The grain trade starts the week on a softer note.

There is a softer grain trade this morning as the session gets underway for a full week. Despite a weak Brazilian real currency and abundant South American rains, soybeans still remained in a range of 975-1000. Wheat awaits export news to take it out of its doldrums and pricing that is testing the August lows. The Egyptian pound remains perched at record lows, and wheat was sought in a direct deal late last week, but no purchase was made. Egypt’s GASC will be replaced with a new body called MISR to secure wheat and vegetables through direct deals rather than publicized tenders. This adds to the opacity of the wheat market and is likely being done to better align with Russia's desire to avoid tenders. Spot Russian FOB wheat is offered steady at $226-228/MT for Jan-February arrival.

The Russian government has confirmed that the country’s February 15-June 30 wheat export quota will be 11 MMTs, compared to 23 MMTs for the same period a year ago. Stricter controls over Russian wheat shipments are not new to the marketplace, but they do suggest that Russian crop exports will be capped at 44-45 MMTs versus the USDA’s projected 48.

Malaysian palm oil drifted 15 ringgits overnight to $0.517/pound, causing soybean oil to decline. US soybean oil is still the cheapest in the global vegetable oil market.

South American weather is mostly near ideal except for a drier pattern blanketing areas of Argentina over the next 10 days. Soaking showers in Brazil migrate southward into Paraná and RGDS. The length of the coming arid pattern in Argentina will be watched, but excessive heat is absent, and precipitation has been recorded at 60-980% of normal across Argentina over the last 30 days.

Live and feeder cattle closed higher last week, and a steady outlook is offered for the early trade today. December cattle tested long-term resistance at $188-190 as the negotiated fed cattle trade developed higher for the week. This helped lift April cattle above $190. January feeder cattle marked their highest daily and weekly closing since early July, while the cash feeder index rose to a 16-week high of $256 before ending the week $0.22 lower.

Last week’s negotiated fed cattle trade was higher in all regions, with live sales in the north at $190-192 and dressed sales at $295-300. The South's Live sales were also 2-4 higher at $188-190. Box beef values were higher with choice up $3 and select picking up $2. Estimated slaughter margins were lower for the fifth straight week, falling $14/head to an 8-week low of $58 versus $134 a year ago. The December/fab cattle spread offers no incentive to hold cattle into 2025 and could quicken the December marketing rate. Major support for the February contract is now 185.50-186.50.