Soybeans challenge 10.00 in overnight strength.

This morning’s grain trade is mixed with soybeans leading a recovery in price after yesterday’s reversal from a bullish NOPA crush report. At the same time, wheat continues to soften in trying to understand Russia’s export tax selling floor. The Nov/Jan bean spread firmed 8 cents over the last week. With spreads being one of the better indicators of how supply matches demand in the pipeline, the recent strength would indicate less available supply than end users want to see. A firming spread can help bring more bushels into the pipeline by pushing commercials to sell instead of hold. Basis has also strengthened in beans, with CIF values bouncing sharply off their lows, something that should not necessarily happen in a year with increased beginning stocks, record yields, and transportation issues. Solid crush margins and growing domestic demand is behind some of the cash strength seen, with yesterday’s NOPA crush figures for September coming in above trader expectations and record high for the month.

Yesterday, NASS reported that 67% of soybeans and 47% of the US corn crops has been harbored through Sunday. Well ahead of all guesses with soybean harvest likely wrapping up this week.

Corn spreads have also firmed, though not to the extent we have seen in beans. It will be interesting to see what the farmer has in mind for the last half of the corn harvest and what kind of influence it could have on cash. Over the last several years, it has made far more sense for the farmer to move whatever harvest bushels need to go early in the season, moving into their bins during the last half. With increased commercial and on-farm storage, it will be interesting to see if spreads and basis continue to firm or if we truly have an overabundance of supply, leading to weaker cash inputs.

Today’s wheat weakness is making it difficult for wheat traders to understand Russia’s FOB market for November, which seems to be between $240/245/MT. It will take a public tender to fully understand Russia’s wheat market intentions and how aggressive the state back sellers will be in holding the $250/MT price. Russia has let up recently on its attacks on Ukrainian port infrastructure and cargo vessels, with several days of quiet. Changes in Russia’s export policies may impact supply availability overall as we move ahead.

The South American forecast maintains favorable conditions with a mixture of rainfall and sunshine to advance spring seeding. Near to above-normal rainfall will fall across Northern Brazil, while needed rain will fall across Argentina before a drier slot of weather develops in the week two forecast.

Live and feeder cattle futures moved sharply lower on Tuesday with a mixed opening expected. Feeder cattle paced the decline despite weaker corn prices, with most feeder cattle contracts off $3.00. Live cattle were lower but followed feeder cattle at a distance amid the outlook for steady cash price this week. The negotiated fed cattle markets have offers in the South quoted at $189-190, but it’s anticipated that hedged feedyards would turn willing sellers on steady bids if they are picking up another $1-2 on their basis with the weaker futures market.

Box beef values were strong, with choice picking up $3.51 and select up $2.99, but load movement was light. This means you can raise the price of beef all you want, but you’ll end up putting it in freezers if nobody buys it. Cattle slaughter on Tuesday totaled 125,000 head, which pushed the early week total to 245,000 which is 11,000 head more than last week. At mid-month, the cumulative slaughter stands at 1.323 Mil head, 79,000 head more than a year ago but still well below the 2018-2022 totals. December cattle have chart support at 183.50-184.00 from the recent congestion resistance now turned support. Feeder cattle have major support at 244.00-244.50.

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