Wheat firms slightly on Ukraine corridor closing.
Grain prices firmed up overnight, but nothing too exciting. According to Kyiv-based consultancy Barva, Ukraine suspended the use of the new Black Sea corridor due to military risks. Pres. Putin ordered the Russian military to patrol the Black Sea, but it was not until recent days that Ukraine could confirm increased warplane surveillance and closed its new corridor. Ukraine grain exports are off 30% this season compared to last year, and with Ukraine Marine transport shuttered for now, Ukrainian grain trade could drop to just 50% of year-ago levels. How long and what parameters Ukraine will use to reopen its corridor is unknown. The Russian military airplane presence is raising the risk of cargo insurers, which will further raise transit costs.
The Russian ag ministry has raised their 2023 All-Grain production estimate to 140 MMTs, including a wheat crop of 93 MMTs. The USDA and Russian production guesses have not correlated regarding their wheat production in recent years. Some suspect that Russia has padded its wheat production estimates due to the war. A 2023 Russian wheat crop of 88-91 MMTs is what some are guessing and would still be the second largest on record and would allow Russia to have 48-50 MMTs of wheat available for export. Currently, WASDE has the Russian wheat crop at 85 MMTs.
Some rainfall has dotted portions of Mato Grosso and Goias overnight, with totals ranging from .10-1.50” and coverage of only 30%. The showers were disappointing in their coverage. The N Brazil forecast after Friday offers near to below normal rain for the next 10 days with the new round of flooding in the southern portion of Brazil with rainfall totals there 3.00-8.50”. The Brazilian weather pattern remains abnormal, with drought looking to worsen in Northern Brazil during November.
Live and feeder cattle futures closed higher on Wednesday, as the heavy fund liquidation ended on Monday. The negotiated fed cattle market still remained mostly quiet even though some sales have occurred lower than last week. Cattle futures are deeply oversold. The December cattle now have large support at the 200-day MA, climbing to nearly $177. Yesterday afternoon’s October Cold Storage report showed that end-of-month September beef stocks rose 6% from August but were 20% below last year. This marks the eighth consecutive month of year-over-year declines and the seventh month of double-digit declines. September stocks of 420 Mil pounds are the lowest for the month since 2014.