Grains soften at the start of Thanksgiving week.
Grain futures started the week lower on Sunday night, with the dollar firmer, equities and energies lower on rising Covid affections in China and more lockdowns. Also, for the second week in a row, better-than-expected rain fell across Argentina, with rain totals ranging from .5-2.50”. The areas of dryness in Argentina are shrinking, with Buenos Aires, Córdoba, and Pampa receiving 2.00-5.00 rain since the start of November.
This Friday is options expiration for the December contracts. December corn has a large volume of puts and calls at 6.50, with the December options against the January soybean contract seeing a large cluster at $14.00. There is a tendency for row crops to rally during the week of Thanksgiving, but it will be a difficult task this year with weak demand and improving weather in South America.
Wheat futures gave up overnight gains as Russian wheat offers sank to $314/MT, down $3.5/MT since the announcement of the ongoing Ukraine Export Corridor. Some private analysts think Russia will export as much as a record 44 MMTs of wheat for this crop season.
South American weather featured additional rain across Argentina’s weekend, helping restore soil moisture, especially for Buenos Aires and Córdoba. Showers and storms are also noted across S and C Brazil, keeping soil moisture favorable. The EU and GFS models show daily rain chances exist across much of Brazil with 10-day rainfall accumulations of 3-6.00”, with only Fars S Brazil holding to near or potentially below normal rainfall patterns. High temperatures range mostly in the 80s to lower 90s with no extreme heat in any forecast.
Friday’s November Cattle on Feed report was supported by the placements number that came in at 94% versus a 96.5% estimated average. A higher start is anticipated for cattle, with feeder cattle seeing an extra boost on the soft tone of feed grains. The cash cattle market was higher by $1-2 in all regions, while box beef values slipped. The choice cutout was down last week $4.07. The Live cattle rally will encounter resistance for the December contract at 154-155.