheat declining $3 a metric ton (9 cents) from yesterday’s new high close. Egypt doesn’t have much time to hesitate as they have poor coverage, and Russia’s wheat export tax will reach $60 per ton in the 2nd half of October. Spot Russian FOB wheat is $319 per ton today versus $315 a week ago, and it’s anticipated it will reach $325-330 by late month. Egypt is hoping for its actions to create a correction in price.
The market is awaiting Chinese soy buying, as they are short-bought to satisfy their Phase 1 trade obligations at the end of the year. Do recall last year that China made large multi-million metric ton purchases over several weeks last year at a short period of time, but they had already been covered in the futures market as they were seeking the cash supplies.
The current forecast maintains continuous rainfall impacting the Southern and Eastern Midwest into Saturday with a projected regional totals of up to 2-3 inches across MO, IL, IN and OH. In addition, the Dakotas are anticipating anywhere from .50-2.00 inches across the region over the next 40 hours.
Cattle futures corrected yesterday further from last week’s rally, while feeder cattle posted firmer gains on the week feed grain pricing yesterday. Cash markets are mostly quiet, with small numbers reportedly traded in Texas and the Western Midwest, but volumes are not enough to call a trend for the week. The beef market remained weaker through Tuesday, with the choice cutout down a nickel and select falling $2 to a $0.09. Yesterday’s WASDA data showed fourth-quarter beef production raised slightly, with prices forecasted near $127. First-quarter production was raised 2% in the 2nd quarter increased by 3% from the September data.