Wheat values spill into correction after $1.00+ advance.
Wheat futures spilled into a correction overnight on de-escalating tensions between Ukraine/Russia. At the same time, soybeans found renewed buying overnight on rumored Chinese buying with their Lunar New Year holiday starting this coming Monday. Asia and China are likely forward buying ahead of their holiday because of the short cash market needs and rising premiums for Brazilian soybean exports.
Today the US Central Bank announces any policy changes it may have towards the fed funds rate and the removing of Quantitative Easing in its battle against inflation. Their announcement is at 1:00 p.m. The outlook of the next 18 months from the Central Bank has produced extreme market volatility in the equities market. This will likely persist with the trade sensitive also to any upcoming geopolitical uncertainty.
Malaysian Palm oil futures rose again overnight 53 ringgits to 5,511 RM/MT, retesting its historical highs. Importers are extending forward purchases, and it supports the price of US Gulf soy oil which is below Malaysian Palm oil. Chinese corn values rose another 9 cents/Bu overnight to $11.14. This is approaching its historic highs on the domestic tightening of feed supplies. Wheat values are correcting their large $1.00/Bu advance over the past seven calendar days, as the Russian/Ukraine uncertainty goes into a stalemate.
A strong cash basis has central Illinois bidding 15-20 over March corn on the declining South American crop estimates. This is underpinning grain futures on setbacks.
South American weather calls for below-normal rainfall now across the entirety of Argentina and southern Brazil for the next two weeks while near to above normal rainfall returns to northern Brazil slowing soybean harvest. This was the weather pattern that was locked in during December, and it looks like it took a brief interlude in the now returning, which is questioning future crop yield potential for Paraguay, southern Brazil, and Argentina throughout February.
Live cattle and feeder cattle futures were lower again yesterday, with April cattle finding support on the close at 140. 00. The cash market remains mostly quiet with some light trade yesterday was seen at 137.00 with asking prices at 138.00. Box beef values marked their first lower day of the year yesterday, with choice cutout easing $1.12 and select was lower by $1.47.