Soybeans and corn continue to drift from last week's gains.
Corn and soybean prices are softer this morning, with soybeans leading the larger decline after being the biggest gainer last week. Argentine’s presidential election featured a win for the Peronist party, with their economic minister Sergio Masa capturing 36.6% of the vote and the right-wing Javier Milei receiving 30% of the vote. The surprise strength of the Peronist party now sets off a runoff election on November 19 to decide which economic models the inflation-ridden country will take. Massa’s win will not set off any selling of currently tightly held Argentine cash corn, soybeans, or wheat. The blue peso rate is just above 900 after briefly surging above 1000 per USD late last week. The new Argentine president will be installed on January 1, 2024.
Ukraine is looking to expand the use of the alternative Black Sea corridor, which may be able to export up to 2.5 MMT of food/month. This would nearly offset the idle UN Black Sea corridor deal. Ukraine’s 23/24 exports are behind, estimated to be off -29.7% from the previous year in the same period.
Drought in N Brazil is expected to impact exports, with Amazon River levels at 100-year lows. Mato Grosso farmers have planted 60% of the soybean crop, with substantial replant anticipated if rains can arrive October 26-27. A delayed crop that will be harvested until the end of February/1st of March is in the cards, which extends the US export window. US soybean meal exports are fast approaching a record high, as Argentina is now out of the market exporting meal until next April.
South American weather has El Niño continuing below normal rain across N Brazil and above normal rain for Southern Brazil crop areas. Above-normal temperatures with highs in the 90s/lower 100s will continue to stress N Brazilian crops. Argentine soil moisture forecasts do look to improve into November.
Live and feeder cattle futures closed sharply lower last week with a lower start for this morning’s trade from the monthly COF report released Friday afternoon. Monthly Cattle on Feed Report results were On Feed 100.6% of last year (99.7% expected), Placements 106.1% (100.8% expected), and Marketings 89.4% (90.3% expected). The report was deemed bearish on placements well above the average guess. Higher live cash cattle trade last week could not offset the selling on the board, with major support for December live cattle needing to hold at the 100-day MA at 184.40-184.50. Closing below this value opens up a challenge of 181.50-182.00. Meanwhile, feeder cattle are in search of support and could risk a decline next to $238 and then $234.