Thinning holiday trade elevating intraday volatility.
The grain trade ended mixed overnight with losses in the early morning hour due to outside market influences, but found a recovery bid on that weakness. Russia continues to launch a barrage of missiles at key Ukrainian infrastructures including Kiev overnight with the attack forcing the Ukrainian government to call for emergency shutdowns of electrical power stations. It’s anticipated that Russia is continuing to target Ukraine’s key infrastructure, with exporters now worried that the three operational export ports along the Black Sea are constantly at risk at the whims of Putin.
Soybean futures had pressed lower overnight on rain showers that did materialize in areas of Western Argentina, but the AM GFS weather model this morning maintained dryness through December 23-26 while the EU model hints of continued chances of rain around Christmas.
China is said to have halted the reporting of new Covid infections even though cases are escalating. Covid infections will likely soar into and following the Chinese lunar New Year Holiday at the opening of February. This continues to push back against world economic growth rates. China is likely ready to wrap up any US soybean buying and will start to move exclusively to South America by mid-January.
The Buenos Aries Grain Bolsa in Argentina estimated that 51% of Argentine soybeans are planted along with 43% of the corn crop. The soybean seeding rate is 14% behind last year with corn also behind by 5%. The euro forecast anticipates rain December 23-26 but that pattern change is not noted in the GFS.
South American forecast continues to show the heart of Brazil’s crop growing areas will maintain normal over/above normal rainfall chances and further improvement in soil moisture for the corn and soybean crops. No extreme heat is foreseen except for the southern portion of Brazil in the RGDS area. Dry weather otherwise persists across Argentina for another seven-days before chances of showers increase. Rainfall totals favor the western and southern portions of Argentina. Temperatures for now are considered seasonal over the next 10 days.
Live cattle gaped lower yesterday and stayed lower on the weak equity market performance and are likely to open mixed this morning with the Dow Jones currently off 350 points on option expiration day that is anticipated to have extreme volatility with such a large number of open options to be expired. Southern plains cattle yesterday did trade $2 higher from last week’s $155, while the dress cattle trade the northern Plains was $1 higher at $248. Additional business is expected to develop throughout the day but a steady to higher cash trend has been set. Extreme volatility the boxed beef market continued with the choice beef got out gaining $4.23 and select $1.82 higher.