Turnaround Tuesday kicked in during last night's opening.
Turn-around Tuesday appeared overnight as algorithm computers quickly reversed massive losses that occurred in Monday morning’s grain trade. By mid-morning Monday, Corn had lost nearly $0.30 a bushel, over $0.50 on wheat, and almost $0.70 on soybeans from last Tuesday’s highs. The overnight technical rally had corn and soybeans challenging their gaps, which as of 7:30 this morning, have held. Funds are sitting on a record soybean meal position, and large soybean/corn ownership will continue to be liquidated as production is proven to increase in South America by a record crop in Brazil being harvested and Argentina stabilizing and improving on its later planted crop. Technical rallies that occur are to be sold.
High-ranking US and Mexican officials have met again on the issue of Mexico’s proposed ban on GMO corn which has been delayed to now start in 2025. The countries have been trying to rectify the decree by Pres. Obrador phased out the import of GMO corn last year which was supposed to start in 2024 but has been agreed to be delayed now until 2025. Both countries are still far apart on a solution to rectify the differences.
South American forecast remains wet as Argentina and Southern Brazil have another two storm systems that are anticipated to pass the area before a break from the rain in the 11-15 day period. The best chance of rain is with the slow-moving storm system that starts late Wednesday and occurs into the weekend with totals of .5-2.50” with again a like system due the middle of next week. This is restoring soil moisture across Argentina with a more normal rainfall pattern.
Live cattle trade moved higher on Monday, with a steady/better outlook anticipated this morning. Support was found after Friday’s COF report avoided any negative data while feeder cattle advanced on the weekend feed price outlook. Box beef was softer on Monday, with choice down $0.28 and select losing a dollar 94. The choice/select spread narrowed to a $16.95 choice premium.
The next major report from the USDA is the January Cattle Inventory Report at the end of the month, where a sharp drop in both beef cow and feeder cattle inventories are being estimated. April live cattle last week have proven strong support at uptrend valuations in the 158.50-159.00 price range. Cyclical support comes into play this week which should bring the classic January weakness from the first of the year to an end. Strength should develop after this week in live cattle into February on the charts.