A mixed morning greets the last day of the week.

This morning’s grain trade is mixed, awaiting commodity fund interest as the US dollar has topped. Expectations that the Federal Reserve will start to moderate interest rates slightly sometime in 2024 are accelerating the US dollar's decline from heavy resistance at 104.00. Equity markets are at all-time highs, while commodity markets remain generally subdued in interest from ownership from index funds.

The NOPA Crush Report is out at 11:00 am today. Analysts expect 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. US soy oil prices into renewable diesel refineries are now the cheapest feedstocks and even below the price of using cooking oil, which is offered at around $0.65/pound equivalency.

The US Treasury is soon expected to announce the rule on ethanol in its ability to be a tax credit feedstock in the production of sustainable aviation fuel (SAF). The Treasury is expected to use the GREET model to assess the carbon intensity of SAF feedstocks. The GREET model favors ethanol and veg oils with a lower carbon score enabling each industry to receive the sizable tax benefits that are offered in the 2021 Inflation Reduction Act.

In the northern 2/3s of Brazil yesterday, hot/dry weather prevailed, with temperatures in the mid-90s to lower 100s. Heat stress has farmers reporting that soybean leaves were cupping amid the deepening drought. Forecast models have a high-pressure Ridge holding across N Brazil, which fans heat and below-normal rainfall through December 20. Any meaningful rainfall that arrives next Thursday into the weekend has totals of .25-1.75”. The rainfall is below normal but better than the amount of rain in recent weeks. High temperatures hold in the 90s and lower 100s, with modest cooling during the potential rain event next weekend. The 11-15 day forecast calls for below-normal rainfall into the year-end after the potential Christmas rains.

Live and feeder cattle futures closed higher yesterday, consolidating recent recovery gains. A steady, better opening is anticipated this morning. Cash cattle markets remain untraded, with bids at $168 and offers at $170. Some light trade has occurred at $170 in the after-hours, which may support a better trade today.

The market has fallen substantially in the last two months amid large September-October placements. However, an early seasonal high in placements was reached in September, and placement rates will now fall into the first half of 2024. The supply story of feeder cattle is still in control, with solid demand from consumers for beef into the winter months. Given the continued cow herd slaughter and heifer percentage in the slaughter mix, there is no indication of any herd expansion. February cattle are targeting 170.00-171.00.