Another rotate morning with beans leading while wheat softens.

Overnight strength was mostly tied to soybeans pressing higher on the concerning Brazilian weather, which is now coming into the headlines. Also, risk-on came throughout the commodity complex for energies, metals, and indexes after Fed Chairman Powell yesterday hinted that the Fed may be finished with the most aggressive tightening cycle for decades but did not rule out another hike. Current yield curves imply a 25% probability of another hike in December.

Yesterday afternoon’s September USDA Fats & Oils report had the soybean crush at a record high 5.242 MMT (expected 5.25 MMT) and crude soyoil stocks at 1.602 billion lbs, the lowest in nine years (1.600 billion lbs expected). The Grain Crushing’s Report showed that in September, corn used for ethanol at the highest in five years at 430.1 million bushels.

Commodity market analysts expect Chinese soybean import demand will stay strong in the last quarter, totaling 105 MMT for 2023, which would be up +15% over 2022. This is record large, and it’s also thought that fourth-quarter Chinese corn imports will be near 12 MMTs.

The Brazilian weather forecast has no change in the prevailing pattern of excessive heat and below-normal rainfall in Brazil's north and central areas while continued oppressive rains for Southern Brazil for another two weeks. A Ridge of high pressure holds across N Brazil, producing below-normal rainfall and above-normal temperatures. In Northern Brazil, temperatures will range in the 90s to lower 100s while 70s and 80s across S Brazil/Argentina. Argentina looks to have near to almost above normal rainfall of .5-2.50”. The Argentine drought is now retreating.

Another higher close for live and feeder cattle on Wednesday, with the state a firm outlook anticipated this morning with risk on prevalent after the Fed meeting. Negotiated fed cattle markets were quiet again, with bids and offers still widely dispersed. Cattle in the South are bid at $183, feedlots offered shoulders for sale at $188, and at $294 on a dressed basis in the North. It’s anticipated that this week’s trade will likely be steady to possibly higher.

Yesterday, December live cattle marked the sixth day in a row of higher closes. Putting it at risk of stalling the current rally. The moving average resistance is at $185.00 (50-day exponential MA), which must be closed above to hint that a more aggressive recovery is in place. Otherwise, the potential stall of the reason lift is in the makings