Grain futures follow Europe pricing.
Grain futures are following European action with wheat prices higher, while corn and soybeans setback on South American rains that are starting to fall. Light showers of under .40” fell in key areas of central Argentina and far southern Brazil with an active precipitation pattern to linger into the coming weekend. The anticipation is for contumely to of precept of anywhere from 1-4” in Buenos Aries, Córdoba and Santa Fe. Localized heavier amounts are possible in northern Argentina. To the degree which is rain stabilizes soil moisture and crop ratings are uncertain, but what’s important is that if rains will extend into February implying a pattern change. This means the Argentine forecast for late January-early February will be watched and scrutinized to the operational models. The 16-30 day climate guidance this a.m. suggest a return of La Niña-based setup and Argentina beyond next Monday Tuesday. Argentina has lost some 3-4 MMT’s of corn and soy production currently in that number jumps significantly of dryness returns at the beginning of February.
Row crop pricing is shedding previous weather premium added to corn and soybean values on hoped-for expected wet Argentine forecasts. The 11-15 day guidance features the return to complete dryness to Argentina and southern Brazil with some of the weather forecasts in the 16-30 day guidance. It’s the duration of this week’s pattern shift of rain that’s critical. Over the next 90 days, actual South American crop sizes will be measured and their likely moving smaller, not larger. End-users will be buying into this liquidating break with major support seen on March corn from 575-585 and 1325-1335 March beans. Wheat futures look to have worked through an early year cycle price low, and current spread trading of wheat against row crops is helping forge a price low.
Cattle futures end last week on a stronger note with a steady outlook offered for today’s trade. Massive support needs to hold on the April live cattle at 140.00 or risk breaking from sideways trading and implementing a downtrend. Box beef values were all sharply higher last week while the cash trade was generally $1-3 lower for the week. 135-136 is the prominent value of the market has nestled in on, while February live cattle have become comfortable trading that price range. This time year, typically February cattle carry a premium to the cash market.