It's Groundhog Day, and again, soybeans make new contract highs.
Grain futures are higher this morning after a mixed overnight trade. At 5:30 a.m., soybean futures exploded higher through 1540. They moved $0.20 in one minute as continuing weather forecasts show two weeks of hot and dry weather for southern Brazil and Argentina, increasing concerns about collapsing production models.
Yesterday's preliminary open interest totals show soybeans gaining 23,826 contracts, with corn up 12,538 contracts. Soybean oil open interest rose 11,317 contracts and meal up 8,474 contracts. Wheat was up a paltry 557 contracts. This rising open interest reflects the marketplace's new buying as portfolio managers are adding commodities to their inflation-based diversification.
Southern Brazil and Argentine are showing an arid forecast for the next 10-14 days with the prospects of .1-.85″ of rain this weekend, otherwise, rising temperatures are back in the mix. High temps will range in the 90s/100s after February 8, bringing the new concern of continued lowering of Brazilian and Argentine soybean production. In addition, the winter corn crop now is also becoming in jeopardy.
Cattle futures moved sharply higher yesterday, with the April contract creating a new contract high above 146.00 before retreating into the close. Cash markets were untraded, with the initial asking price at 139-140 in the South this week, which would be $2-three higher than last week. The choice beef market fell sharply yesterday, with the choice off $4.96 and select dropping $3.05. The choice/select spread narrow to a $5.22 choice premium. Live cattle have advanced $7.00 in just over a week, consolidation would be anticipated, but trends are turning friendly with first of the year highs recovered to already by early February.