After yesterday’s massive selling across the commodity spectrum, grain futures are recovering this morning after new contract highs scored in corn and soybeans yesterday. Monetary policy by the Federal Reserve took on an earnest look after yesterday’s inflationary CPI, with comments that not only was an interest rate hike in March likely to be .50% but there was also fear an interest rate hike was imminent this Friday or coming Monday. The stock market stabilised overnight as fears subside over an impending interest rate hike, but the market is likely dialling in the potential for a .50% interest rate hike in March.

Brazil’s soybean basis corrected in recent days as $15.50 soybeans are moving supply from the farmer. This morning, there are indications that Brazilian soybean cargoes for April-May shipment are trading $.05-10 above US Gulf origin. However, exporters in Brazil are still struggling to fill existing vessel lineups throughout the remainder of February. Also, Black Sea feed wheat is priced moderately above the corn market, placing some resistance for corn above yesterday’s highs.

This morning the EU and the GFS models have added some regional precipitation of .25-1.00” of rain to areas of Western Cordoba and far northern Buenos Aires in Argentina. There is still no sign of any meaningful or lasting pattern change that develops through February 26. Some 60-70% of Argentina’s corn and soybean belt will see weekly precipitation totals of just 35-55% of normal. Above normal temps return by February 16 with a lasting period of dryness in temperatures above 95° in central and northern Argentina to remain intact. Also, in southern Brazil, Parana and Mato Grosso do Sul need regular soaking rains with the Safrinha corn crop that will become threatened if showers are not happening in early March.

Cattle futures fell with the rest of the commodity world yesterday into the close after making new contract highs early Thursday. The cash cattle trade was steady to higher, with the dressed trade in Nebraska quoted at $224, which was $2 higher than last week. Live sales in the westward $1-2 higher at $141-142. Box beef prices continue to drift, with the choice value down $0.90 for a total loss so far on the week of $6.64, while select beef was $3.10 lower, which was $7.52 lower over the past week. Carcass weights have been slow to decline, and actual slaughter reports show the average steer carcass was up 3 pounds of the week and 8 pounds heavier than last year at 920 pounds. Heifer carcasses were just one pound over last year at 854 pounds. Yesterday’s technical reversal on the charts may inspire technical selling that could drift cattle futures lower on the April contract to rechallenge support at 145.