Harvest is in full gear, with Australian wheat quality at risk.
The overnight grain trade featured selling in the row crops with ongoing heavy harvest, while wheat futures found support on a very wet Eastern Australian forecast for heavy rain as their harvest gets near. Harvest hedge pressure is now at its peak while export demand remains low, and many traders are waiting to see if another announcement of Chinese soybean exports will be released this morning. China still needs soybeans for December procurement, but a January miss on strong Brazilian soybean prospects in January has the US exports too high for US soybeans.
Today is the NOPA September crush report, with members expecting estimates of 161-163 Mil Bu. Soy oil stocks at the end of September are pegged at 1,525 Mil pounds, a 23-month low. Renewable diesel has been adding demand that is drawing on US stocks. This keeps a bid under bean oil prices to ensure that US soy oil is not exported to supply the domestic marketplace fully.
Concerns are growing that the quality of wheat out of Eastern Australia is at risk, with significant downfalls of rain occurring in New South Wales, Victoria, and Queensland. Western Australian wheat is not impacted, but there are 14-16 MMTs in the East that could suffer quality impacts.
Exports out of Ukraine for October 1-17 are at pre-war levels with the shipping pace of two point one MMTs. There are now 60 vessels waiting to take on grain, with the export pace looking to stay rapid well into early November. The UN claims they can keep the corridor open after November 22, with negotiations taking place with Moscow.
A dry weather pattern continues for the Central US, allowing for active harvest, while a cold shot is ending the growing season progressively farther south this week. Frost readings were already into the Central Plains/Delta. Improved rains for the Plains are anticipated in the 10-day forecast, while rain chances are improving in Mato Grosso do Sul of Brazil and portions of Argentina.
Live and feeder cattle futures were steady from Friday to Friday last week, while the negotiated fed cattle trade was higher. S Plains was $1 higher for the week at $145, reaching the highest price since August 2015. Live trade in the N Plains at $147-148. The outlook this week for cash is steady to firm. Box beef values were higher last week, with the choice cutout getting $0.91 and select higher by $0.81. Cash cattle prices are at or near multi-year highs, while pessimism over demand remains a concern of economic issues. Live cattle look to climb a wall of worry as the cash leads the upcoming supply-led-bull market.