Relief rally occurs overnight in grains.

The grain trade is higher this morning, as it has been on numerous mornings since its nine-day freefall and is now bouncing from extreme oversold conditions. Corn, wheat and soybeans all are roughly $0.15 off their freefall lows traded Tuesday midmorning. The minor bounce that is currently being experienced comes from Commerce Secretary Lutnick yesterday afternoon saying there might be a compromise in the works with Mexico/Canada after having already implemented the tariffs on Tuesday. Details are sketchy and are always spoken in a this-or-that confusing conversation, creating the slight bounce this morning that lacks confidence.

Tariffs have now been digested over the past two weeks and have fallen into what could be projected as raw value for corn and wheat with soybeans working into an unknown. Brazilian soybean FOB premiums remain abnormally high relative to the harvest progress and crop size. Ukrainian corn basis has soared and is now up another five cents a bushel this morning, with Brazilian-origin corn not offering reliably until we get to the summer harvest in July. US wheat is now offered competitively for the first time in years, with spot Russian FOB holding at $249 versus Gulf HRW at $242. Gulf SRW is currently the world’s cheapest milling supply, below Argentina for April- May delivery.

Volatility will remain high and the market is now trading headline to headline. Trends other than the collapse of the last nine days will now be more random until we can get confirmation of agreements from Canada and Mexico. It is a foregone conclusion that China’s issues will take some time to resolve. Given current conditions in the northern hemisphere over several countries, weather- and supply-driven recoveries (corn) are likely to occur in order to capture price opportunities.

The South American forecast is mixed and inconsistent in the next 8-10 days. Regular showers are needed in central Brazil following abnormal dryness in February and early March. One-third of the winter corn crop needs rain and is struggling with heat. Dryness now blankets Argentina after Saturday after 2-4 inches of rain impacted La Pampa and Buenos Aires over the next five days. In Brazil, scattered showers are possible after March 14, but the major broadcasting models are at odds or precept accumulations in the 10-15 day window.

Live and feeder cattle experienced a volatile session with a positive ending. Early in the session, deep losses went to major support values on both live and feeder cattle charts, and then they experienced large outside-day higher trades and closes. (An outside reversal day higher is when a market takes out the prior day's low and closes above the prior day's high.) This morning, a steady/higher start is anticipated with comments from the commerce Sec. Lutnick yesterday afternoon that there may be a quick resolution with Canada and Mexico. Again, that is headline-driven. 3,400 head of Mexican feeders traded into Texas, New Mexico, and Arizona on Tuesday versus 6,700 had the same day a year ago.

April live cattle found support at the 190 price range we had been projecting as significant support and at its 200-day MA. The reversal rally from those lows is important and decisive, implying that the current cash break will likely do no worse than that. Yesterday’s reversals helped maintain the long-term uptrends in the cattle trade and helped project yesterday’s lows as significant. Strength may not be consistent, but breaks should now find bids at values higher than yesterday’s lows.