Wheat/corn higher on Odessa, beans lower on rain.
The grain trade opened firmer last night for corn and wheat, while soybeans opened steady and then quickly imploded on afternoon rains for eastern Argentina (in Santa Fe and Entre Rios), producing totals of .5-2.00”. Corn and wheat moved higher on the heavy Russian attacks on the Ukrainian port of Odessa as Putin targets Ukraine’s infrastructure. Rocket fire temporally closed the port of Odessa on the lack of electrical power and some structural damage. Ukrainian spokesmen claimed the port is again operational, but other than a lack of electricity for loaders is operable. Russia claims insufficient grain is heading to the poorest nations in Africa and SE Asia and that the SWIFT operations for the Russian state bank of Rosselkhozbank have not been restored. This is against the deal that allowed the extension of the corridor.
Last week China was seen as an aggressive buyer of soybeans in sizable amounts, but the demand will soon be shifting to South America as Brazilian new crop supplies become available for export in January. US export sales are likely to start declining amid China’s willingness to secure the cheaper Brazilian bean offers and growing concern that demand continues to weaken in China with Covid infection surging and affecting China’s raw material imports/demands.
South American weather continues to show Brazil maintaining near to above-normal rain across most of their regions, with just the southern point of Brazil in RGDS experiencing some below-normal rains. Temperatures continue to hold to below normal levels, with again the only heat focused in southern Brazil in RGDS. Argentina was hot over the weekend but experienced on Sunday a front that produced .5-2.00” of rainfall. The rain in Argentina fell over some of the driest crop areas and was seen as beneficial. Otherwise, a dry Argentine forecast is now offered for the next 10 days with uncertain rain chances in the 11-15 day period. Several stray showers can occur in Argentina, but widespread rains are not for seen into December 22.
Live cattle enjoyed a strong recovery rally on Friday as late-week cash improved to 156. The early outlook for today is steady, but estimated slaughter margins again continue to fall. Reduced holiday slaughter in upcoming weeks on short-week kills may play into the mix. Choice box beef bounced back on the red primal recovery and was up $5.62. Select gained $0.15, but the estimated slaughter margins did turn negative last week for the first time since February 2017 at a $4/head loss. Cattle look to climb a wall of worry into the new year as price seasonals are friendly.