Soybeans firm on Argentine drought, corn and wheat soft.

Grain futures are mixed this morning, with the wheat market sagging alongside French milling wheat values and corn drifting lower with the declining crude oil, which has been down over $$2.00 a barrel over the slowing prospects of China increasing energy purchases soon with rising Covid infections. Soybeans are higher in balancing the $15.00 range overnight on the arid Argentine 10-day weather forecast. China celebrates its Lunar New Year Holiday for a week after January 22, with raw material purchasing coming to a halt.

Russia continues to remain active, offering wheat through March at extremely competitive prices. Russia is offering its 12.5% wheat at $314-316/MT for the next 60 days. March offers are at $317/MT. So far, Russia has exported a record 4.4-4.5 MMTs of wheat during December. This puts Russia on a path to export 43-45 MMTs of wheat in the 2022/23 crop year, nearly filling the void of diminished Ukraine exports. The USDA has Russia down for 42 MMTs of wheat exports. In the meantime, Ukraine is becoming more aggressive, with its FOB corn offers being just $0.15 over the CBOT for February and $0.20/Bu over March. US Gulf corn is offered almost a full $1.00/Bu more expensive than Ukraine’s.

South American weather remains the same, with Brazilian weather forecasts remaining favorable, excluding RGDS. Brazil has an ideal combination of rain and cool temperatures. The forecast for Argentina continues to show a new round of heat and dryness into January 13. There are hints of better rains in late January as the MGO pulses across the equator old Pacific. For the next 10 days, Argentina will endure temperatures in the 90s to lower 100s. The market will be closely watching for a pattern change in late January.

Live and feeder cattle corrected again for the second day in a row as follow-through technical selling weighed on the futures trade. Negotiated fed cattle trade was not tested, and fed supplies this week are thought to be better following back-to-back holiday weeks of reduced kills. Box beef was strong again to start the week, with choice jumping $4.97 and select gaining $3.70. The choice value begins the year at a record price. CME cattle futures seasonally find a high in the first week of January and then flounder for the balance of the month. Tightening fed cattle supplies will be an ongoing theme each month moving forward into summer.