Due to the Monday holiday, the grain trade looks to do a Turn-around Tuesday on Wednesday.

After a firm overnight trade, corn, soybeans, and wheat softened in the morning hours in an almost delayed Turnaround-Tuesday affair on Wednesday. Large index money managers bought commodities yesterday in a risk-on play as equities are overvalued. In contrast, the grain trade is still seen as undervalued given potential inflation risks. US tariffs are either bullish or bearish for individual commodities depending on whether goods are exported or imported.

The US Renewable Fuels Association is pushing to reinstate the $1/gallon blender’s credit for biodiesel and renewable diesel. Similar to the Biden administration, the Trump administration has not clarified tax credit details for 45Z. The US biofuel industry has seen a slowing output due to subsidy uncertainty and worries that 45Z, which was instituted under the Biden Administration, will not be supported. US biodiesel and renewable diesel production show marginal profitability without releasing the GREET model carbon credits. What the industry will push through is an effort by Congress to return the $1/gallon blender’s credit, which is unknown.

It was announced yesterday that Brazil will likely not move to B15 in its diesel blends amid concerns about inflationary food and energy prices. They will hold to B14 in 2025, which could shift 3-4 MMTs of soybeans from being crushed in Brazil to being exported. There seems to be a governmental shift and a weakness in Brazil’s future use of green fuels.

Deliveries for the March grain contracts will occur in six trading days. Recent price strength will build the prospect of deliverable supplies, which could prompt a stall in the recent push of corn through 5.00 and wheat through 6.00. It’s the middle of the week, and price advances typically stalled in the middle of the week, picking up a resurgence of buying on late Thursday into Friday.

Brazil and Argentine weather forecasts look to remain favorable. The northern half of Brazil should have 6-7 days of below-normal rainfall and seasonal temperatures to advance the soybean harvest and seeding of the winter corn crop. Meanwhile, near-normal rainfall returns in the week two forecast, which will be ideal for the just-planted winter corn crop. Warming temperatures and sunshine continue across Argentina for the manager of the week and much of the weekend before showers and thunderstorms return. There is some partial concern that high temperatures will reach back in the 90s to lower 100s, pushing crop maturity. Argentina has been unable to muster any mild temperature readings for more than 2-3 days. Buenos Aires will have rain chances later this week and additional shower chances throughout next week.

Live and feeder cattle futures were higher yesterday, with substantial gains of 2.00-3.00 in the feeder complex. Feeder cattle advanced rapidly as fears of the Mexican border being closed were alleviated after it was found another case of screwworm was found in a cow in Mexico's Tabasco state last week, according to the World Organization for Animal Health. The USDA announced they will not take additional action based on this latest detection because of the comprehensive pre-clearance inspection and treatment protocols that are now in place and will ensure the safe movement of cattle and buys into the United States. The cash feeder index gained $1.69 to $277.99, with the March feeder cattle still showing a $8.00 discount after Tuesday’s gains of almost $4.00.

The negotiated fed cattle markets are quiet, and two weeks of subzero temperatures across the North will have cattle feeders looking for higher prices. The problem is that the negative Packer margins will get in the way. Packers have slashed slaughter rates, and the cumulative 2025 kill is now the lowest since 2016. Beef prices are at record seasonal levels but have lost value from their highs in February amid seasonally slower demand. Packers will continue to cut kills to widen the spread between cattle and beef. Yesterday, April, live cattle held trendline support on the continuation chart. Significant support will arrive in the 190-191 price range if further weakness is noted.