Wheat leads the overnight weakness.
Grain prices are softer today after yesterday’s crop progress data. Crop Progress showed corn harvest 34% complete (vs 29% LY), and soybean harvest 43% complete (vs 41% LY). Winter wheat planting is 57% (vs 53% LY). Less important now though is the progress showed corn conditions steady at 53% G/E, which may be a limiting factor to changes in the USDA Report tomorrow.
Other areas of the world that are having trouble with low water levels on exports similar to the Mississippi, is the Rhine River water levels have also receded to the point of halting fully loaded vessels and surcharges are being added to freight rates to account for decreased capacity. The Madeira River, the Amazon’s largest tributary, is at its lowest level in 56 years. It is important for transporting fuel from refineries to parts of Mato Grosso.
Tomorrow’s WASDE data does anticipate minor drops in yields from last month, with corn at 173.6 BPA and soybeans at 49.9 BPA. If these yield estimates become reality, adjustments to corn and soybean export estimates that could be lowered again will make the report a non-event for any price strength.
It’s rumored that China booked a few US soybean cargoes off the PNW yesterday, but Chinese demand remains disappointing after returning from their weeklong Golden Holiday. Its lackluster US export demand for corn, soybeans, and wheat that has continued to be the bearish driver in the trade since July. The Brazilian corn and soybean production that occurred has been the bearish albatross on the grain trade.
The northern two-thirds of Brazil continues to hold in a below to much below normal rainfall pattern while daily rainfalls are overbearing from the Río Grande do Sul into Parana. The continual lack of rain across N Brazil with high temps in the 90s to lower 100s is abnormal, and no changes are seen in the models into the end of the month. Argentina will remain dry for the next 10 days, with their extended range forecast now backing out showers that were scheduled in 11-15 window. Also, Australia remains mostly dry other than the far southeast crop areas in New South Whales. 100° temperatures in week two of the forecast.
Cattle futures ended slightly lower on Tuesday while feeder cattle were mixed. A steady outlook is offered for today. Cash cattle markets remained quiet while a small number was reported in the north at $183 live and $288.290 on dressed bases. That is steady with last week, with trade also anticipated later this week at steady. Choice cutout values dropped $2.36 at $301.06 while select slipped $1.35 at $276.15. Compared to a year ago the choice cutout value is still $55 higher, with the rib primal marking the strongest gains at $111/CWT over last year. Seasonal trends stabilize in October, but upward momentum sometimes can delay until after Thanksgiving.