Soybeans firm on on South America planting progress.
Corn and soybeans reversed Thursday’s poor closes and pushed higher overnight morning. Crush margins are expanding further on new highs for pricing in spot soybean meal. IMEA’s update for Mato Grosso seeding progress this afternoon’s key and now determining Brazil’s export potential of any in February. Spot futures-based crush margins are up to $2.40/Bu. The historically long duration of crushing margins validates the need for capacity expansion.
President Zelenskiy said that the alternative Black Sea corridor will continue to function despite all threats. Officials report that 51 cargo vessels have entered the new shipping corridor that began operation in August. This softened wheat futures from overnight mild gains. Confirmed physical disruption of supplies needed to spark fear in global markets to push higher, but there are firming Russian cash FOB prices, and strengthening Russian ruble over the past week will slowly help days out wheat values.
Strong El Nino patterns following last year’s strong La Nina are bi-polar extremes. This will likely result in trends of excessive dryness in N Brazil (60-65% of the growing area) and too wet in S Brazil (35-40% of the growing area) over the next 2-3 months. Argentina may receive timely rains, which would help parched subsoil moisture levels. BAGE reported that significant rainfall over last weekend blanketing Argentina’s core growing area has improved the prospects for corn and helped to stop the decline of the wheat crop, which was planted after extreme dryness.
Model disagreements in Brazil are elevated beyond November 5, and confidence in the extended-range forecast is low. The EU model wants to bring in 2-3” of rain in Mato Grosso and center-East Brazil on November 5-7. The GFS and Canadian models keep in place a pattern of heat and much below-normal rainfall throughout the next 10 days. An extreme need for moisture in early November is paramount for the soybean seeding progress.
Live cattle and feeder cattle were mostly lower on Thursday, with a steady outlook anticipated this morning. October live and feeder cattle contracts were higher, and the rest of the market was lower. There appears to be more fund liquidation potential. Late cash trade developed on Thursday at $183-185 in the north, which was $2-4 lower, with sales in the South quoted at $183, which was $2 lower than last week. Box beef prices were also lower but are still holding some weekly gains. The board is still well below cash values, but December cattle are holding above the 200-day moving average. Support for December cattle is major at $176-178.