Grains fail to find a Turnaround-Tuesday.

Grain futures are lower today after yesterday’s poor technical closes. Improving moisture prospects in Argentina beyond January 20 continues to prompt liquidation. Russia made an aggressive offer to Egypt, taking the legs out of the wheat market once again. Kansas City wheat falls through its December low on the growing prospects that HRW wheat acreage will be increased in this Thursday’s crop report by almost 2 Mil acres. RMA sign-up data already implies 1.5 Mil acres.

South American corn FOB offers continue to rise, with the US Gulf now level with Argentina. Reliable Brazilian offers are becoming challenging to find. Overall, the Brazilian safrinha corn crop will determine global trade flows from this summer forward. Ukraine remains the most competitive seller of corn to Europe and Asia.

In the Egyptian wheat tender, Russia offered 500,000 MTs at $337-340/MT,
including cost and freight. This is $10-13/MT below Romanian and French origin. Russia appears willing to undercut all others despite rising freight and insurance costs.

SA weather shows that the drought will stay intense in central Argentina over the next 8-9 days, but there are decent odds that the weather will change, with potentially moderate to heavy rainfall impacting northern Argentina in 10 days. What is being watched is if this is the beginning of a pattern change that dissipates some heat and eliminates some of the complete dryness. ENSO forecasts maintain neutral conditions, which means neither La Niña nor El Niño as early as March. The forecast is waiting to see if the rain will be pulled into the 10-day outlook by late week. Maximum temperatures this week in central Argentina reach the mid/upper 90s. The driest areas of Brazil in Rio Grande do Sul receives potentially 1-3” of rain this weekend. Regular rainfall and mild temps remain the theme for most of Brazil’s soybean belt through late January.

Monday was a firm price day for live cattle and feeder cattle futures, with a steady/better outlook offered for early trade today. Fed cattle supplies are thought to be tighter this week, with estimated slaughter margins holding firm as beef prices are at historical levels for January. Box beef did gain yesterday, with choice up $3.15 and select gaining $0.26. The choice/select spread rose to a historic $26.54 choice premium. A year ago, the spread was $10.72, and there’s only a handful of years the spread has traded beyond $11.00 in January. Live cattle trade tested and held support on Monday.