CONAB out of Brazil produces low soybean production report.

Grain futures pushed to new contract highs for corn and soybeans on a bullish construed CONAB report out of Brazil, with their numerators lowering the crop size to 125.5 MMT’s. This bolted the bean market at 6 AM to challenge the June 2021 highs at 1623 before experiencing profit-taking after the CPI came out at 7:30 AM hot with the highest inflation print in 40 years. This implies aggressive FED monetary policy at the March meeting. The buzz is now the interest rate hike might be .50% at the March meeting.

CONAB dropped their crop estimate a massive 15 MMT’s from the January number with the crop estimate of 125.5 MMT’s for beans. The corn crop estimate was placed at 112.3 MMT’s, down from 112.9 MMT’s in January. Acute rationing will be required on soybeans as the USDA finally gets up to speed, acknowledging the extremely tight supply that beans will roll into this summer. Historic all-time highs at $18 are likely to be challenged as the US old crop carryout likely heads to 100 Mil Bu on a strong export pace into the spring and summer.

The weather does not improve for Argentina or the southern Brazil regions still producing crops. Extreme heat returns after this weekend to the 90s and lower 100s across next week for the southern Brazil and Argentina region. Both the GFS and European models agreed, which keeps confidence high. Any showers until after the 10 day. All the abundant rains continue to remain in the northern portion of Brazil, with the 10-day forecast of 4.50-8.50” of rain on the crop is trying to be harvested.

Live and feeder cattle futures pushed strong gains yesterday, creating more contract highs on the life cattle side and new contract highs on the May feeder cattle contracts forward. Cattle slaughter at midweek totaled 365,000 head, up 3000 from last week and 20,000 had more than a year ago. The increased production is weighing on box beef prices, with the choice yesterday down $1.67 at $275.79, and the select value slipped $1.79. Cash trade took place yesterday at $140, which was steady firm with last week’s weighted average. April cattle are targeting 151.00-152.00.