A mostly mixed grain session to start the week.
Grain futures are mostly lower this morning, after a mixed overnight session. Soybeans are leading the decline with the concerns of Tuesday's November USDA crop report anticipating a yield and carry-out increase. What's interesting is the November data is typically tamed, but due to the fact only 61% of the soybean test plots are harvested in October, this does lead to a potential yield surprise number in soybeans. On the other hand, corn had 91% of its test plots harvested in the October data, which leaves it less volatile.
When USDA data on Tuesday is out of the way, the market refocuses on the strong ethanol and crush margins that remain near record highs. Typically grain prices bounce in price the latter part of November into early December as end-users continue to seek supply, with El Niño's continuing to be a feature in South America to be watched December-January. As a result, price seasonal trends do turn positive after November 20 into early December.
The Moscow Exchange returns to set Russian Floating Export Taxes this Friday. The tax is expected to rise close to $75-84/MT based on recent tenders as the exchange drops prior forward sales from its cancellation. Also, dryness across the Russian winter wheat areas is becoming a concern as winter dormancy approaches, and root systems are poorly established.
Harvest progress was active this past weekend amid dry/mild weather. Central US high temps range from the 50s to the 70s, which help soils drive to support heavy machinery. Forecasts continue to dry through Thursday before showers return late week. Precip totals are forecast in a range of .5-2.00″ across the NW Midwest and Minnesota/Wisconsin being favored with heavier totals. Light snow is forecasted for the N Plains and NW Midwest with accumulations of 1-3″ anticipated. South American weather continues to receive normal rainfall patterns across and C Brazil for the next two weeks. While Argentina is now dry this week with its next chance of rain occurs next weekend. La Niña continues to gain strength in the Pacific waters, which will focus dryness in Argentina in December.
Cattle futures and cash cattle trade were all higher last week, with negotiated cattle trade in the South initially trading $2 higher for the week at hundred $28 and another $2 higher late week trade at $130. Cattle slaughter last week fell 18,000 head from the previous week to 650,000 head. This put the cumulative 2021 slaughter 3% ahead of last year. The increased slaughter in recent weeks, along with already record seasonal prices, has so far diminished a seasonal rally in beef prices. Last week the choice cutout value gained $3.82 to $289.94, and the select value rose $4.15 to $267.52. December cattle are back above the 200-day moving average, with follow-through technical buying likely supporting early week cattle futures trade.