New historical highs overnight for French Milling wheat.

Grain futures pushed higher again overnight, in what has become typical, weakness in the night session reverses when French milling wheat opens in the night session and then moves higher. French milling wheat made new all-time highs overnight, trading at $297/MT, with the 2008 high having been at $295.50/MT. This continual buying continued with oats pushing to $779.4, a new historical high.

The acceleration in wheat prices has pushed new crop winter wheat prices to near $8, while December 2022 corn is trading at 555. US winter wheat seeding is at 87% completed compared to a 5-year average of 86%. 45% of the US when wheat crop is rated GD/EX, which is poor this early in the season, but there is no correlation to final yields with poor fall ratings.

Wheat values are becoming frothy but could still move higher with the Russian FOB at $335/MT with taxes rising. EU origin FOB offers are above $350, while US HRW wheat is at $359/MT. Australian/Argentine wheat will become available in a month, and pricing competition will move to the more abundant source in the Southern Hemisphere.

Corn prices pressing closer to $6 is awakening soybean meal values which have been the loser on the crush spread. So now there’s protein value being priced to the meal. With soybean oil holding elevated levels, soybeans are finding new appreciating value, even though we lack aggressive Chinese buying. The USDA crop production report is next Tuesday at 11 AM. Production guesses are coming in higher with StoneX yesterday putting beans at 51.9/BPA and corn production of 177.7/BPA, a record, yet overnight price weakness on that was absorbed.

South American weather forecasts have additional rain for Argentine crop areas with overnight totals at .25-1.00”. Recent rains are helping restore soil moisture, with a new system now pushing into Southern Brazil where rain increases in RGDS and Parana. During the next ten days, additional rain chances will help the newly planted crops with temps holding in the 80s to mid-90s in Brazil and 70’s/80’s across Argentina.

Live cattle futures stalled last week at technical resistance and spilled into what is now a three-day correction. A weaker start is anticipated with major support at 127.50 on the December live cattle. Feeder cattle futures have been struggling on the renewed corn strength over the past several weeks. Boxed beef values were higher to start the week, with the choice cutout gaining a $1.86 to$287.58, and the select value rose $1.02 to $264.39. The number of fed cattle making choice grade or higher slipped to a 9-week low of 80.5% last week. At the same time, prime carcasses traded at a record $30.30/cwt premium to choice last week. Demand for high-quality beef is strong.