Grain trade absorbs potential Russian/Ukraine cease-fire.

This morning’s grain trade is mixed with wheat softer while row crops are steady/firm. Volume has dropped considerably, with three full trading days remaining until Monday at 11:00 a.m., when we receive the Stocks and Acreage Intentions report. The average estimate for corn is at 94.4 million acres, soybeans at 83.8 million acres, and all wheat at 46.4 million acres. Spring wheat acres are estimated at 10.5 Million, down 100,000 from last year. Combined US corn and soybean seedings are put at 170.2 million acres, up 500,000 acres from last year. This is where surprise could come from, as some do not believe acreage will grow in the current environment, and urban sprawl is not being accounted for by the USDA.

The USTR will hear additional objections to the Chinese vessel port fees today. This will be the second day of hearings to ensure that all comments and objections can be voiced. Nearly 400 comments were lodged with the US government, with the vast majority being negative against the proposed Trump Chinese Vessel tax initiative. It’s unknown whether President Trump will listen to the outpouring of objections and their effects on agricultural exports.

The grain trade appears to have fully absorbed the concept of a Ukraine-Russia cease-fire. However, if it occurs, as Russia still has numerous items it wants to agree to, such as unfrozen banking arrangements, they will not see an increase in grain through the Black Sea transit, as Ukraine and Russia are already exporting at their maximum potential for the old crop. Algorithmic trading systems that read headlines seem to believe a large grain flow is coming. That may occur if rain arrives for the winter wheat crop, which will not see the transit of that grain until later this summer, and the corn this fall.

The plains weather forecast for the next 10 days remains arid with warming temperatures. Showers are possible across Nebraska on the weekend and again next week. Meanwhile, Kansas, Oklahoma, and Texas continue to experience warm, dry weather trends. The EU 11-15 model attempts to draw rain into this region, whereas the GFS and Canadian models remain dry.

Live and feeder cattle futures closed mixed after a sharply lower session run from liquidation that triggered sell stops when Monday’s lows were taken out. Some light cash trade was quoted on Tuesday, with dressed sales in the north quoted at $1-4 lower at $334 to $330, and live sales in the South were down $2 for the week at $210. However, the sales volume was considered light, with most of this week’s trade still to come. Box beef values found the choice jumping $8.08 to $335.19, with the rib primal jumping $32.88/CWT, and the loin primal was higher by $14.53. The select cutout gained just $0.47.

Yesterday’s March Cold Storage report showed beef stocks at the end of February at 390 million pounds, down 6% from January and 2% less than a year ago. This marked the 25th consecutive month that stocks were below the previous year's level and the tightest February stock figure since 2014. This will provide support on sharp breaks and help underpinned prices. Volatility looks to expand as the percentage movement of higher record prices creates larger swings.