Soybeans drift from the 200-day MA, but corn holds firm.
This morning, grains are mixed with wheat, finding follow-through buying, with corn firm, while soybeans drift slightly from the 200-day MA. The focus this weekend for soybeans, besides the ongoing Middle East tensions and concerns that a broader area of the Middle East could be brought into the conflict, the soybean trade is watching Argentina’s Sunday presidential election. The effects of economic policy from either candidate will determine if the peso is continued or switched to US dollar trade.
Some navigation along Amazon tributary waters in N Brazil has been halted due to the lowest water levels in 100 years, affecting grain terminals. The government has earmarked $20M in aid for emergency dredging. For September, Chinese customs soybean import data included 6.88 MMT of Brazilian beans and just 133,692 MT of US beans. This is 23% higher than the same month last year for Brazilian beans, while the US decreased from 1.15 MMT. Exports will be shifting to the US.
Reuters reports that the Australian wheat crop was raised by 2 MMTs from rains seen 10 days ago across Southern New Whales and Victoria. However, the remainder of Australia is currently dry and will report record dry weather for September, with limited rain having fallen in October besides the southern areas.
In Brazil, Mato Grosso, Goias, and Bahia farmers report their spring planting has stopped due to dry soils and extreme heat. In some areas, 105-115 degree temperatures will be seen next week for several days. Fields that were planted in September show on even stands and will likely be replanted if rains materialize next week. Brazil’s soy planting is some 5-7% below average this week due to a lack of seeding activity. Rain is hoped for in the October 25-28th window, but a dry forecast returns during November on the long-term models. Brazilian exports are now delayed out of South America until late February, if not early March.
Live and feeder cattle dropped sharply on Thursday, with a softer outlook for this morning. Feeder cattle pace to the client as corn climbed above 5.00, and all contracts from November through May were down over $5.00/CWT, weakness in the feeder cattle from technical selling pulled live cattle lower. Yesterday, negotiated fed cattle trade picked up with higher prices despite the selloff on the futures board. Live sales in the north were quoted $1 higher for the week at $186 and dressed sales rep $2 at $294. Live sales in KS were quoted at $1 higher for the week at $184.
The October Livestock Slaughter report showed the September cattle slaughter was down 10% from both August and last year. There were three fewer working days than in August and one less than a year ago. The per day adjusted slaughter was 5% less than last year. September commercial beef production fell to an eight-year low. December live cattle are targeting the 100-day MA near $184; if that gives way, there is major technical value at $182.