The financial and commodity world recovered overnight from Friday's sharp losses.
Grain futures offered a mostly higher night session, as the new Covid variant is proving to be no worse than the Delta Covid variant. This allowed for a sharp recovery overnight in energies, financials, and metals markets. This buying spilled into the grain complex in the early night session, with wheat and soybeans finding double-digit gains. However, by morning, grain futures found themselves correcting from overnight surging gains, anticipating possible grain sales with Friday’s late surge and overnight recovery prices.
Egypt is tendering for world wheat with a mid-January FOB shipment. They also plan to pay cash, saving a potential $4/MT on the offering. So far, the lowest offer is Romanian wheat at $350.85/MT, while the Russian offer was $351.37/MT.
Australian rains subside this week, allowing harvest to get back underway in the Eastern areas, where new rains are anticipated to redevelop December 7-10th in the far eastern coastal area. South American weather had stormed showers that did move through S Brazil and Argentina on the weekend, but rainfall totals of only .4-1.50’. The Argentine teen rainfall was on the higher side, and high temps were in the 80’s to low 90s. Near to above normal rainfall continues in Northern Brazil with totals of 2.00-4.50” in the forecast. The 10-day rainfall map is starting to reflect a drier trend for S Brazil and Argentina into December 10.
On Friday, a volatile session for cattle with the Covid variant creating a sharply lower opening, yet cattle were backed at contract highs on the close. The cash market has seen a strong surge with the early sales of $3 higher by Wednesday, and Packers then paying $140 across Texas, Kansas and Colorado, which was $7 higher on the week. Cattle in the north sold $5-6 higher at $138-139. Last week sales were the highest prices paid since September 2015. Even though boxed beef prices have weakened, they still reflect a record price for late November. Estimated slaughter margins have declined on study beef and higher cattle pricing but still $360/ahead. Margins are still the 2nd highest on record for late November. Technical fund buying due to the new push to multi-year highs could add additional pricing to the upside. 2022 hedge pricing is advised into this surge.