Wheat rebounds from Monday's heavy losses.
Grain markets overnight found a firm trade in wheat, which was heavily sold yesterday, while corn continued to advance, and soybeans slipped from overnight strength. Yesterday’s crop ratings which are now more of a maturity rating, put soybeans at 55% GD/EX versus 58% a year ago, while corn was pegged at 52% versus 60% last year. This indicates that further yield trimming in October is probable as very little rain has fallen across Central Plains and portions of IA. Also, winter wheat seedings in Texas on Sunday were 33% complete versus 16% on average. Wheat crops in the southern plains will be challenged until soaking rains arrive, and the plains look dry through October 5.
The US dollar is back to near 110.00 as a Federal Reserve meets today and will announce the results of their meeting, an interest rate hike Wednesday at 1:00 p.m. CDT. If rates only rise by the mostly anticipated .75%, then the trade is already now expecting that November will be .75% as well. What is well understood is that the Fed funds rate will be at 4% by the first of the year.
The US weather models are in better agreement for the next 10 days. Conditions look highly conducive to rapid harvesting with abnormal warmth, and near complete dryness will stay in place across the Central US until October 1. The summer-like temps will continue in all areas for another two days before a relatively moderate temperature profile gets established. There are signs of a tropical storm/hurricane making its way to the Eastern Gulf Coast in the 11-15 day period, with low confidence in details. The Plains drought looks to worsen, which is concerning for new crop wheat planting.
Yesterday cattle futures closed higher, with feeder cattle noted holding chart-based trendline support. The cash cattle trade was quiet, which is typical for the start of the week, with packers hoping to capture show lists lower this week following last week’s break in beef prices and margins. Box beef values on Monday had choice up a nickel while select fell $0.76. Last week’s sharp decline in nearby beef prices uncovered good demand, with domestic B cells jumping by 35 Mil pounds and the second-largest of the year at 260 Mil pounds. This was the largest post-Labor Day holiday sales rate since 2013.