USDA Crop Report Day.
Grain prices are lower this morning ahead of the October crop production report, with a small declining yield anticipated for corn. Still, a more significant concern is what the USDA does with exports, as sales are far behind the pace needed to achieve the present balance sheet expectations. The data is out at 11:00 a.m. CT. Tomorrow is the day after the crop report, when grain prices typically go down, whether today’s report is positive or negative.
The NASS reported the crop progress data yesterday, Tuesday afternoon, due to the federal government being closed for Columbus Day. Reported soybean harvest progress at 44% completed, ahead of the 41% estimate, with corn 31% harvested behind the 34% estimate. Winter wheat planting is at 55%, in line with expectations, and behind what would typically be 58% planted by now.
Algeria booked 500,000 MTs of optional origin wheat, and pricing suggests that Russia will capture the deal. The world wheat market is struggling to maintain rallies amid the cheapness and availability of Russian wheat despite grain concerns out of Ukraine. Currently, freight and insurance are no higher than in the past several weeks, which keeps Black Sea grain flowing.
A dry weather pattern dominates the Plains and W Midwest to keep the harvest active. A displaced southern branch of the jet stream will produce another round of showers across the far Southern Plains and the Gulf States. Rains will not be enough to improve Mississippi River flows as they occur too far south. Central Plains continues to struggle with drought and emergence, with conditions set to remain poor. A Western Ridge in the US holds into late October, which deepens the drought. Argentina remains dry through October 22.
Live cattle and feeder cattle enjoyed a strong trade on Tuesday while cash markets remained at a standstill. Initial offerings for the week are as much as $2 higher, but Packer interest is limited. Box beef prices did find choice gaining $2.12 while select fell $0.97. The choice/select spread increased to a $33.90 choice premium, a seasonal record high for October. The percentage of fed cattle grading choice has declined in recent weeks, and select has increased, driving the spread to historical heights as the calendar moves into November. Declining fed supplies will reflect the supply-led potential bull market that will have to climb a wall of worry of the US economy.