Grain futures pause recovery price run.
After becoming extremely overbought from 5 straight higher sessions since the USDA crop report low, grain futures pressed yesterday highs overnight and faltered into profit-taking in the morning hours. Export sales were deemed strong, with 50 million bushels of corn and 105.8 million bushels of soybeans sold. Good exports were anticipated, with the Gulf playing catch up for lost September activity. However, no confirmation of China purchasing winter wheat is disappointing.
Bean oil retreated overnight, part of the soybean weakness as Malaysian palm oil ended down 102 ringgets, while Chinese soy oil still rose another 2% to new contract highs. Chinese corn overnight is at $10 .27/Bu. Turkey is tendering for another 300,000 MTs of optional origin wheat, which will likely go to the Black Sea region. Russian wheat FOB offers are at new seasonal highs of $320-325/ton. Russian wheat tax is anticipated to reach $70 per ton in the next 30 days.
Argentine’s 2-week forecast remains arid, with October 1-November 4 percent rotation estimates at 30-60% of normal in Buenos Aries, Córdoba, and Santa Fe. The longer-term La Niña base forecasts call for the continuation of below-normal precip and above normal temps. Soil moisture loss in Argentina is becoming concerning the market does not focus on this until December. The crop is being planted now with estimates of 30% completion.
Cattle futures overcame morning weakness and closed higher Wednesday. Cattle in Texas sold for $124, unchanged from last week, while sales in Nebraska were from $124-126.50, which was steady to $2.50 higher from a week ago. NASS will release the October Cattle on Feed report this Friday. Average trade estimates have the September marketing rate at 97%, placements 101% with October 1 feedlot inventory at 99% of a year ago. The placement rate for September would be the largest September placement in 10 years if realized.