Grain prices trade firm overnight.
Grain prices were firmer overnight as corn anticipates another Chinese corn sell announcement, wheat is concerned with Russia standing fast with the 60-day corridor door extension, and BAGE makes cuts to the Argentine corn and soybean crop again. Concerns could evolve with today’s quad-expiration of options and futures for indexes today with weakness that has entered the equities again this morning.
The Buenos Aires Grain Exchange cut their 2023 corn/soybean crop estimates again today, with corn down to 36 MMTs and soybeans at 25 MMTs. From the initial WASDE crop report last fall, their soybean crop is now down 50%, with corn off 34%. Corn losses could continue growing, but soybean losses would have to come from field abandonment.
Despite further cuts in the Argentine crop, Brazilian soybeans continued to decline, and even with recent losses in the US bean market, Brazil’s still is $1.30 under US Gulf values (remember, Brazil's storage capabilities have not matched its growth of total production over the last 15 years. They can only store a touch over 50% of total crops grown). Margin calculations could allow Brazilian soybeans to be imported to the US profitably. There are no hints and words of that occurring yet, but a potential bearish overhang will keep soybeans from recovering substantially and potentially trading at new highs.
Russia continues to stand fast that the Black Sea Grain Corridor deal will only be extended for 60 days, contrary to the 120-day extension pushed by the UN/Ukraine. Russia is likely holding to the 60-day extension due to the coming Turkish presidential election on May 14 and the desire to ensure President Erdogan is reelected as he is sympathetic to Russia’s concerns. The 60-day extension would take the court order to May 17.
Live and feeder cattle futures rose on Thursday after holding technical support for the April contract at trendline value and 100-day moving averages. Active cash cattle trade on Wednesday turned into mostly cleanup action on Thursday, with most of the business complete. This afternoon’s release of the COF report at 2 PM with On Feed at 95.6%, Placed at 93.9% and Marketed at 95.8%.