KC wheat trades limit up with massive volatility
Grain futures are sharply higher to limit up for wheat prices this morning. Still, they have seen gains completely erased by early morning profit-taking after the French milling wheat market opened, just to recover back to limit higher. Wheat has experienced a $0.75 trading range in the night session, corn $0.40 with soybeans creating a $0.42 trading range. Grain trading is dealing with emotional headlines and investment money flows. There are times when headlines do not trigger a move, but large movements of money is creating reversals.
China is actively booking Brazilian and US soybeans with reports suggesting some 20-24 cargoes were sold. US sales from May into December are being added as forward coverage. Rumors are that China was a buyer of 8-12 cargoes of US corn as trade awaits confirmation. Switching corn purchases in the Black Sea to the US is robust as corn sales were sold as an optional origin. This morning’s export announcements will be closely monitored for signs of business.
South American weather had storms producing rain across N Argentina and S Brazil on Tuesday with rain totals of .25-1.25”. The upcoming forecast maintains a Ridge of high pressure located over Brazil, shunting upper-air humidity into passing short waves across N Argentina/S Brazil every 2-3 days. These systems will produce above-average rainfall of 1.5-4.00” over the next 10 days. Some areas of northern Argentina could see as much as 6.00” of rain over the next 10 days. This will aid soil moisture restoration in some of the drought-laden areas.
Cattle futures were low yesterday with feeder cattle again sharply lower on the escalating feed values. Cash trade was limited with Nebraska reporting dressed basis sales of $224-229. Volume was too light to call for any trend. Box beef values had choice down $0.83 and select lower by $1 .89. The spread is at $5.19 choice premium. Cull cow prices have rallied sharply from the start of the year, gaining $25/CWT from late December. Last week cutters brought $152, narrowing the spread to feeder steers to $75. The spread is still slightly above average but tends to narrow into the summer. April live cattle need to hold $139.00-140.00 to maintain a positive outlook.