Mixed trade to start Friday.
Grain futures initially pushed higher overnight but succumbed to selling in the early morning hours as French Milling wheat retreated from yesterday’s new all-time highs near $300/MT, as Russia raised its floating export tax to $77.10/MT that’s up $7.10 from the last hike in October. Some are thinking it would be as much as $80/MT. However, ultimately, many conclude that that tax may achieve $100 by the end of the year.
Corn futures and bean oil continued their drift from yesterday’s high on talk that the Biden Administration EPA will soon release their 2020-2021-2022 US biofuel mandates soon or before the end of November. Crude oil was down $1.20 this morning, holding just above $80 after again dipping below that in the night session.
The US dollar has firmed to the highest price in 16 months over the past two sessions, trading above 95.00 the US yield curve has dramatically flattened. The 5-year note has lost 20 basis points to 1.26%, the 10-year note fell 4 basis points to 1.42%, while the 30-your bond sank 3 basis points. The US Central Bank is anticipated to raise short-term interest rates sometime in 2022, which will slow the US economy longer term. As a result, the US interest rate curve is flattening, which has caused US dollar to rally on the nearby US rate hike prospect.
After copious amounts of rain, the Eastern Australian forecast has gone dryer which may help their wheat harvest next week. The forecast offers 5-6 days of dry weather which will allow harvest operations to return. South American weather forecasts have near to above normal rainfall patterns holding across the Northern and Central Brazil production areas for the next 2 weeks. There is a risk the northern rainfall will become excessive. The Argentine forecast offers the next chance of rain occurring late Saturday/Sunday with rain totals forecast in the .5-1.50″. 4-6 days of dry weather follows to finish and speed up seating. Temps are in the 80s-low 90s.
Cattle trade yesterday was slightly lower, with feeder cattle pricing recovering. Thursday’s cash markets were quiet after trading to-$3 higher on Wednesday at $131-132. Finishing up this week is expected to see similar pricing with cash bids at multi-year highs. Boxed beef values were mixed on Thursday with the choice cutout down $0.38 and select values gaining $0.68. Boxed beef values are holding at record high prices for November. The seasonal rally has been minimal given the elevated prices that October had experienced into seasonal lows.