Markets soften with lack of Turn around-Tuesday effect.
Grain futures soften overnight after the USDA put out their baseline guesses for next year and multiple years forward, with corn next year at 92 Mil acres and soybeans at 87.5 Mil acres, both up from this past season’s plantings. Also, the weather continues to look for improvement in South America, with Argentina having the prospect of picking up 1-2” of rain this coming weekend.
Corn, soybean, and wheat are awaiting Wednesday’s NASS yield adjustments along with carryout changes, with any surprises amid the lack of export demand growth to be absorbed as price negative. Even though the average yield guesses look for corn to be left unchanged, many prominent analysts expect a bump higher in yields. Estimates have the corn carryout climbing 43 Mil Bu with soybeans up 21 Mil Bu while wheat stays unchanged. These adjustments are primarily on export reductions.
This morning’s EU and GFS weather models remain in agreement that soaking rain is probable across the key areas of Argentina November 11-14, with the EU model hinting at follow-up showers and Buenos Aires for November 17-18. Soil moisture will be replenished just ahead of peak soybean seeding, while mild temperatures will limit evaporation ahead of the second corn crop planting in December. The South American overall weather forecast is favorable due to the consistency of outlooks calling for rainfall in Argentina and the return of near-daily showers in Central and Northern Brazil.
Live and feeder cattle opened firm on Monday and posted solid gains, with a steady firm outlook anticipated this morning. Negotiated fed cattle markets are holding off their activity until the latter part of this week, with feedlots looking to add $1-3 to sell prices this week. Box beef values on Monday had choice gaining $0.80 while select was higher by $4.02. The choice select spread narrowed to a $28.63 choice premium. Slaughter margins last week showed a gain of $16/head to $161, which was the most in seven weeks. December live cattle will encounter stiff resistance as it approaches 154-155, as it’ll probably take a firm cash trade to push through these values. Typically, live cattle futures are sluggish in November, with strength from December 7-January 1 a usual outcome.