Soybeans failed to breach 15.00 overnight and hold.
Sunday night grain trade had seen a higher opening, but soybeans stalled at the $15.00 mark with record soybean meal ownership by the funds finding an exodus into the strength. Arid weather forecasts continue for Argentina, but several week fronts do pass through Argentina that presently do not hold much moisture in the models, that can always change. There’s an unwillingness for now it appears by the funds to add to length above $15.00 ahead of Thursday’s USDA crop report.
Deliveries for the January soybean contract had 220 contracts posted by CHS, which Cargill stopped. ADM also issued 32 soybean oil contracts that speculators stopped.
Crude oil pushed higher overnight and is up $2.50/barrel on China’s reopening and a 20% bump in China’s oil import quotas for 2023. Paris wheat futures are down $4.00/ton at $296, causing the morning break in CME wheat values, while Malaysian palm oil gained 66 ringgits to close at 4,118 RM/MT.
The South American weather forecast has models slightly cooler than what Friday produced, with a few rain chances for the northern third of Argentina and Southern Brazil, starting in the middle of this week. Several week fronts will push through Argentina over the next 10 days, but the question is whether any rainfall amounts with coverage will result. The dry trend that has prevailed since October continues, but systems have produced better moisture than models have forecasted. Argentine highs will now range from the 80s to the middle 90s over the next 10 days. The extended range for the 10-15 day period continues to offer better rain chances, as was the case in the past weekend forecast.
Live and feeder cattle futures were lower on Friday, with a steady opening anticipated this morning. Negotiated fed cattle trade was $157 in the South, which was unchanged with the prior week, while IA/MN traded from $158-160, which was steady to $2 higher. Compared to last year at this time, live cattle trade is nearly $20 higher across the region, and dressed sales are $31-32 higher. Box beef values gained last week, with select gaining on choice. The choice cutout was up $101, while select jumped $8.41 for the week. Estimated slaughter margins are now at a 17-week high at $217/head. Live cattle supplies will continue to tighten in the weeks ahead, supporting valuations. The cash trade will lead any further advance for the board, as, unlike prior years, the board has no premium to the cash market.