Corn and soybeans rebound overnight.
Corn and soybean futures rebounded overnight along with a lift in crude oil (oil near the highs of the week up $1.50), as short covering interest inspired buying ahead of Thursday’s WASDE crop report. Wheat futures recovered from overnight losses but stayed mixed into the early morning hours.
The Chinese Commerce Department announced they would extend their anti-dumping duties on US DDGs for another five years. The current Chinese DDG tariffs amount to 66%, which prevents its importation. US DDG exports have moved to other countries, but the Chinese decision to lengthen the anti-dumping duties for five years is disappointing for ethanol producers and the corn market.
Taiwan purchased 65,000 MTs of US corn for April origin. Argentine fob corn offers are on par with US Gulf corn, with no Brazilian corn offered. Ukrainian corn offers remain $1.00/Bu below the US Gulf export market. US corn sales typically increase in February-May when South American supplies become minimal, but Ukraine continues to keep its corn export lineup full. The USDA will likely lower exports in Thursday’s balance sheets.
South American weather shows more regular rains starting to occur, with showers having developed across S and W Argentina overnight and have moved into the key central crop areas this morning. Rain totals are ranging anywhere from .3-1.50” on better than expected coverage of 70-75%. This model is one of the passing fronts that was indicated with forecasted totals underestimated. Forecasting models have added rain in the 10-day Argentine forecast, which had been hinted at in the 11-15 day period is getting pulled forward. Models also anticipate that by the end of the 15-day period, near-normal rainfall will start to occur. Better rain is starting to look on tap over the next two weeks in Argentina.
Live and feeder cattle had pushed sharply higher on Tuesday’s trade but slipped into the close for just a firm ending. Negotiated cattle are mostly at a standstill with asking prices of $158-159 which would be $1-2 higher than last week. The outlook remains firm through midweek, with no worse than steady prices are expected to be paid before the week is out. Despite no premiums on the board for the February cattle, the cash market will have to push the market higher, climbing a wall of worry. Futures typically peak in early January and flounder for the month, but will lack of a premium on the board to work with, futures may have a different scenario this year.