Further weakness in the grain trade overnight. Will Turnaround-Tuesday arrive?

The grain trade is softer this morning, led by wheat after Monday evening's firm trade. Weakness entered the grain trade as European selling arrived after 1:30 when their market started to open. Soybeans again challenged the 100-day MA and the mid-February low near 1041.2, in the night session was held so far. Outside market influences are negative, with metals and energies being softer. This Friday is first notice day for all March contracts, with longs that do not want to receive potential delivery needing to be out by Thursday’s close.

The Russian ruble is up another 1.5% this morning on optimism surrounding an end to the war in Ukraine. Russian exporter margins will improve slightly amid a falling export tax, with strength in the ruble since February 1 has thinned exporter profitability considerably. Russia is not expected to dominate the spring wheat trade, which differs significantly from the last two years. Additionally, Moroccan wheat production estimates are also in retreat. The EU’s crop monitoring body this week cut 2025 and African wheat production to 5.9 MMT percent versus 6.1% last year and the lowest since 2008/09.

Canadian canola collapsed on Monday, supporting soy oil this morning, further suggesting that money flow is centered on US tariffs and retaliation. Length in corn and soybean markets is being unwound, with wheat following.

South American forecasts for Argentina into March 1 are seeing a reduction in rainfall in Córdoba, Santa Fe, and Buenos Aires. Rainfall is still on the way but was reduced to 2-6″, which reduces flooding potential. After the heat, this rain is welcomed, but a drier pattern will soon be needed after March 1 so their corn planting can get underway, which typically occurs after the first half of March. Brazil typically gets its corn planted in late January through February.

It was a strong trading day in cattle futures on Monday after Friday’s COF report, with feeder cattle bursting to near gains of $5.00. It’s not that the COF report was so bullish, it’s just the market took a sigh of relief and started a recovery from what is seen as deeply oversold conditions. Especially when viewing the feeder cattle contracts Carrington to discount to the cash index as we get close to March. Weakness in the corn market for the second day in a row added to the feeder cattle strength.

The rally in beef prices on Monday set the tone for the negotiated fed cattle markets early in the week. Packers have been cutting kills in recent weeks, and year-to-day slaughter is down 8% from a year ago, while production is off 4%. Reduced production rates offered early-week support in beef prices. The choice cutout jumped $2.96 to trade at $313.73, and select values were also higher by $1.14 at $303.97. Seasonally, the choice cutout value tends to forge a low at the end of February into early March and rally into summer. February cattle expire on Friday, and currently are indicating a steady cash trade with last week.