Grains turn higher overnight on a falling US dollar.

Grain futures were higher overnight, as the US dollar sank in the afternoon session, and this morning, it is below 102.00, off $0.50, as the Federal Reserve noted yesterday that interest rate hikes are done for now. According to Chairman Powell, “it is not likely we will hike further,” and policymakers are discussing when it will be appropriate to cut rates. This is “bullish” for risk assets and commodity markets. The Fed Funds rate was kept unchanged in a range of 5.25% to 5.50% by a unanimous vote.

Saudi Arabia’s grain buyer is looking for up to 715K MT of optional origin wheat in a tender, with offers due by tomorrow. Results are anticipated by Monday, with June being the last time that Saudi Arabia had made a purchase.

Tomorrow, the NOPA Crush Report is at 11:00 am, with analysts expecting a November soybean crush of 185.98 mbu compared to 179.18 mbu in the same month last year. Soyoil stocks are predicted to be 1.138 billion lbs vs 1.099 billion lbs in the prior month. Soybean crush by WASDE is likely 40-50 Mil Bu, which is too low due to record margins, as several new plants come online starting in May 2024.

The Brazilian weather forecast maintains a heat wave with limited rainfall for the next seven days, adding new crop stress. A high-pressure Ridge amplifies across the northern two-thirds of Brazil, which fans widespread 90s to lower 100s in areas that have received less than 1.00” of rainfall this week. Rain chances improve after December 22, but the forecasts are backloaded with moisture. The amount of rain that falls in the last 10 days of December will be highly important for the 24 Brazilian crop production. Presently, with forecasts looking to December 25, rainfall for Northern Brazil looks to be at 40% of normal, while temperatures have been above normal for 1/3 of the month.

After a three-day rally into Tuesday, yesterday, live and feeder cattle checked those gains. Cash markets in the Plains and Midwest were quiet, with a small number reportedly sold in Nebraska at $167, which was $4 lower for the week and at $268, dressed off $3 from last week. Elsewhere in the Plains, cattle are offered at $170 live and dressed and $270. Iowa State University estimated cattle feeding returns in November showed red ink for the first month since January.

Following strong margins of $200-400/head through the summer, estimated returns were at a $45/head loss. The average sale price fell $6 from October to a 6-month low of $179. The largest impact on profitability was the record-hi feeder price of $231/CWT in June, or more than $1700/head. Live cattle February has chart-based resistance at $170-171, while January feeder cattle respected yesterday’s reported resistance at 220-221. Closing above those values helps solidify the freefall decline has ended.