Row crop pricing corrects with wheat much weaker.
Row crop futures were firmer most of the evening but turned lower by morning, dragged lower by the continual weakening wheat market. Malaysian Palm oil moved to new contract highs overnight, up 122 ringgits at 5036 RM/MT, which is a new contract high. This is supporting bean oil and canola. Malaysian Palm oil is higher on the flooding of groves and continual worker shortages due to covert, which makes it a struggle for Pomo production. The Malaysian Palm oil Board will release the final December production/stocks numbers this Monday.
The Argentine weather forecast remains threatening in the next two weeks with limited rainfall and extreme heat. High temps will range from the mid-90s to the lower 100s. RGDS in southern Brazil increasing crop stress. There is no denying that South American crop potential is sharply declining with no evidence of weather pattern change. Any forecasts of rain in the near term are considered light to moderate rain showers across Parana and Santa Caterina, as northern rains drift southward. The 11-15 day forecast stays below, too much below normal rainfall for Argentina and Rio Grande do Sul.
The USDA crop report is January 12, where traders are watching to see how the USDA reacts to South American production and deals with US carryouts because of increased ethanol demand and potential for reducing last year’s crop sizes.
Cattle futures closed sharply lower on Tuesday, with feeder cattle pacing the decline due to the recovery in the corn market strongly above $6.00. Negotiated fed cattle markets were quiet on Tuesday, and given price action in the futures market, it active cash trade will hold until later in the week. Hedged feed yards could easily turn active sellers on steady bids with the opportunity to pick up a strong basis to the board. April cattle has significant chart support at 140.00-141.00 the needs to hold to maintain its upward pricing momentum.