Dryness in the Plains lifts wheat overnight.

This morning’s grain trade is mostly higher led by the wheat trade gaining .08-$0.10 on the winter wheat contracts on dry plains weather. Soybean oil is sharply lower as canola oil has been limit down and is currently trading just above limit down on the May canola contract at 605.70, off $39.30.

On Saturday, China hit Canada with 100% tariffs on canola oil, meal and peas. The tariff has shut down canola and pea trade between both nations, which amounts to nearly $1 billion. The tariffs went into place against Canada in retaliation for their EV and aluminium tariffs. This includes the threat of 25% US tariffs on Canadian canola and products by April 2 if Canada does not comply with Pres. Trump’s requests will likely have farmers pushing canola/canola oil into the US until then.

Tuesday at 11:00 a.m. is the March WASDE supply/demand report. Annual US corn ethanol crush rates will likely be raised by 25 Mil Bu, but it’s not expected to see any change in US exports. Since tariff impact is impossible to forecast at this time, as China has not been a buyer of corn, WASDE will await reciprocal tariffs to be announced after April 2 before they start trying to make adjustments. It’s anticipated that the ending stock estimates will be similar to February. The most important aspect of the report will likely be the USDA’s take on the South American crop sizes.

The USDA has indicated that it will not vaccinate US poultry against avian flu, as USDA Sec. Rollins' reasoning indicates that the vaccination is ineffective.

A two-week arid plains forecast is in place into late March, creating drought concerns. Warmth looks to persist across the Central US as this warm, dry weather dropped sharply into the southern and central plains, reducing soil moisture. Several extreme wind gusts will produce blowing dust late this week and weekend. Meanwhile, the drought deepens across the Black Sea into March 20, with limited rainfall for Black Sea wheat crops over the next ten days. Near-record temps will be centered across this area, with highs in the 80s. This is helping lift wheat prices overnight.

Cattle futures exploded higher, ending with solid gains on Friday’s close after the early week liquidation from index funds. A firm outlook is anticipated this morning. April live cattle had an $11.50 range before posting a Friday close over $200.00. Feeder cattle futures gained $5-7, while the cash index declined $7.00. Last week’s negotiated trade had good gains in the late week, with live trade in the north $2-4 higher at $200-202. Dressed sales were $4-5 higher to end the week at $317-318. Live trade in the South was $3 higher by Friday at $200.

Cattle slaughter last week rose to a 4-week high of 578,000 head, with still 6000 head less than a year ago. Meanwhile, cumulative slaughter is down 7% from a year ago and the lowest in nine years. The average carcass weight of 876 pounds was 34 pounds heavier than a year ago, and cumulative production is down just 2.6% due to heavier weights. Friday’s commitment of traders report had funds liquidating 10,843 contracts into last week Tuesday and 46,004 and 41 contracts in the last five weeks. That would be the most since October 2021. April live cattle rallied from key technical support last week of 190 and now can target $208, which should be near the contract highs that the February contract achieved.