Soybeans and corn higher, wheat softer to start the new year.

This first trading day of the new year has grains anticipating a mixed opening. Soybeans are called 5-10 higher with corn 1-3 higher, while wheat is indicated 2-5 lower with losses on French milling wheat. Some forecasted rains did fall over key Argentine crop areas, but coverage is only 50-55%. Now there’s a forecast for a lengthy period of dry weather over the next 10 days with heat in some areas ranging in the 90s to lower 100s by the weekend.

Keeping in mind that it’s the new year, soybeans are carrying nearly a two-dollar premium to spot beans last year, as the March contract was at $13.55 with Friday’s close of 15.24. The market is pricing in Argentina losses while the Brazilian crop is setting up to have record potential. With the US in the wings to provide further exports with the current state of sales behind last year, this keeps spot beans capped under $16.00, even with farmers switching planted acreage over to corn in hopes of catching a weather change late in January.

Corn prices will watch Argentine weather, as their corn crop growing window is February-March. Adverse weather later in the first quarter would be required in Argentina to get US corn futures above $7.00.

Wheat prices softened on the French milling wheat board and are down $1.50 a MT as Russia continues to capture export tenders, and now India has decided to sell 2.1 MMTs of wheat reserves to cap rallies in their domestic market. The decision in India is expected in the next 10 days, and their new wheat harvest starts in late March and continues during April. India is adamant about controlling record-high prices for their food inflation.

The South American forecast continues split, and with Brazil receiving nearly ideal weather except for some areas of dryness across their southern state of RGDS. Argentina continues to struggle after weekend rains that total point 15-1.25 with roughly 50% coverage. Dry weather returns now, with heat in the 90s and some lower 100s by this coming weekend. There are hints in the La Niña forecast, and MJO pulses across the Equatorial Pacific suggest that weather may change late in January.

Live and feeder cattle ended firm for the last trading week of the year, and a steady outlook is anticipated this morning. Negotiated fed cattle last week were $1 higher at $157, which was the highest price paid since May 2015. Cattle in Nebraska were $1-2 higher at $158 on a live basis and $3 higher on a dressed bases at $252. Last week’s choice cutout value gained $10 to $281.98 and select was higher by $5.46 at $250.93. For the new year, choice is $17 higher, while the select is $7 lower than a year ago. Live cattle prices have enjoyed a strong seasonal lift since December 7, and there is a strong seasonal correlation for cattle to peak on the board this week and drift for the month of January, of course barring inclement weather in the feedlot states.