A small Turn-around Tuesday greets morning trade.

Grain futures are firmer this morning in an anemic recovery rally from yesterday's heavy selling ahead of first notice day on Thursday for the December contracts. Soybeans are performing a bit better as products lead the recovery. Managed money is not heavily short corn (largest since June 2020) and wheat (largest since August 2020) as fresh contract lows issued new sell signals for them. Until first notice day is out of the way on Thursday, it will be difficult for the grain trade to mount a sizable recovery ahead of then. Historically, after deliveries occur, the markets mount a recovery, especially after first of the month lows.

USDA Crop Progress showed corn 96% harvested and winter wheat 50% G/E vs 48% G/E last. This now is the last report for the 2023 growing season and the NASS will not have crop reports again until April. Individual states will update their wheat conditions monthly until then.

Ukraine’s Ag Ministry indicated that farmers have almost finished planting winter crops. Ukraine is increasing shipments from Odesa and is a preferred supplier to many destinations, especially for corn. Russia’s Interfax reported that the Ag Minister is projecting that 23/24 grain exports will exceed 65 MMT. Harvest is 98% complete. Harvest bunker weight terms show 99 MMT of wheat. Russia’s wheat prices were up last week due to bad weather interfering with shipments.

It’s been mostly dry across Brazil on Monday, with any rain confined to the south in Paraguay and the western portions of Parana. Rain totals there range from .25-1.50” with high temperatures from the upper 70s to the mid-90s. Forecast models differ now on rainfall totals across Northern Brazil, with the EU model, of course, being the wettest. The Canadian and US models are drier and, due to their correctness in recent weeks and months, are the preferred ensembles. The trend to below to much-below normal rainfall is forecast for the northern half of Brazil for the next 6-7 days. Forecast models suggest an uptick in rain on December 4 for N Brazil, but the solution is not as wet as prior days. Forecast models keep backloading rain across N Brazil, which is a troubling trend. The EU model has under before during November, with final Mato Grosso rains falling below last year’s dismal accumulation. The GFS 10-day rainfall forecast of 1-1.75” is 30-50% below the December average.

Another sharply lower price day in live cattle and feeder cattle with extended losses on follow-through technical selling from Friday. It’s been a dramatic two-day fall for feeder cattle, losing another $6-7/CWT yesterday. The early week break is setting up another weaker tone for this week’s cash negotiations, while box beef values were softer to start with choice off $0.78 and select lower by $0.96.

The delayed Commitment of Traders report showed that for the week ending November 21, funds were net sellers of 2400 contracts, cutting their net long to 39,000 contracts, the lowest since October 2022. Hedgers bought 609 contracts, reducing the net short to the smallest since last October. Funds also sold 770 feeder cattle contracts and were net short 313 now. February cattle have measured support to $168.00, and if that lets go there is the chart gap at $165.50. January feeder cattle have a gap support area at 207-210 that it seems to be targeting if support is needed. The up-seasonal I have talked about consistently is still 10 days away, when cattle futures have a strong propensity to rally from December 7 into the new year. Obviously, the extreme discounts will make that more easily achievable.