Soybeans press new November highs.
The grain trade is higher to sharply higher today, led mainly by the soybean market, which is following the crude oil market higher on news that Chinese health officials are softening their approach towards the Omicron variant, which is causing fewer deaths and less severe sicknesses than the original Covid outbreaks, avoiding the potential of lengthy lockdowns. This is being done to reduce protests while the Chinese government is still resolving to crack down on hostile political protests.
Deliveries reported on corn and wheat had corn softer on the December contract most of the night until the strength in beans helped pull grains higher. Also anticipated today is news from the EPA/Biden administration that it must produce proposed RVOs by November 30. They were originally due on November 16 by law, but the US biofuel industry agreed to give the EPA until today. On the table is also the prospect that House legislation is being brought forward to extend E-85 gas beyond just summer use and allow for year-round blending. The American Petroleum Institute is starting to support this since they have made a presence in the biofuel industry, with more board members becoming friendly to the idea.
Needed rain is falling across the drier areas of Argentina overnight, with totals so far in a range of .25-1.50”. The best rain is dropping across Buenos Aires, La Pampa, and Córdoba. Rain is falling this morning across Santa Fe, but totals of yet to be reported. This is the third rain event in that totals were greater than originally forecast, which is buying time for newly planted spring crops. In the meantime, heat does return December 5-seven in Argentina with highs in the lower 100s. Brazil continues to enjoy near to above normal rainfall and near to below normal temperatures, with needed rain throughout the main growing areas in Brazil.
On Tuesday, live cattle and feeder cattle were firmer, with a steady outlook offered this morning. Negotiated fed cattle markets remained at a standstill, with Packer buyers looking to secure show lists lower than last week. Box beef values were mixed with choice gaining $0.21 while select was down $2.71. Estimated slaughter margins on the beef last week were down to just $54/head, with the by products adding another $144/head of additional revenue. Gross margins of $198 of the lowest since February 2020.