Corn – Holding best support of 3 grains, March still at fair value, ethanol expected strong tomorrow
↑ Even though trade was lower in corn the last 2 days, this market is still holding much better support as compared to wheat and beans, traders not as fearful of a demand slowdown
↔March corn is still at fair value which for that contract is estimated at 440
↑ Ethanol expected strong tomorrow, close to last week’s 1105K which was the strongest in 2 months
↔With corn still seeing at least small 8 AM sales and ethanol continuing strong traders don’t have the same demand slowdown concern that they have in beans, corn not affected by rains like the wheat
Beans – Some rains added for ARG, still solid rains BRA, no 8 AM sales yesterday, Jan under fair value
↔Worth mentioning that ARG now has a slightly improved forecast for rains on the 10 day map although SA weather is not where trade’s focus is right now
↓ Trade is concerned, however, with thoughts that exports are slowing and not seeing 8 AM sales yesterday did not help that case, we won’t truly have even a solid guess until Friday’s weekly exports
↑ The 1000 level in Jan offered support yesterday and overnight, with Jan fair value at 1030 – 1040 we should expect general improved support at these levels with 1000 being an obvious buying point
↔It would be more supportive if we saw 8 AM sales to show that importers are buyers at 1000 as well
Wheat – Solid HRW rains still expected to start on day 6, keeping pressure on all US wheat contracts
↓ No major changes to the next rain system expecting 1” – 4” of rain over the Plains and into IA/MN/WI
↔Coverage was slightly reduced but the system as a whole is still likely to be quite beneficial
↔A sign that weather is #1 factor right now is seeing US wheat move lower while overseas is sideways
Cattle – BB back to lower again, trade was optimistic again yesterday pricing in steady cash this week
↔Yesterday’s PM BB was choice +0.06 select -1.92 packer BE at 186.75, packer cushion -$0.67
↓ BB lower again after a 1 day bounce (like we saw last week), packer profits at a dismal sub $0 level
↔Futures quickly ran with optimism after seeing 1 day higher in BB now pricing in cash at a level of steady with last week, with gross packer profits sub $0 a steady cash trade would be surprisingly strong
↔Tyson’s Q3 profits showing a small loss in the beef sector was good to see as it confirms our packer profitability research is accurate and still projects their true breakeven to be somewhere near $7
↔Let’s see if we get first cash bids today but with low packer profits it may wait until tomorrow/Friday