Grain prices improve overnight.
The morning grain trade is higher this morning, led by wheat, as Russia is back enforcing price floors for wheat at $270/MT FOB. Trade is active today, with Algeria looking to buy Russian and EU wheat and Egypt’s GASC back tendering for a November delivery. Australia’s wheat cash offers continue to rise due to concerns over developing El Nino drought. The Aussies are the world’s 3rd largest wheat exporter.
Corn and soybeans are firming from overnight trade as forecast for wet weather across the Midwest will slow harvest but meanwhile, there continue to be ongoing reports of corn yields being variable while most early soybean yields are coming in disappointing.
Brazil’s CONAB estimates that planted corn area will retract by -4.8%, bringing the corn crop down by -17.2 MMT to 119.8 MMT from the USDA’s estimate of 137 MMT. Farmers have chosen not to expand acres due to low domestic prices.
Poland, Slovakia, and Hungary have banned Ukrainian grain from their markets so as not to depress local farm incomes. Ukraine farmers' income is depressed as corn is offered at the European border at just under $3.00/Bu, with farmers in the interior of Ukraine receiving bids no better than $2.20/Bu.
The Australian drought continues to elevate as cash wheat FOB offers have risen to $310-312/MT, which is $8.50/Bu. These offers are the most expensive in the world, which will dramatically impact Aussie wheat export demand from November onward. Australia was the world’s third largest exporter of 32.5 MMTs a year ago, behind Russia and the EU. This year’s exports will drop to 16/18 MMTs of the drought.
The cattle futures market was lower Tuesday with a softer outlook for early trade today. Again, feeder cattle were the weakest element, leading the decline. What has been the norm is after two sessions of losses in a row, typically, cattle would perk right back up again in the opening of the third day. It is important for cattle to renew their strength or LC larger correction made be starting to unfold. Show lists are steady to lower for the week, with asking prices in the South nearly $4 higher for the week at $186. Box beef prices continue to fall seasonally, with choice cutout $with 3.20 lower yesterday and select was off $1.63. Restaurant demand for beef is said to be especially slow now with all traffic.