Grains mixed to softer to get trade underway today.
The grain trade will close today at noon, with final settlements at 12:05.
This morning’s grain restart is mixed to softer, with steady-3 cents lower on soybeans and steady-1 lower on corn and wheat. This is based on outside markets that had traded softer during our holiday, but as of this morning, French milling wheat has firmed and is now trading a dollar higher a ton at $223. A weaker tone and the energies with OPEC’s delaying their meeting from this weekend due to lack of cooperation for cuts weigh on biofuels, while the weather for Brazil continues to remain concerning.
In Argentina, CIARA-CEC executives say that a lack of soybeans has temporarily shuttered crushers, and the expected devaluation of the peso under the new President has paralyzed trade. This has also impacted port operations. The Buenos Aires Grain Exchange estimates that corn is 26.2% planted and soybeans 34.8% planted. Some areas of isolated re-planting exist, but soybean conditions are mostly good.
Ukraine needs hard currency and is seeing its legislature moving to increase taxes on grain exports for revenues. The latest twist on new legislation will prevent Ukraine exporters from selling wheat and corn below recent average prices on the international grain exchanges. The Ukraine Grain Association suggests a new legislation would hold Ukraine grain exports. Ukraine is now fighting EU trucker strakes and deepening logistical snags, slowing its grain export volumes.
On Wednesday, a US Appeals Court denied the Biden Administration’s attempt to deny small oil refiners “hardship waivers” granted under current biofuel mandate rules. The EPA’s decision to retroactively deny waivers was not allowed. According to two sources familiar with the matter, the White House is stalling action on requests by Midwestern states to allow regional sales of gasoline blended with higher volumes of ethanol after warnings from the oil industry that such a move could cause supply disruptions and higher prices.
Brazilian weather remains irregular, and last week's euro forecast that had 3-5 inches across Northern Brazil has become a complete bust. Rainfall has been mostly .50-2.0” with coverage that has been no better than 50%. Large areas of N Brazil remain with inadequate moisture, with temperatures now returning to the 90s and lower 100s. Meanwhile, Southern Brazil witnessed widely scattered showers with rainfall totals of .4-2.00” with areas that had seen more locally heavier amounts. Forecast models show that a few additional rain showers will be hit-and-miss in northern Brazil today before the dry weather returns into the last half of next week. High temperatures range in the mid-80s to upper 90s. Scattered showers return across Northern Brazil a week from today with rain totals of .4-2.00”, which will be no better than 50-60% coverage while southern Brazil receives 120-150% of normal rainfall again. A high-pressure Ridge hangs across Northern Brazil, producing below-normal rainfall and above-normal warmth.
Live and feeder cattle futures traded lower on Wednesday, and cash sales have so far been lower. Negotiated fed cattle trade on Wednesday was $1 lower in the South at $177, while dressed sales in the North were $1-2 lower at $280. We could see additional sales develop this morning, with similar price trends expected.
The November cold storage report revealed that at the end of the month November beef stocks rose 6% from September to mark the second consecutive month higher but were still 13% below a year ago to mark the ninth consecutive month of year-over-year declines. October beef stocks were also the tightest since 2014. The November WASDE report estimated that year-end beef stocks would fall 15% from a year ago, which would put cold-stored stocks at the lowest levels in nine years. The seasonal tendency for cattle futures to turn higher is still two weeks away.