Overnight strength fades into the Thursday opening.
The grain trade is mixed this morning after trying a minor bounce in the night alongside crude oil, which had led the commodity complex declines on Tuesday/Wednesday. Overnight strength in soybeans was tempered back as the morning GFS models moved potential rain from January 14, one day sooner, to the 13th. The models suggest rainfall totals of .25-1.25 inches in the critical growing areas of Argentina. In the meantime, dryness and heat will manifest into the weekend.
Tomorrow, Friday morning, the USDA will release the US jobs report with average estimates showing job growth of 200-210,000 jobs in December. If the number is stronger than that, the CPI on January 12 will have big eyeballs on it, as it will imply the Fed may stay much more vigilant on inflation and raise rates in February/April/May. This will influence the US dollar into spring, as recent weakness has been tied to the anticipation of the Fed pausing.
Russian Pres. Putin overnight again claimed that for peace talks to materialize, Ukraine must be willing to accept the loss of territory. This keeps the talks a nonstarter as Ukraine continues to enjoy massive support for the war from the US and NATO. It’s becoming apparent that Pres. Zelensky seems to have no end game but knows the best inflow of resources and money continues to be the war economy.
The extreme heat in Argentina starts today and lasts into early next week, with temps in the 90s and lower 100s through central Argentina. This heat abates in week two of the forecast as the jet stream pushes northward into S Brazil. Showers are anticipated to arrive in the January 13-15th timeframe, with rains of plus/minus 1.00” anticipated. The Brazilian forecast remains near ideal.
Yesterday live cattle were higher, while feeder cattle moved sharply higher on the second day of substantial feed grain price losses. The negotiated fed cattle trade was light on moderate demand in IA/MN, but cattle markets maintain asking prices in the South, which are quoted at $158-159, which would be $1-2 higher than last week. Box beef values were mixed with choice down $4.05 while the select gained $0.77. Seasonally the box beef market peaks this week, and the CME is notorious for scoring a high this week and softens in the month of January.