Grain pricing overnight produced a mixed result.
Grain prices are coming in mixed this morning, with soybeans challenging the confluence of the 100-day and 200-day moving averages in the 1318-1320 range. Active bookings of soybean meal with Argentina are now out of the market until April, with US sourcing as the primary interest. US corn and soft red winter wheat are the cheapest on the world market, yet export interest remains tepid. but China is picking up SRW wheat and looking to secure more from the US, with Australia’s drought slashing their potential production. Due to low water levels, logistics continue to be a challenge for the US river system and the Panama Canal.
Brazilian shipping data and anecdotal evidence suggest export terminals are under stress from record shipment volumes of corn, beans, sugar, and coffee. Along with the rainy season, this has caused delays and added costs for exporters. Brazil’s Abiove is predicting the country will process 54 MMT of soybeans for domestic use and export 100 MMT in 2024. Brazil’s government also announced $79M in subsidies to support 23/24 wheat prices.
This weekend, Argentina will be voting on Sunday to elect the next president, with their economy floundering as the inflation rate is at 120% annual rate. The two candidates are looking to dollarize their economy and abandon the peso. The peso currency swap to US dollars carries a sizable risk of creating a deep economic recession or even a depression with Argentina unable to pay off world debts to the IMF. Argentine farmers have now decided to place all new crop grain sales on hold, awaiting the weekend election. Argentina is the world’s third-largest ag exporter, and the markets will closely follow the weekend presidential election. The Argentine president would be installed in January, allowing time for economic policy decisions and implementation.
The extreme heat and dryness that have been pervasive since August have caused Brazilian farmers to halt soybean plantings, with replanting likely to occur once better rain starts to fall. The forecast remains arid for another six days, with an improvement for rain in northern Brazil potentially for October 25-29th. A drier pattern returns after that with a high-pressure Ridge holding aloft. A wetter weather pattern is starting to materialize for Argentina next week, which will benefit summer row crop seedings. Meanwhile, Australia is locked in a rainless continent, with no rain expected through 99% of the landmass through October 29.
Cattle trade was mixed yesterday while feeder futures were lower. A steady outlook is anticipated this morning, with nearby live cattle futures holding firm on hopes of a better cash trade this week. Asking prices are reported at $185 in the South, which is $2 higher for the week, and trade is $2 higher on a dressed basis in the North at $295.
The monthly Cattle on Feed Report is tomorrow at 2 p.m. CT.
Analysts estimate On Feed 99.7% of last year, Placements 100.8%, and Marketings 90.3%. If these numbers are realized, the placement rate will be above a year ago for the first month since June, and the feedlot inventory will be nearly unchanged for the first time in 13 months.