Welcome to Turnaround-Tuesday with a firm morning grain trade.
The grain trade is jumping in Turnaround-Tuesday style after a Friday-Monday break in price. Recovery is in low volume as heat is still manifested in southern Argentina, which awaits meaningful rains, which are always on the horizon in the forecast.
Planting progress for Matto Grosso’s second corn crop is still early, but the pace is the slowest since 2011 and almost identical to 2021. The 2011 and 2021 harvests were the state’s worst-yielding crops in the last twenty years.
This morning, soybean oil prices are higher as Malaysian palm oil futures are higher by 26 ringgits to 4535 ringgits/MT. The strength in soybean oil is despite the industry's growing pessimism that 45Z clean air credits will survive Trump’s legislative and political challenges, which would have caused the return of the $1/gallon blender’s credit by the U.S. Congress this spring/summer. Republican House member Ms. Beth Van Duyne has introduced legislation to repeal the 45Z clean fuel tax credit program.
The EPA has asked the US Supreme Court to pause the briefing schedule of small refiners' hardship lawsuits so it can reflect on the soundness of the denial actions. Pres. Trump’s first term, previously accepted small refinery hardship applications by big oil to exempt their blending compliance.
Some showers were flaring in NW Argentina overnight while the dry southern region continues to await rainfall with temperatures in the 80s to mid-90s. There are chances of some showers in the 24-36 hour window across areas of Argentina before 4-5 days of dry weather returns. Otherwise, the forecasts are optimistic that above-normal rain will occur in week two of the forecasts.
Live cattle and feeder cattle futures burst higher out of the gate on Monday but were hit with heavy profit-taking and hedge-related interest from Friday’s friendly construed Cattle on Feed report. Talks that Mexican feeder cattle may start to be allowed in at a few points of entry before the week out stalled the feeder cattle rally and closed lower. The choice cutout values gained at $were to while select was up $4. Last week, Packers bought 82,583 head on a negotiated basis, with 62,966 for 1-14 day delivery and 19,617 for 15-30 day delivery. The range of prices for dressed steers across all transaction types narrowed to $12 last week, and compared to a year ago, prices were $45-53 higher. Forward contracts sales continue to draw the highest price of $331, followed by negotiated sales that averaged $ 330. Formula sales continue to have the largest volume but were $9 under forward contracts sales at $322. Negotiated grid sales saw the lowest average price of $319.
Yesterday, feeder cattle quickly retreated $6.00 from their highs before finding support, while live cattle tumbled $3.00 from the highs before finding support. Given the fast rise in cattle pricing. 8-$10 breaks are not out of the question on a percentage basis.