European wheat values drag US values lower.
Grain futures are lower across the board today as yesterday’s failure to maintain the early-day strength is bringing back trend selling that was prevalent in corn and wheat the prior week. French milling wheat is sharply lower again this morning by $3.50/ton and made a new spot low for the year, dragging US values back with it as Algeria made a large purchase of Russian wheat again, while Ukrainian grain shipments have resumed.
The Federal Reserve is expected to raise interest rates another .5% this afternoon, but it’s all about the forward guidance when Fed chair Powell speaks at 1:30 that will be paid the most attention to. Inflation is cooling a bit, and it’s clear the housing market has scored a lasting peak in mid-2022 while the labor market remains tight.
EU and GFS weather models agree for Argentina that the upper air pattern gets adjusted beyond the next 9-10 days. Cooler temps are forecasted after that, and heavy rainfall will be allowed to slide into fringe producing areas in the western part of Argentina, which we had shown in yesterday afternoon’s video. The core of Argentine’s ag belt stays arid and will see temps in the 90s/low 90s into next week. The heart of Brazil’s soybean belt will continue to enjoy normal to above-normal rainfall and a further improvement in soil moisture ahead during its key growth stages. The La Niña-based warmth and dryness that lingers across the majority of Argentine and southern Brazil is expected to fade into the new year, and long-term weather models should start to see this next week.
Cattle futures were firm on Tuesday with a steady outlook offered this morning, as February live cattle stopped just short of their contract highs. Cash cattle trade should start to occur today or tomorrow, with asking prices in the southern plains quoted $1-2 higher at $157-158. Packer demand is expected to be lighter on the holiday scheduled for next week. 157.22 is the contract high for February cattle, yesterday’s high was 156.77, which will likely create a stalling factor ahead of the Cattle on Feed Report this Friday in the 156.75-157.25 range.