Grains start lower from yesterday's poor technical close.
Grain futures are lower this morning as follow-through selling from yesterday’s retreating close carried into the night session. Before recovering on an Egyptian wheat tender, wheat futures were as much as 7-10 lower overnight. Egypt is tendering for early December and is expected to secure Romanian/Ukrainian supplies. The rising Russian wheat export tax is anticipated by Friday to be $69-70 /MT. Egypt paid $320.51/MT in their last tender for late November delivery. It’s expected they will likely pay over $324/MT.
December corn yesterday hit technical resistance at the 100-Day MA and now awaits today’s ethanol data searching for new buying interest. It’s expected that the US ethanol grind will reach a record 326-330 Mil gallons with just a modest build in US stocks of 850-860 Mil gallons. US soy crush margins are also large at over $2.30/Bu. Margins for ethanol grind and bean crush are very profitable and will limit large break capability and grain pricing in the coming week. Declines can occur, but large price swoons are becoming less consistent with rising bids under the market and the harvest coming to an end.
This morning, a strong storm system is pulling through the Central US, with storms noted across the Eastern US planes. Rain and wind will be pushing east over the next 60 hours with rainfall totals ranging from .3-2.00”. The heaviest totals will drop across the Missouri Valley and northeast into Ohio. This additional rain will further delay harvest and produce new flattening of cornfields. A few days of sunny/cool weather follows before a new storm system targets the South and Eastern Midwest by the middle of next week. Progressively cooler Canadian air will be drawn South at which looks to keep evaporation rates low.
In South America, near to above normal rainfall is offered for all of Brazil, which favors the early seated crops and crop germination. Argentine weather improves in the opening days of November with several potent systems with cooler temperatures.
Cattle futures were sharply higher yesterday, with December cattle gaining $2 and pushing through the 50 and 100-Day MA’s. Initial cash trade did get underway on Tuesday, with sales in the Texas Panhandle quoted at $125, which was a dollar higher from last week. Other regions are reporting limited demand yet, but a firm outlook holds for the rest of the week. Boxed beef cutout values were mixed on Tuesday, with the choice value rising a $1.72 and select down $0.65.