No new contract highs overnight.
Grain futures stalled overnight, as technical reversal trading yesterday is finding follow-through selling interest. Export data considered routine in tomorrow’s export sales data on Thursday will also be routine without significant export surprises. Pre-hedging ahead of next Tuesday’s NASS crop production data is becoming prevalent with rising yields for corn and beans. A carryout of 400 Mil Bu is being widely anticipated for soybeans. In addition, increasing domestic crush value has been supporting soybeans.
French milling wheat is lower by $1.00/MT today to $291.75, after rallying early and failing to push through yesterday’s new all-time high of 297/MT. This this light stalling of momentum is bringing in further selling again into the US wheat complex. In the past 2-day corrections have absorbed selling with the 3rd day finding renewed buying. This targets Thursday/Friday as key for new buying or the present wheat rally could be going into a much larger correction.
The Federal Reserve today announces its tapering plan today. Many expect to reduce monthly bond-buying programs by 15 Bil/month, beginning in December and ending next July with the full 120 Bil monthly injections eliminated. An interest rate hike is anticipated next year, with many expecting a ¼% increase every quarter moving forward.
China is reporting outbreaks of Covid-19 cases have grown, with 93 new Covid cases reported in 9 being in the capital of Beijing. Cases are modest compared to the US, but China’s zero-tolerance policy means imposing strict measures to control the spread. This will cause concerns for economic growth.
Dry weather will dominate the Central US and most of Canada into November 11th under a high-pressure Ridge. Near to below normal temperatures will prevail this week with warming into next week. Next week, high temperatures in the 50s/60s will help accelerate the remaining harvest with field preparation for the 2022 crops highlighted. The next chance of rain, the passing cold front on November 11-13th across the North Central US with totals of .25-1.00”. The forecast does lean favorable now for the completion of the 2021 row crop harvest and seeding of the Eastern Midwest SRW wheat.
Cattle futures recovered yesterday, with feeder cattle sharply higher on the reversal in corn pricing and gaining on the strength of 1st and 2nd quarter 2022 live cattle futures. Although cash cattle were untraded Tuesday in the South with limited sales in the north, the midweek cash outlook remains steady to a dollar higher. Boxed beef values were higher, with the choice gaining a dollar 54 to $289.12, and the select value gained $1.97 to $266.36. These are holding at record levels for early November. December cattle need to push through resistance at 132.00 to create a fresh bullish trend that can carry the cash market.