Soybean prices make new contract highs overnight, lead by bean oil.

Grain futures were higher overnight with soybean oil leaving the soybean market onto new contract highs. Malaysian Palm oil moved to new historic highs overnight as Indonesia restricts exports. The government’s move was to lower the domestic price of palm oil for cooking needs and use more Palm oil to produce biodiesel, and lower their fuel costs. This cripples palm oil exports and raises international veg oil prices. Indonesian exports account for nearly 60% of the world Palm oil trade. This is now occurring when the South American soybean crop is sharply declining, and the US is rolling out renewable diesel this year. This heightens soybean oil's ability domestically to move to higher levels as the man rationing develops from the Palm oil shortage.

Egypt’s wheat buying division GASC is tendering for world wheat, which helped offer a lift in wheat prices overnight. Russia has set its export tax at dollar sign 93.904/MT for the period of February 2-8. Russia starts its wheat export quota on February 15 for no more than 8 MMT’s of wheat offered through June. Yesterday during a joint conference between Pres. Zelensky of Ukraine and Pres. Biden, the Ukrainian Pres., told Biden to “calm down” over the Russian-Ukraine tensions. Ukraine is less concerned about imminent invasion than the US and continues to find a diplomatic solution, meeting with French, German, and Russian diplomatic counterparts.

With heat and dryness returning to Argentina, Paraguay, and southern Brazil, South American weather turns more threatening. Too much rain continues to be favored across northern Brazil and slowing harvest. The forecast remains with below normal rainfall over the next two weeks with extreme heat looking to return to southern Brazil and Argentina after February 4 due to a high-pressure ridge aloft. The GFS and EU weather models agree that below normal rainfall with building heat will adversely impact Rio Grande do Sul, Paraguay, and Argentina into mid-February. Any rain will be pushed southward to La Pampa. Further declining in South American soybean and corn production keeps bullish trends intact on grain pricing into early February.

Yesterday’s cash cattle markets were quiet across the plains with limited trade near steady with values equal to earlier in the week at $136-137. Box beef values were again weaker, with choice cutout drifting $0.35 to $289.11, and select was lower by $0.62 at $279.10. April cattle held closing support at 140.00 this week but is experiencing resistance at the 50-day MA at 142.00.