Outside market influences send grain prices lower overnight

Sunday night, the grain trade opened higher, which was the end of it, as macroeconomic nervousness brought about selling throughout the commodity sector, except for metals pushing higher as the dollar declined. Despite the horrible weather experienced in Argentina over the weekend, the market focused on another US bank failing on Sunday, “Signature Bank,” which is putting market jitters front and center. The trading mentality is “get me out, let me think about it for a while if I want to own anything.” In the meantime, gold and bonds raced higher overnight on a flight to quality.

Overnight San Francisco’s First Republic Bank lost 70% of its pre-market value overnight as investors pushed away from investing in banks amid rising US rates and financial uncertainty. This is the third bank in two business days to have difficulties. This is brought in a new round of selling of the US dollar, with gold being sought as a safe haven along with the valuation of bonds heading higher. It’s now anticipated that the US central bank may not raise rates at next week’s Federal Reserve interest rate meeting amid the liquidity contagion that is impacting regional US banks.

Talks are underway with the UN/Turkey and Russian delegates in Geneva, Switzerland, on extending the Black Sea Corridor. Although no time has been set for a meeting conclusion, the current corridor does expire this coming Saturday.

Argentina suffered heavily over the weekend, with lower 100s occurring each day over the weekend. In the past two weeks, Northern Buenos Aires has reached 100° nine times with limited rainfall. As a result, the corn/soybean crop yields are in freefall, with farmers unlikely to combine fields due to low yields and abandonment. Private Argentine sources discuss a 24-26 MMT soybean crop and a 33-36 MMT corn crop.

Saudi Arabia purchased 1 MMTs of world wheat anticipated to be sourced either from Russia or Europe, with the wheat likely trading at $2 81-283/MT fob for July/August. Again, new price lows for the year.

Cattle futures were lower at the end of last week in a mixed outlook offered this morning, with heavy outside market pressure a concern. Negotiated cattle took place mostly at $165 in the South, which was steady on the week, while tops were $166 paid in the IA/MN region. Dressed sales in Nebraska and IA/MN were quoted $2 higher for the week at $267. Box beef cells had choice down $4 and $285, while select slipped $5 lower at $272. Estimated slaughter margins were at a four-week low of $155 but are still above average, while the byproducts added $162 gross revenue calculations.