Export sales are reported dismal.
Grain futures opened lower last night on the extreme weakness of the stock market after Federal Reserve Chairman Powell gave its communiqué at 1:30 p.m. CT and said that they would fight inflation like a war. This bolted the US dollar to new multi-decade highs of over 111.50, which had commodities and indexes further lower in the evening session. Shortly after the opening, commodities found a bid and moved higher in the evening session as stocks, metals, and energies recovered.
Export sales data out this morning bemoans the current fact of the US dollar strength and slow start of the export season. Wheat, corn, and soybeans all came in below the low guesses, prompting grains to give up night session price improvement, while wheat turned lower.
Argentine farmers continue to sell old crop beans aggressively as their 200-1 peso program ends next week on the 30th. Tonnages are adding up with negative crush margins pushing many of the soybeans to be booked for export by China. This is hampering the October-January export interest, which can show up in future WASDA balance sheets.
The Buenos Aires Grain Exchange dropped its estimate of the 2022 wheat crop to 16.5 MMTs from 17.7 MMTs last month. Also, there 2022/23 corn crop estimate was reduced by 2 MMTs and now 56 MMTs due to the drought, which shifted acres to soybeans. Because of elevating soybean acreage estimates, they raised their bean crop by 1 MMT to 48 MMTs.
A tropical storm is probable across Florida/East Coast from September 30-October 1. The temp forecast is not cooler in the Midwest, but there are no frost threats overall. Still no sign of harvest-delaying rainfall into the first week of October. Warmth returns in the 6-10 day forecast helping the US harvest along. Favorable rain continues to fall in Brazil to promote early soybean seeding.
The cattle trade was lower yesterday, with a soft outlook offered again this morning. Fund liquidation yesterday and weakness in the cash index had feeder cattle futures lower. Cash trade was limited and reported in Nebraska, Iowa, and Minnesota, where cattle sold for $145, which was $1-2 higher than last week. The outlook for the last half of the week remains firm. Cow slaughter it midweek is totaling 382,000 head, up 3000 from last week and 21,000 head more than a year ago. The large production continues to weigh on box beef values, which were sharply lower Wednesday. The choice cutout fell $2.51, and select lost $1.09.
The NASS Cattle on Feed report is out this Friday with On Feed numbers at 100% of year ago, placed at 98.1%, and Marketings at 105.9%.