Wheat leads the overnight grain advance.
Grain futures are higher overnight, led by the wheat market, as concerns about the extension of the Black Sea corridor. Russia’s state Duma stated, “it does not consider it expedient to extend the grain deal without more closely monitoring the destination of Ukraine’s grain shipments.” Russia’s primary issue is Europe’s ability to source Ukrainian ag products, as Europe is who intensified the sanctions against Russia, which has yet to see some relief as agreed to in the July settlement.
Overnight Argentina lowered its wheat crop again to 13.7 MMTs, down from 15 MMTs last month and lower than the USDA's 17.5 MMT number. Also, unwanted showers are forecasted to return in the southern and eastern Australian regions next week, complicating harvest. The Aussie wheat harvest begins to intensify by mid-November, with feed wheat supplies now obviously on the increase.
Soybeans remain firm as cash meal markets in South America also support the very profitable US soybean crush margins. The aggressive sales of soybeans in September in Argentina have created a rare pinch for crush in Argentina with elevated values. Also, concerns are returning with Argentine precipitation for early November trimmed back with peak soybean planting season in November.
The EU weather model has limited rain chances in Northeastern Argentine early next week with a lasting period of dryness, but mild temperatures will be maintained. Argentina’s moisture level needs remain low, but peak soybean seeding in November will start to demand rainfall to occur by early December. Second-crop corn seeding begins in December.
Live cattle yesterday worked out a morning correction for the second day in a row, but closed higher, maintaining optimism for strong cash trade again this week. Asking prices in the South are quoted at $151-152, which would be $3-4 higher than last week. The outlook does remain firm for the rest of the week. Box beef values had choice slipping $0.57 yesterday while select gained $1.25. The cull cow market has topped and turned lower, declining more than $22 from the early September high on increased volumes, while fed cattle prices have advanced to multi-year highs in recent weeks. In the near term, live cattle values have become extended, and a period of consolidation will likely take place under $155.00 for the December contract.