Argentine weather remains a concern.
Soybeans and wheat futures were higher overnight, with corn near steady as the trade focuses on the estimates coming out for Friday’s USDA crop report. It’s highly anticipated in the estimates that WASDE will cut corn exports in a range near 100 Mil Bu while soybeans could be cut by less than 20 Mil Bu and wheat near unchanged for ending stocks. The recent fund activity pressing corn much lower on a percentage ratio to soybeans suggests reversing action could occur after the report on any negative data for corn, creating a “sell the rumor, buy the fact” reaction.
China’s October soybean imports have been revealed, and they show their down 14% while why to 7.35 MMTs because of Covid logistics. It’s anticipated that imports will recover to 9 MMTs in December. But overall, the slow import pace by China in recent months has analysts expecting that China’s 22/23 crop year total, which is forecasted at 98 MMTs, may be too high. Some anticipate it could be under 93 MMTs as China’s economic outlook remains poor and crush margins in retreat.
The South American weather forecast remains broadly mixed, with Brazil continuing to enjoy near to above-normal rainfall across the northern and central crop regions with near to slightly below normal levels for Southern Brazil. Temperatures remain near to below average, with heat focused in the southern RGDS in the southern areas of Brazil. Argentina was generally hot yesterday, with temperatures in the middle 90s to lower 100s with no rain. This heat continues through Thursday when chances of showers are noted on Friday. Rain totals across Argentina stay below average, with the 10-day accumulation at point 5-1.50”. The current heat and dryness are a concern for just recently seeded soybeans. Argentine farmers typically wait for rain and seed the second corn crop into mid-January.
Live cattle prices stumble hard on Tuesday, with a softer opening offered for early trade today. Live cattle futures lost another 2 dollars, while feeder cattle saw similar liquidation. Negotiated cash trade and the plains and Western Midwest remain at a standstill, and even though fed supplies are seasonally tight, it’s the falling box beef prices that are putting the squeeze on Packer margins which are in the red. After significant box beef losses on Monday, choice dropped another $.66 yesterday, and select fell $1.97. February live cattle have significant chart-based support at 151.00-153.00. There is a strong seasonal pattern for live cattle to rally from the end of this week into the opening of the new year.