Overnight strength gets checked before the end of the morning session.
Grain futures are lower by a penny or two at the end of the night session but had spent most of the night higher. South American weather does offer rain in N Brazil next week, but it’s the damage of the heat this week and the prospects of the return of the ongoing hot, dry pattern after Thanksgiving, which allowed soybeans to push to a new recovery high overnight.
Other news that supported outside markets overnight is China’s President Xi is in the US today to meet with President Biden at the Apex Summit in San Francisco, and the US House overwhelmingly passed a temporary government spending bill that will now head to the Senate for approval.
Lloyd’s of London and Marsh insurance brokers have coordinated a program with Ukraine’s state import-export bank to offer $50M in hull war risk and $50M of protection and indemnity for ships using the alternative Black Sea export route.
The Producer Price Index out at 7:30 AM this morning came in down .5% versus an estimate of .1%, allowing for metals and stock indexes to gain further this morning. Overnight, England’s CPI was lower than expected, and China’s industrial production and retail sales came in better than expected.
NOPA Crush Report at 11:00 am CT, analysts estimate October crush of 188-191 mbu and October soyoil stockpiles of 1.19 billion lbs. A monthly fall in the October soyoil stocks would be exceptionally bullish as new renewable diesel capacity comes online before the end of the year.
Another round of extreme heat was endured in the Northern 2/3s of Brazil, with high temps ranging in the upper 90s to lower 100s. Numerous daily records again were set with highs of 101-110°. In southern Brazil, additional rains of .25-2.00” fell, adding to a weekly total of 2-5.00”. The North and Central Brazilian weather forecast for the next 4-5 days remains hot and dry. After that, the prospect of improved rainfall arrives late Sunday/Monday as the high-pressure Ridge relaxes. The GFS remains the driest forecast with rain accumulations “of .5-2.50” in the 5-10 day window. Meanwhile, the EU model offers 1-4.00”, which is a bit wetter. A blend of the forecast produces a rain possibility of .5-3.00”, which is near the seasonal average if the high precipitation potential is widespread. The high-pressure Ridge returns across N Brazil in the 11-15 window as the entire pattern remains stuck with heat and dryness in the north and too much rain in the South.
Cattle and feeder cattle futures closed higher on Tuesday and is offering a steady outlook for this morning with outside markets firm. The cash feeder Index has followed the CME lower, and the market is waiting to see where the cash fed cattle trade develops this week after cooling yesterday’s midday strength. Negotiated fed cattle are quiet asking prices in the South are quoted at $180-183, which would be steady to $3 higher from last week. Box beef values again softened yesterday with choice off $2.18, while select slipped $1.36. A seasonal rally in the beef market has not occurred yet, as prices still remain at historic levels. The choice ribs value typically leads the market higher in the fourth quarter but has stalled near record-high prices.
The last Cattle on Feed Report held a bearish surprise and has since taken $8 off December cattle. Both funds and commercials are still bullish, technical healing is in the works after five waves lower. Again, this Friday’s report will have an extra day into its competition, which equates to roughly 4.5%. Estimates are On Feed 102.4, Placed 107.9, Marketed 98.3.