Mixed start for grain futures last trading day of the month.
Grain futures have inflated this week into the end of the month, with corn reflecting an increase of $0.25, soybeans $0.16, and wheat $0.11. As the end of the month was approaching, fund managers have moved the inflation buy into grains from the energy complex, even as the energy complex retreated this week. As a result, spreads narrowed between ethanol and gasoline. However, continuing this buying could be difficult after the first of the month due to the classic spin the grains do as you flip the calendar. If grains rally into the end of the month, typically, you decline at the beginning of the next month and vice versa.
Next week the focus will be on the November 9 crop report, with private corn and soybean yield estimates starting to be released throughout the week. Technically there is potential for US corn and soybean yield gains, as production increases from September into October typically lead to a lift in yields in November. The potential for yield increase to 52 BPA on soybeans is probable with the lowering of demand due to China’s lack of aggressive buying nature with its window getting narrower to satisfy Phase 1 obligations in the next two months.
Russia set its weekly export tax at $69.90/MT, up $2.90 from last week but less than expected. The Buenos Aries Commodity Exchange raised their estimate for the 2021 Argentine wheat crop to 19.8 MMTs, up from 19.2 MMTs last month, indicating showers felt at the right time to boost wheat yield potential. Wheat futures stalled overnight on this news, with French milling wheat lower for the 2nd day in a row, stalling out US exchange-traded wheat.
Near to above nor rainfall is offered for the Brazilian crop so the next two weeks with seasonal temperatures. Needed rains look to fall across Argentina at the start of next week. The showers are just enough in time to spur seed germination in early crop development. Longer-term Argentine soil moisture shortages are still prevalent, and La Niña is the concern for December-January.
Cattle futures traded lower yesterday, with December tumbling back under the 100-day MA, with any further weakness creating more technical selling. Follow through active cash trade on Wednesday into Thursday was limited on demand. However, boxed beef values did trade higher with the choice up $1.26, and select gained $0.95.