Grain trade softens overnight on Brazilian rains and grain corridor news.
After a firm start overnight in soybeans, the overall grain trade mainly turned lower on the improved moisture prospects that occurred over the weekend for Brazil at the end of this week. It’s becoming a likely scenario that the continuation of the Ukraine export corridor will continue, the only question is will be extended for a year and will more ports be added. Hard wheat pricing continues to advance on a spread basis over soft wheat.
China’s further softening of Covid restrictions over the weekend, along with economic support for real estate developers, failed to generate any excitement overnight in pricing. Also, Chinese Pres. XI did meet with Pres. Biden this morning, and China has been known for being an active buyer of soybeans ahead of key meetings. Soybean purchasing had been active last week, and we will likely see more announcements this week. But we are close to seeing China filling up their needs through December, and they have a large South American crop to pursue after the new year.
Russia is optimistic about the continuation of the corridor. It is insistent that they receive unfettered financial conditions for the exports of their grain/fertilizers with the SWIFT system reinstated for a Russian state bank to operate while being monitored by a Western Multinational Bank to oversee that no arms are being purchased/imported.
Saudi Arabia, through their purchasing arm SAGO was in 41 MMTs of wheat for April-June shipment on an optional origin basis. The CIF price ranged from $374.25-386.50. Eastern Australian weather forecasts are now turning dry ahead of the harvest, which starts to get underway over the next two weeks to help stabilize crop quality. A record crop is in the works, the question is how much quality was affected and the amount of feed wheat that was created.
The EU and GFS weather models are conducive for daily showers across Brazil in the 10-day forecast. At the same time, Argentina has received good rains over the weekend and now turns drier except for showers across Buenos Aires this coming weekend. Temps are normal, ranging from the 80s to the low 90s. Argentina weather will be the focus going into December, when more rain fronts will need to develop.
After Friday’s weakness, live cattle and feeder cattle closed lower on Friday (December cattle still closed with slight gains for the week), with a steady soft outlook anticipated for trade today. Cash cattle did mark small gains last week but not as enthusiastically as expected earlier in the week. Southern plains cattle were $149-150, while the northern plains and IA/MM had cattle quoted at $153-154. Box beef values were mixed with choice cutout down $4.81, and select gained $3.37. Live cattle are notorious for chopping sideways in November when longer-term uptrends are more seasonal after Pearl Harbor Day, December 7, into the new year.