Mixed trade to start the week.
Grain futures traded a mixed overnight session, with optimism towards today’s Summit between Pres. Biden and China’s Pres. Xi is being dialed back as the White House states that Ag trade with tariffs, trade war, and supply chain challenges are not on the agenda. Today’s schedule does have the NOPA release of the October member crush today at 11 AM. Estimates are for 184 million Bu crush in October, with Soyoil supplies rising to 1.70 Bil Lbs.
Over the weekend, China defined the pathway forward to approved GM seeds and its commercialization of corn. The new GM process could produce a seed market launch within a year, impacting their 2023 corn crop. The move will not affect 2022, but the government does want to move ahead with new traits and varieties to boost domestic crop production.
Wheat futures traded higher overnight but struggled in the early morning hours as French milling wheat corrected from last week’s run, down $3/MT at 294 MMTs. Wheat futures are struggling to follow through with Friday’s late burst, which prompted a quick correction into Friday’s close. The current price rises in corn, beans, and wheat have seen a three-day burst with fund buying that typically abates by day 4 or 5. You have to feed a bull every day, and the news seems limited at elevated price levels today.
In South America, rains fell in Argentina over the weekend, with a cold frontal passing Saturday. Rainfall totals range from .5-2.00” on coverage of 85%. The rains are helping soil moisture restoration. Showers also persisted across North and Central Brazil with rains of .25-1.75. Dry weather continues across much of Southern Brazil, including Parana. Dryness is noted returning to Southern Brazil and Argentina in the 10-day forecast.
Cattle futures held a tight trading range last week while cash cattle jumped $2-3 with pricing at $131-132. Dressed cattle in the north were up $4 for the week at $207. His live sales were the highest for both northern and southern cattle since June 2017. Boxed beef values were mixed with choice down $5.24 for the week at $284.30, led by a $21 drop in the rib value. The select finished the week $2.01 higher at $269.53. The seasonal beef outlook typically turns lower now into the end of the year, however, there is still the wide disconnect between boxed beef and cattle prices.