Weather models flip from dryer yesterday noon in Argentina to wetter overnight.
This morning’s grain trade is lower on corn and sharply lower on soybeans and wheat as yesterday’s pre-noon forecast was pulling rain for Argentine this weekend but then put them back in again in the evening and overnight. The 8-15 day window models for the GFS puts Northern Argentina and Southern Brazil in line for some meaningful rain. If realized, Argentine corn and soybean yields will only experience modest losses and be regional. Meanwhile, southern Argentina will continue to look for better rain chances. Current guesses show that the Argentine corn crop stabilizing down 3-4 MMTs from the USDA’s numbers and soybeans down 4 MMTs, as opposed to the conversation that losses were going to grow to 10 MMTs quickly.
Given the significant price advance in soybeans of $0.70 from last Friday into Tuesday and corn picking up $0.20+ in the same time window, farmer selling is expediting. Meanwhile, corn is just showing modest losses from the highs, as domestic carryout is at 10% stocks to use. Interior basis bids for corn are weakening with the farmer selling despite strength on the board.
The release of yesterday’s GREET program shows that the USDA has many scratching their heads. The bookkeeping costs needed to qualify for many of the green programs that offer incentives are being questioned if they will be profitable due to all the steps that need to be taken to qualify.
Live and feeder cattle futures pushed higher yesterday, closing near the better levels of the session. March feeder cattle made a new contract high close (not a new contract high) while the cash feeder Index was still $3 over the January futures at $ 278.
Light cash trade was reported, with dressed trade in the north being $2 higher for the week at $322, while live sales in the South were steady/$3 higher at $201-203. The consumer price data on Wednesday show that the beef price index was down fractionally from November but was 5% higher than a year ago at 434. This marked the 20th consecutive month of year-over-year gains and a record high for the index in December. Retail beef prices continue to set record highs, yet domestic demand remains firm. Cash cattle and beef prices continue to search for a high that will cause consumer demand to slow, helping to offset tight available supplies.