A mixed trade to start this week's activity.

This morning’s grain trade is mixed with soybeans lower, led by a retreat in Malaysian Palm oil pricing, with wheat firmer as tensions rise in the Black Sea region with Russia launching attacks into Ukraine with its largest drone and missile attacks on their electrical grid. 120 missiles and 90 drones were utilized. This could be a response to Biden authorizing the use of long-range missiles to deepen the side of Russia.

The increase in Black Sea war tensions supports wheat values, with corn trying to follow but held back by soybeans. Wheat is the primary grain exported from the Black Sea, which dominates the trade position into the Middle East and Africa. Russian FOB wheat prices are bottoming as January forward export programs look to be diminished by the record pace of sales that have been shipped to date. Their new crop struggles due to low moisture before winter's onset.

It’s anticipated that Russia will announce its initial winter wheat crop condition ratings later this month, and the poor establishment will likely reflect a large portion of the crop in the fair/poor category. This should help to support wheat, meanwhile the ongoing harvest in Argentina and Australia on their wheat harvest looks to any strong rally. Russian December FOB wheat is steady at $226/MT, while December Paris wheat is gaining this morning at 218/MT.

Malaysian palm oil retreated sharply this morning, down 161 ringgits/MT to 4,927 RM/MT, on the price weakness of Dalian palm oil. Rumors are circulating that Indonesia could slowly phase in its B40 palm oil blend program over the next 3-6 months as fossil fuel diesel prices decline.

Weather South America, over the next 8-10 weeks, will begin to focus on the soybean reproductive period, which takes place in December and into early January. The weather forecast for the 2-week window currently lacks any threats with reasonable rain forecasts and temperatures. Brazil’s soybean seeding is estimated at 8% complete compared to 68% last year.

Last week's trade for live cattle and feeder cattle was mixed. The nearby December and February cattle closed softer, while deferred contracts were higher. Strength in deferred live cattle and weaker corn values supported a higher weekly move for feeder cattle, leaving November with its highest weekly close since mid-July. The cash feeder Index gained $2.45 for the week and finished at a 15-week high. A steady outlook is anticipated for this morning’s opening trade.

Negotiated fed cattle trade moved lower in all regions last week, with live sales in the north $1-2 lower at $184-185. Dressed sales were mostly $$3 lower at $290. Live trade in the South was off $2 for the week at $185, with live prices down $5 in two weeks but still $7 higher than a year ago. Cattle slaughter last week was off 13,000 head at 600-6000, and 33,000 head fewer than a year ago. Carcass weights averaged 30 pounds heavier than a year ago at 869 pounds, and beef production was down just one .8% from last year. Choice beef prices tumbled $5 last week and are off $20 from the October high. Cash prices have declined for three weeks but are still well above last year. Weakening beef prices are weighing on the cash cattle trade. Still, deferred live cattle futures are adding premium as fed cattle supplies look to decline again in 2025, and there is optimism in a new administration that keeps the economy rolling.