Grain prices trend lower Sunday night to start the week.
Grain futures opened soft Sunday evening and stayed that way throughout the night as the US dollar firmed off trendline support that was challenged on Friday and an overall lack of any new supply threats. Soybeans had double-digit losses as Pres. Xi of China was installed into a third term and reiterated his unwavering stance on China’s zero-tolerance covert policy, which threatens growth in gross consumer spending/food consumption.
Expanding rainfall in Central and Northern Brazil, along with stabilizing soil moisture potential in Argentina, was also noted overnight, adding to the pressure on soybeans. Despite excessive rainfall in Australia, the USDA’s attaché raised crop production by 1 MMT to 34 MMTs, still noting the potential for increased feed wheat supplies.
Guidance on the Black Sea export corridor is lacking on whether it will be renewed for another 120 days or a year is lacking. Interior grain movement is hampered and challenged by Russian attacks on electric infrastructure. Putin holds the political cards on how to play this game on the world stage by renewing it or not.
South American weather forecasts are turning more productive for crops and price negative. Forecasts are showing normal/above-normal cumulative precipitation potential for a vast majority of Brazil’s soybean belt. Needed rains are also anticipated to improve Córdoba, Buenos Aires, Santa Fe, and Argentina. South American weather threats are now lacking nearby, with the return of dryness in Argentina and far Southern Brazil being watched in the coming weeks.
Live cattle and feeder cattle were on fire last week to the upside, with strong gains noted from the start of the week into the finish. November feeder cattle marked a new five-week high. The October Cattle on Feed Report had no surprises but did confirm that the October feedlot inventory is now at a three-year low. Box beef prices last week were higher for the week, with the choice cutout gaining $6.73 and select was higher by $1.68. This occurred as slaughter rose to a six-week high at 673,000 head which was the third largest of the year, but the actual kill will likely be 3000-5000 head larger. Despite the increase in production, Packers had improved demand at higher box beef prices seeking supplies.