CPI data this morning comes in mostly near estimates.
Grain prices softened overnight after yesterday’s poor technical close as liquidation continues in the present risk aversion atmosphere. Open interest fell in yesterday’s liquidation, reflecting an attitude of fewer players participating, decreasing liquidity and creating sharp spikes or dips much more quickly on headlines.
The Black Sea Grain Corridor negotiations ended on Monday in Geneva, Switzerland. The Russians claim the Grain Corridor deal was extended for 60 days to May 17, while Ukraine says the agreement is extended for 120 days. Turkey/UN moderators contend that talks are ongoing and will not commit to either suggested timeline. Russia insists that in the next 60 days, the West must drop or ease economic sanctions adversely impacting their ag trade. With the West presently unlikely to respond to Russia’s demands and the potential worsening of the war into spring, the uncertainty of vessels entering the Black Sea to load Ukraine takes at least 25-40 days round trip. If Moscow wins on the 60-day corridor extension proposed and the West fails to reduce sanctions, it will have an impact on grain vessels wanting to enter the corridor by mid-April.
This morning CPI data came in close to the average guesses and had a minimal impact on market action shortly after the release. The core CPI rose 5.5% year-over-year versus the estimate of 5.5%, with the one month core CPI rising .5% versus the estimate of .4%. February consumer prices increased .4% month over month, which was the estimate as well.
The NOPA will release the February crush numbers on Wednesday at 11 AM. The soybean crush rate is anticipated to come in at 164-165 Mil Bu, with soyoil stocks at 1.9 Bil pounds. Last month’s crush rate was 165 Mil Bu and the soyoil stocks were at 2.606 Bil. Crush margins remain very profitable.
The Argentine forecast calls for a chance of isolated or widely scattered showers later this week into early next week. There is a daily chance of rain somewhere across Argentina with afternoon thunderstorms. Seven-day rainfall accumulations are estimated in a range of point 25-1.50” with locally will heavier amounts, and coverage could be as much as 70% of the crop area. Those rains will help stabilize the crops that are not yet reaching maturity. High temps will hold in the 90s to lower 100s for another 48 hours before declining into the 80s to mid-90s by late week.
Live cattle and feeder cattle traded sharply lower on Monday but recovered near the session's better levels at the close. A steady outlook is anticipated this morning with stability in the stock market. Cash cattle markets are again starting out with limited demand but with tighter supplies estimated for the week, cash is anticipated to be firm. Box beef values were mixed with choice down $.05 cents while select jumped $2.08. Last week it was estimated that the byproducts brought in for packers $118/head and $154 on the beef product for a gross margin of near $272/head. If technical selling escalates, April live cattle has major support in the 161-162 price range.