Grains trade mixed overnight.
This morning, Grain prices find wheat in recovery mode while soybeans soften ahead of the impending rainfall anticipated in Brazil through Christmas. After Christmas, the 6-10 day window returns to an abnormal warmth with a below-normal precipitation outlook. Meanwhile, the 11-15 day guidance returns to wet in Brazil, but guidance beyond six days has never been reliable.
Numerous private Brazilian soybean crop estimates have moved lower this week despite rainfall forecasts, with many yield guesses lowered into the 152-155 MMT range. Yield guesses will continue to vacillate well into January.
The US dollar continues to weaken, and this morning, is lower by $0.41 at 101.62, threatening to head towards par, with dollar weakness ultimately beneficial to ag exports. Brazilian corn is at $6.17/Bu, with March corn offered at $6.50. Yesterday’s weakness in corn was tied to the stoppage of rail traffic on the southern border to slow the influx of immigrants. Large Mexican corn purchases from our largest customer are being questioned if the stoppage is not ended soon.
The soybean carry for January/March has narrowed from $0.21/Bu to seven cents over three weeks as the US export lineup expands, which is counter seasonal. This morning, Soybean export sales data showed exports at 1.99 MTs, which was at the top of expectations. There is no indication that the USDA will be trimming its 23/24 US export forecast, leaving ending stocks at 215-220 Mil Bu amid the rising crush.
South American weather had rainfall yesterday, and in Matto Grosso, it was at no greater than .10-.20” despite color on the radars, while the remainder of Brazil and Argentina were dry. High temps were in the 90s to lower 100s, with highs in Mato Grosso do Sul and Eastern Matto Grosso recorded at 101-105°. Today’s EU and GFS models show rain Friday/Saturday, with rainfall of 1-2” to favor the parched areas of Mato Grosso, Goias, and Minas Gerais. A pattern of below-normal precipitation wheat zooms in in Brazil December 26-31. The Brazilian monsoon season is trying to get underway, with soaking rainfall needed into late July to replenish subsoil moisture.
Live and feeder cattle futures bolted sharply higher for a strong close on Wednesday, with a steady, better start offered for this morning. Early week highs look to be retested with yesterday’s trade action. Light cash sales report on Wednesday with higher trends on the early sales. Live sales in IA/MN were quoted at $169-170, which was $1 higher, with dressed sales in Nebraska quoted at $270, up $2. Box beef had choice yesterday $0.30 higher while select was lower by $1.56. February live cattle had found support at our stated 167.50-168.00 price range yesterday and continues the bias higher from Pearl Harbor Day, December 7, into the new year.
This Friday is the monthly Cattle on Feed Report with average trade estimates for November looking for marketings at 93% of last year, placements at 96%, and December 1 feedlot inventory of 102%.