The wheat market is trying to retain the early week reversal higher.
The grain trade is firm on the wheat this morning with follow-through from the early week reversing action, while corn is steady, and soybeans went to a new contract low. Export sales this morning were poor, as expected, with soybeans only reported at 55,000 MTs. Corn sales came in at 820,400 MTs, with wheat at 233,500.
The options expire today for the March contracts; on the week, March corn is down $0.10, soybeans are off $0.30, and Chicago wheat is higher by $0.28. Expiration of the options and likely farmers accepting to deliver hedged-to-arrive contracts with the option to just buy the board back to retain ownership will help exhaust some of the recent non-stop selling. First notice day for deliveries is next Thursday, Feb 29.
President Biden yesterday approved year-round E15 blended gasoline sales in IL, IA, MN, MO, NE, OH, SD, and WI starting in 2025. It is not known if the EPA will issue a temporary waiver for sales this summer.
China’s corn prices continue to rise amid a record harvest and record imports. The Dalian/Chicago spot corn spread is $4.60/Bu, the best in years, which has some wondering about additional imports. February/March is the time of year that China typically buys corn from the US. Is it possible China may be showing up soon here in March?
Rain fell overnight across most of Argentina, with totals ranging from normal 2.5-2.00” with coverage of 70%. The rain was timely following 10-12 days of limited moisture. Showers are noted across Central Argentina this morning, which will add to the overnight totals and pull northward. The EU/GFS/Canadian weather models forecast near to below-normal rainfall for northern and central Brazil and near-normal rain for Southern Brazil and Argentina to maintain favorable growing conditions. After this weekend, the forecast is to trend below normal for rain in Northern Central Brazil. The monsoon may be starting to seasonally lose its vitality as extended-range models hint at an early withdrawal of the monsoon in March and April. Northern Brazil rainfall has been adequate for early growth of the winter corn crop, with soil moisture levels in decline, which makes it critical that better rains arrive in the coming weeks. For now, temperatures will remain a few degrees on either side of normal.
Live and feeder cattle closed lower yesterday, with spot April cattle creating an outside-day down trade. Hedging and profit-taking on the recent surge were the likely triggers ahead of today’s COF report. Expectations for this afternoon’s Cattle on Feed report out at 2 PM CT have analysts estimating On Feed 100% of last year, Placements 88%, and Marketings 100%. There is also the cold storage report out at the same time.
Negotiated fed cattle markets are still untraded, with packer bids quoted at $180 in the South, which is steady with last week, and $290 in the North, which would be $2 higher. The asking prices are in the $185 range. Yesterday, the cash feeder index gained $1.83 to $244.49. Thursday’s reversal could lead to further additional technical liquidation into Friday’s close, with initial support on the April live cattle contract near 183.50-184.00.