Commodity markets await renewed Asian and Chinese buying.

Grain futures had raced higher in the night session, with wheat seeing gains of over $0.10, soybeans higher by $0.15, as they came near to tagging the highs of the week, with corn higher by $.06. However, this faded by the morning hours to a mixed result, as the market awaits renewed Asian buying that’s anticipated after the week-long Lunar New Year holiday that is coming to an end historically grain values improve at the end of the Lunar holiday as SE Asian including Chinese traders return for import demand.

Malaysian Palm oil overnight rallied back to its record high settlement created last week, while crude oil moved to new highs, supporting soybean oil and canola back to the better values of the week. Compared to the December WASDA estimate, which gets updated next week Tuesday, February 9, the potential exists for the Argentine soybean crop to be down 7.5 MMT’s, with Brazilian crop down 16-19 MMT’s and Paraguay down 5-6 MMT’s for a total potential loss of 20.5-32.5 MMT’s. This accounts for 1 Bil Bu of soybeans, a record loss that the world has to come to grips with moving forward with all logistics of record low stocks/use ratios of the world’s major grain exporters. Of course, corrections can and will occur in the grain markets, but the longer-term moving upward trends in pricing remain intact well into the spring.

The classic La Niña pattern stays in place for Brazil, Argentina, Paraguay for the next two weeks with above normal rain slowing harvest in N Brazil while below too much below normal precept deepens the drought across S Brazil and Argentina. There is no evidence of any reversal of the drought through February 20, with models agreeing on below normal rainfall trends holding for solid two weeks. The drying soils will spur higher temperatures expected to move into the 90s/lower 100s. Crop stress is increasing now, which will major affect the second Argentine corn crop during pollination. The weather stays concerning for S Brazil/Argentina.

After making new contract highs in all live cattle contracts and deferred feeders and yesterday’s action, the trade turned more two-sided and closed with a mixed settlement. Box beef trade was generally lower for Thursday, with the choice off $1.69 and select slipping $3.10. Cash markets remain strong, with the Texas Panhandle quoted $3 higher from last week at $140, and sales in Kansas were $3-4 higher at $139-140. Deferred live cattle have continued to outpace corn costs and help support feeder cattle. July corn this week is 14% more than a year ago, while August live cattle up 18%. Live cattle are pressing into a new higher trend but are currently overbought and subject to a classic 2-3 day pricing stall.