Grain prices do a give back on the week overnight.
Grain futures are lower this morning, with soybeans leading the charge on the prospects of rain for the dry areas of North Central Brazil starting Sunday into the first half of next week. Forecast models remain consistent in offering some improved rain across the northern states, with the EU model always being far wetter than the GFS. The weather premium being pulled back ahead of the badly needed rain should be closely monitored for verification. November rainfall for North Central Brazil was mostly 20-40% of normal.
Yesterday’s big rally in corn and wheat was met with some new deliveries for corn, as was mentioned in yesterday’s video could develop, and those new deliveries came to 221 contracts against December corn, while Chicago wheat deliveries fell to 405 contracts.
Today, Census will release the USDA Fats & Oils / Grain Crushing Report at 2 pm CT. Analysts expect an October soybean crush of 6.03 MMT (199 Mil Bu) compared to 5.242 MMT in September. October soyoil stocks are thought to be 1.540 billion lbs compared to 1.603 billion lbs in the month prior.
French farmers are delayed in getting their wheat crop in ahead of winter. They are only 82% planted, which is up 8% from last week, and many were hoping for a 15% gain. Record falls of rain occurred in October/November, slowing winter seeding progress. Acreage could likely end up being reduced with a smaller harvest for the 2024 harvest.
The South American forecast remained consistent with their solutions; the GFS is the driest of the models, while the European is always the wetter. The details call for isolated showers across N Brazil for the next few days, with accumulations to increase on Monday and continue for the remainder of next week. Rains will range from 1.00-2.00”, which is only 40-60% of normal. High temps will continue in the 90s to even some lower 100s. Southern Brazil, which has been inundated with rain, will have accumulations of 2.50-6.50”, keeping soil saturated which is maintaining spring seeding delays and struggles. Meanwhile, Argentina has normal rainfall forecasts and temperatures that are cooler than normal. The drought in Argentina is shrinking.
Live and feeder cattle futures were hit on the opening yesterday with the classic opening of the third-day rally sale. But the end of session trading found big losses during the day cut in half. Feeder cattle futures have fallen back to the 2023 spring highs when old crop feeders carried a big discount to the fall new crop 2023 feeders. Yesterday’s cash trade was mostly $1 lower on the week at $175. Box beef values were up $2 on choice, and select gained $1 in recovery of recent losses. Technical action on the week is building a case that Monday was the low of the recent heavy liquidation, with seasonals for the cattle futures turning higher from December 7 into the end of the year.