Weather is becoming a concern in S Brazil and Argentina.
Row crop prices pushed higher overnight while the wheat market consolidated yesterday's sharp gains. Risk-on continues across the commodity complex overnight, with the current variant being less invasive than the current Delta virus. Corn and soybeans continue to find new buying interest in South America's developing dry weather.
The growing region of concern remains S Brazil and Argentina. The forecast through December 15 is generally dry, with a high-pressure ridge forming across Argentina this weekend that lingers into mid-December. A light chance of rain is anticipated for Buenos Aires on Saturday with accumulations of .23-1.25″. The soybean crop is not yet in the reproductive stage, and first crop RGDS corn is suffering at the start of its pollination. The growing concern will continue to be South American crop sizes potentially getting cut by the La Niña weather trend if it persists into early 2022. Rains are needed towards the end of December, and long-term models reflect a dry outlook.
Reuters Newswire is again reporting the EPA will be announcing their biofuel mandates for 2020, 2021 and 2022 in the coming days. It's anticipated that legislators will be briefed on their decision, which means it will be rift with leaks ahead of the announcement. A classic congressman always talks to his donors on the side. Due to the reduced fuel consumption during the pandemic, it's highly anticipated that 2020 and 2021 mandates will be cut to lower fees to refineries and distillers while 2022 will be increased slightly. Biofuel incentives in the BBB bill is expected to help biodiesel.
This morning's stats Canada data was negative for spring wheat, bullish durum, positive canola and slightly negative on oats. Estimates for spring wheat was for the spring wheat crop was 21.65 to MMTs. Durum estimates read him 3.6 MMT with the actual number at 2.654 MMT. Canola estimate was 12.8 MMT, the actual number was 12.595 MMT. Finally, oats was guessed at 2.6 MMTs with the actual number at 2.606 MMT.
Again, the cattle trade performed well yesterday with the cash trade in the South $2-3 higher from last week trading at $142. Live cattle North brought $140, which was also considerably higher than last week. Boxed beef traded higher with the cutout gaining a dollar 80, led by a $9 increase in rib value. Weekly beef exports of 48 Mil pounds with the 2nd largest in the last 4 months. Outstanding sales are 120% of last year and record large at 447 Mil pounds, with 5 reporting weeks left. Sales for next year already hundred 3% of last year and are also record large at 84 Mil pounds.