CPI release produces friendly market conditions.

Grain prices were firmer overnight as soybeans kick in a turn-around Tuesday on a drier/warmer forecast prevailing for Argentina after welcomed weekend rains. Wheat prices continued their advance as massive short positions continued to get lightened up ahead of the holiday season by the index funds. It’s also time to fire up concerns of not only dry conditions for the HRW wheat crop but a cold arctic blast that is headed there, reigniting the concerns for the new crop supply in 2023 which gets cycled through the news filter again but will not carry lasting weight until beyond February of next year.

US Labor Department’s release of the December CPI report this morning had percentage date increases slightly less than average estimates creating a sharp break in the US dollar back below 104.00 this morning, igniting buying in the metals, energies, and indexes sharply higher status this morning. Weakness in the US dollar is also supportive of the commodity spectrum. It’s anticipated that the Federal Reserve will only raise interest rates tomorrow by .5%. The market will be watching for the communiqué that comes out at 1:30 p.m. as to the FED’s potential to pause rate hikes in the interim.

The Ukraine Grain Trader’s Union asked the government to prioritize electricity to grain silos and loadout facilities to help maintain grain quality and movement. Russia is targeting Ukraine’s infrastructure, which is causing concern about the ability of Ukraine farmers to maintain harvest movement of grain amid electrical blackouts.

South American weather forecasts maintain optimum growing conditions for Central and Northern Brazil while the southern point in the RGDS region and Argentina turn dry again. EU and GFS models agree that heat and dryness will return to Argentina over the next 10 days. Extreme heat redeveloped later this weekend in the 90s/lower 100s. After the brief rain interlude in the northeastern portion of Argentina on Sunday, the weather forecast returns to a drought picture.

Live cattle closed higher yesterday with feeder cattle mixed with a firm outlook anticipated this morning with equity markets firm. Negotiated fed cattle trade is not expected until the week with the upcoming cattle on feed report. Packers are thought to be light on inventory, and feeders are hoping to capture new price plateaus. Box beef values started out strong for the week, with choice jumping $8.09 as the choice ribs primal value gained $33 from Friday. The move in the ribs primal added close to $4 to the whole carcass value. Live cattle have a strong seasonal price pattern to hold up into the new year’s opening.