Soybean prices make new contract highs again overnight.
Grain futures were sharply higher overnight, led by the soybean market, as losses begin to mount for the South American soybean crop with another dryer than normal stretch of weather for southern Brazil and Argentina on the way. However, wheat futures gave up significant overnight gains after French milling wheat opened at 3:45 AM and the market drifted on the stalemate and lack of any significant concern of military intervention in the Black Sea region between Russia/Ukraine.
Today China goes on a week-long Lunar New Year celebration, celebrating the year of the Tiger. Given that China is very short bought on soybeans, it is anticipated that Chinese buying will materialize later this week as this is typical with prior years. There are rumors that China has a lot of air in their grain bins and that China will be an aggressive buyer of corn and soybeans in the coming months, including the US.
South American weather remains dry now across southern Brazil and Argentina, while regular rains continue to hamper harvest in northern Brazil. In addition, below normal rainfall and building heat will adversely affect Paraguay, Rio Grande do Sul and Paraguay into mid-February. Only light showers are anticipated in this area later this weekend of .2-.85” of rainfall. High temps are in the 80s to the middle 90s.
Live cattle futures ended firmer last week while feeder cattle struggled with rising corn prices. The negotiated fed cattle trade was mostly steady last week, with Texas unchanged at $137 and Kansas primarily steady at $136. Top prices were paid in the Western Midwest, where live cattle sold for $137-139. Box beef values have the choice lower by a $1.99 was select rising $1.08. The choice/select spread was down $3.97 for the week at a $7.01 choice premium. Note that managed money is liquidating market length as the cattle futures are strengthening. April live cattle have held closing support at 140.00 but have significant resistance at 144.50-145.00.