Grains find Turn-around Tuesday on Wednesday.
Turn-around Tuesday (Monday holiday spills it into Wednesday) is presenting lower prices this morning. They came courtesy of unexpected rain showers breaking out over central Argentina this morning, placing rain amounts of .25-1.25” that wasn’t expected. This softened the corn and soybeans in the night session while wheat drifted on the reality that Egypt’s GASC tender to secure April wheat will go to cheaper Russian offers below $300/MT.
Yesterday’s strength in soybeans occurred on a small area of frost in Córdoba, with the expectation that the forecast would now be dry for 10 days. That’s not proving the case, as pop-up showers are occurring on a regional basis. As a result, Argentine’s crop is being debated from as low as 30 MMTs to as high as 39 MMTs, depending on which source you want to go with. But overall, these showers have continued to occur beyond forecasts since mid-January NVDI satellite measurements have the prospects for the crop estimates to come in in the 37-40 MMT range. This higher estimate would imply that spot soybeans will have difficulty clearing 1550 on a sustaining price basis.
Brazil returns from its Carnival Holiday from Fat Tuesday, while harvest has been ongoing for several days during the event. Hedge pressure should return today as the largest portion of the Brazilian harvest will occur over the next three weeks, with an average of 2 MMTs a day of beans being cut.
Negotiations to extend the Black Sea Corridor are soon underway. Ukraine is asking for a 1-year pact that includes ports such as Mykolaiv, which will boost Ukraine’s monthly grain export capacity to 8 MMTs from the current 6 MMTs. Ukraine is also requesting that the UN/Turkey inspections be sped up, which has been subject to Russian slowdowns. The current pack must be renewed by March 18.
After surprise rain showers overnight in central Argentina, the EU model still is holding for a lengthy period of dry weather. The GFS and Canadian models show chances of showers over the same period. Going with a mixture of the models would imply widely scattered showers through Friday before high-pressure builds and ends rain chances into early next week with temperatures in the 80s to mid-90s. The 10-14 day period holds out rain chances for Argentina, with the solid potential of rain for RGDS in Southern Brazil.
Live and feeder cattle prices pushed higher yesterday, with February continuing to run ahead of the end of month expiration with new contract highs. April closed above $6 5.00, which was a new contract high. Yesterday some limited demand was reported in Nebraska at $161, which was $1 higher than last week, and sales in the IA/MN region came in at $165, gaining $3 over last week. As a result, February cattle indicates $4-5 gains in the cash market this week. Even box beef was sharply higher again yesterday, with choice up $4.31 while select lifted $2.79. The choice/select spread rose to $16.36 choice premium, which is a record high for late February.