Wheat leads overnight recovery after two sessions of losses.

This morning’s grain trade is steady firm, with wheat leading the recovery after today’s setback, while soybeans pause from yesterday's strong recovery gains. Export sales numbers this morning were considered good, with corn sales near 1.5 MMTs and wheat over 500,000 MTs. Soybeans are also reasonable at over 500,000 MTs, given that we are in the slower export season now. Today is the last trading day for March options, with next Friday first notice day for all March futures contracts. Also on the horizon is that the USDA holds their Annual Outlook Forum next week, where they will make a guess at acreage numbers and multiply that times trendline yields which we have not been able to attain for six years.

French wheat ratings rose 1% in the good/excellent category last week to 74%, while still holding near a 4-year low. The forecast offers drier weather conditions for the next 10 days that will aid Western European winter grain crops. Like most of 24, EU winter grain crops have been fighting against excessive soil moisture and frequent quality days. It’s still early, but sunshine warming temperatures are needed to deepen root development for the 2025 wheat crop.

During an interview with incoming agricultural Sec. Brooke Rollins, stated that she has produced findings of waste inside the USDA with DOGE and has recommended the layoff of 400 USDA staffers. The USDA oversees numerous agencies, so total layoffs are in the thousands. But the staff laid off to work on bird flu was rehired. She stated that all commitments to farmers will still be maintained and that the programs in place will not be cut. She stated there is a lot of hype and negativity towards the cuts, but she says the departments are full of wasteful spending. One update that needs fewer personnel is inspections of beef, which is mostly now done grading with cameras, so staffing can be reduced in that area.

A favorable weather forecast is in store for Argentina and the northern half of Brazil into early March. Meanwhile, heat still persists across Argentina for the next seven days, with highs in the 90s and lower 100s. Rainfall starts on Sunday and should be regular after that. The forecast pushes showers into RGDS in Southern Brazil late next week. A more favorable rain pattern is forecast for the Argentine crop areas as lost soil moisture is replaced. The increasing rainfall across Northern Brazil is favorable during early March, with another 7-9 days to help advance their winter corn seeding pace.

Today is COF day at 2 PM, and trade estimates are looking for the January marketing rate of 102% and placement also at 102%. Meanwhile, the Feb 1 feedlot inventory is at 99.2% of last year's level. This would be the smallest Feb 1 inventory since 2019. Yesterday was another lower day for the cattle trade, with a softer start anticipated this morning. Negotiated fed cattle trade started on Thursday with lower prices reported. Dressed sales in the north were down $5 for the week at $315, while live trade in the South lost $4 and traded at $199. Box beef values had choice dropping $1.26 at $312.63 while select was off $0.58 and $303.18.

Feeder cattle prices were also in sharp retreat despite the cash feeder Index gaining $0.82 to $278.81 with March feeder cattle at 267.00. Estimated slaughter margins are in the red with declining beef prices. The weaker trend in beef prices looks to keep overhead pressure on cattle prices. Meanwhile, feeder cattle prices remain stronger than expected at the sales barn as buyers continue to buy on hope. Liquidation from record open interest by index funds should end soon, with major support arriving underneath the market on any further sharp break. April live cattle have significant support at 189-191 if challenged, while feeder cattle have major support at 259-261 if there to a challenge is found.