A mixed start this morning with no Turn-around Tuesday yet.
The grain trade is mixed this morning as wheat continues its weak stance into first notice day Wednesday. At the same time, soybeans furthered their advance overnight following the crude oil rally and concerning heat that builds in early December for Argentina. Malaysian palm oil was able to rally overnight 78 ringgits and scored a three-week high, further supporting the recovery in soybean oil.
Due to the recent break in wheat values, Turkey is tendering this morning for an estimated 455,000 MTs of optional origin, which will likely be Russian wheat. Algeria is seeking 50,000 tons likely to be sourced from Russia. Egypt stated its current wheat supplies satisfy five months of domestic use, which is typically a hint that they’ll be in the market soon as they usually buy when they say they don’t need wheat. The recent break in SRW wheat values has extracted enough premium that it’s almost level with French origin wheat for winter delivery.
Another 39,000 cases of Covid were recorded in China on Monday. The recent rise in elderly vaccinations has lifted Asian stock indexes, with the Hong Kong’s Hang Seng index rallying 5% overnight. Unrest over lockdowns continues, but the more critical factor is whether current policies become relaxed due to this. There is no indication that a significant alteration in Chinese protocol lies ahead in the near term, but the market continues to anticipate a potential shift.
US corn values continues to struggle as the Ukrainian corn market is offered $0.10/Bu over the December contract versus spot golf premiums of $1.45-1.60. Brazilian soybeans remain discounted by 50-$0.85/Bu for February-March.
The South American forecast continues consistent with normal to above normal precipitation in Brazil while below normal rainfall and extreme heat arrives in Central and Northern Argentina. La Niña has peaked, but it lingers into the opening part of January. The concern is centered on the lack of subsoil moisture across Argentine crop areas. Ideal weather will continue in Brazil on the 10-day forecast with nonthreatening heat in the 85-92° range. After lite showers arrive in Buenos Aires and Córdoba over the next 24 hours, a noticeable blocking pattern establishes into December 10.
Live and feeder cattle continued lower yesterday, with January feeder cattle closing at its lowest price since mid-November. The Fed cattle trade was quiet, typical of packers trying to defend its narrow margins. Box beef values were mixed with choice cutout gaining $2.70 and select fell $5.84. The choice/select spread has increased to a $26 choice premium.