Grain futures start Wednesday mixed.
Grain futures find the row crops firmer this morning on drying as a forecast grows concerning SA. In contrast, wheat futures moved lower as Algeria went with optional origin wheat, allowing a break in French milling prices that US values followed. At 1:00 p.m. today, the Federal Reserve will reveal how aggressive the tapering package will be for what has been a multi-year ongoing QE bond-buying program.
Overnight Malaysian palm oil futures dropped 213 ringgits to 4486/MTs on slower export demand and the weakness in competing veg oils. Chinese January corn rose $0.05/Bu to $10.73 while January soymeal fell $2.50/MT to $511.45/MT. The NOPA will release their November crush report today at 11:00 a.m. with a record crush total of 182-183 Mil Bu forecasted. A year ago, members processed 181 Mil Bu of soybeans. US Soyoil supplies at plants are expected to rise to 1.9 Bil pounds.
The Buenos Aires Grain Exchange (BAGE) indicated that Argentina’s biggest problem is the La Niña summer weather pattern deepening in its scope. Furthermore, BAGE indicated that more normal Argentine rains may not return until mid-March. Such a lengthy period of drought would have an acute negative impact on their yield.
Hot/dry S Brazil and Argentine weather forecasts continue to build a drought scenario. Lite precipitation fell across Central Argentina and Southern Brazil on Tuesday with traces to less than half an inch. The coverage was estimated at 50%, while isolated showers dot Northern Brazil. The 10-day rainfall pattern shows a high-pressure Ridge holding across Northern Argentina and Southern Brazil into early 2022. This Ridge creates above normal temperatures with daily highs reaching into the 90s and lower 100s on a frequent basis towards Christmas. With limited rainfall dropping, soil moisture is depleting, allowing temperatures to rise.
Cattle futures ended lower on Tuesday, while cash markets remained at a standstill. The outlook at midweek is for steady lower prices. The boxed beef market continues to unwind, and packers are thought to have booked good numbers for the late-year slaughter. On Tuesday, feedlot offers in the Southern Plains were quoted at $140-142. The choice boxed beef value broke $2.50 yesterday while the select dropped $4.84. Seasonally the beef market tends to forge a low late in the year and then steadily gain into the first half of the following year. The choice cutout is now $87 under the late August high. Support is anticipated $20 under the current market at $240-245, where seasonal lows could be forged.