Markets closed on Monday.

Grain futures are mixed after a mostly lower evening session. Corn futures found renewed buying at the 50-day MA on concerns of a sharp fall in South American corn production. Talk continues to grow that the Argentine corn crop will likely end up no larger than 42-44 MMT’s compared to early season estimates of 54 MMT’s. With 10% of the Argentine crop left to plant in mid-January, ratings have plummeted on the remaining 90% due to record heat/drought. 19-22% yield losses appear prominent amongst analysts gauging the crop. When you include Brazil, both the exporters have lost 14-18 MMT’s of corn production, which is a massive 550-700 Mil Bu shortfall that has to come from somewhere other than Ukraine, and that becomes the US this spring/ summer.

We are going into a three-day weekend with the markets closed on
Monday in observance of Martin Luther King Day, and trade reopens Monday evening. What is being closely watched and debated is the South American weather and the potential crop size with the current forecast. Showers and storms are forecasted for central and northern Argentina for the middle of next week, but the southern half of Brazil holds a hot/dry trend. If this weather pattern repeats what occurred in early December 2021, it is just an interlude with the La Niña pattern staying in control of the upper airflow.

Weather models still hold for another 3-4 days of hot and dry weather before showers move across eastern and central Argentine on Tuesday. Rains of 1-3” are anticipated in areas of northern Argentina while southern Brazil remains aired for another 7-9 days before showers look to develop. The uncertainty now is in the 11-15 day forecast, with the GFS offering below normal rainfall for southern Brazil/Argentina while the EU ensemble offers potential for normal rains. The GFS has been more accurate over the last 60-days.

Live and feeder cattle futures were firmer on Thursday, with feeder cattle picking up an extra boost on the week corn market. The negotiated fed cattle markets were at a standstill, with the beef market continuing to climb. Choice cutout gained $2.93 to $282.86 and is $14.30 higher than a week ago. The select rose $1.78 to $272.76. The final slaughter report of the year showed the annual beef cow slaughter at 3.6 million head, up 367,000 head (11%) from last year and the largest since 2011. Relative to the January 1 inventory, the total cow slaughter amounted to 12%, also the most since 2012.