The US dollar extends its correction.
Follow-through weakness on the US dollar overnight to critical support lifted ags, energies, and metals overnight, with soybeans getting the best of it as rains in the southern portion of Argentina were welcomed. Still, the northern producing areas were left arid and look to stay that week for the rest of the week. December soybean oil made a new rally high overnight to 73.12.
Wheat futures continued to trade unfazed by the news out of Ukraine that indicates an escalation in military activity and elevated risks of the elevated pace in black Sea corn/wheat shipments. Corridor officials are investigating a mine-like object in the Black Sea. The CEO of Nibulon, Ukraine’s largest grain exporter, stated this morning that just one missile attack on protected ports would effectively shuttle vessel movement. The grain trade continues to see the corridor intact until it is not, with no real guidance ahead of the November 22 deadline.
The grain trade has been supported during the first half of the corn and bean harvest by very aggressive restocking of domestic trade with excellent margins. At the same time, weak export demand and interest continue to cap the rallies. Brazilian corn is priced for demand, and Brazilian weather is favorable, with only the northern portion of Argentina finding a concern. The dry areas of Argentina have reduced dramatically. The US is the supplier of beans until mid-January if immediate delivery is needed.
The EU and GFS weather models agree that Argentina will experience regionally heavy showers in the next 24 hours and Santa Fe on Sunday-Monday. Argentina’s northern crop belt is left shortchanged. Rain and sunshine continue to move across Brazil’s primary soybean belt.
Live cattle and feeder cattle futures were corrected yesterday as strategic targets for the spot December contract near 154.00, with hedging interest picking up. After rallying more than $6 in over a week, the cattle market was due to consolidate gains. Negotiated fed cattle markets remained quiet in all major feed areas, with asking prices quarter $3-4 higher than last week at $151-152 in the South. Box beef again showed gains of $3.51 for choice in $1.74 on select. December live cattle have strong support in the 151.00-151.50 range.