The week starts with grains under pressure.

Grain futures opened lower Monday night and pressed lower on a weather pattern shift for South America that is bringing better rain chances in Argentina, along with Russia increasing their crop size to a record 104.5 MMTs. Brazil has harvested an estimated 1% of their record 2023 crop in the north. The pace is expected to start gaining this week amid defoliate efforts and improved weather over a drier forecast. Early crop yields are high, but additional harvest samples are needed to determine the yield trend.

Argentina’s two-week weather forecast calls for near to above-normal rainfall with more seasonal temperatures with cloud cover. It’s potentially a pattern change after a dry four months, but La Niña appears to be fading. An Improved weather pattern evolving now will stabilize the early planted Argentine crops and flourish the delayed planted beans that many farmers waited to do in the latter part of December. If the weather pattern is changing, it also improves the potential for the second corn crop seeding.

Argentine is seeing its first improved weather forecast with above-normal rainfall over the next two weeks, including the southern Brazil area of RGDS. The jet stream is becoming more active, and storms are lining up across t Pacific. A few warm/hot days will prevail for another 2-3 days before rainfall starts to arrive. Then there is a chance of rain every 3-4 days, with the first system this Thursday into Saturday that have totals ranging in the .5-2.00” category. Further rains arrive with very good coverage January 25-26, and then another storm system in the 11-15 day window. This rain is timely and will aid the final seedings. Crops planted in October will stabilize, but considerable yield improvements might be too late.

Live cattle had a higher close last week, while feeder cattle closed lower on the feed grain rally. Later this week will be the Livestock Slaughter report on Thursday and then the Cattle on Feed report Friday. Negotiated fed cattle last week was mixed with southern plains $1 lower at $156, while sales in Nebraska were steady to $2 higher at $157. Live trade in IA/MN was steady at $157-159. Cattle slaughter last week rose to a six-week high of 661,000 head, keeping box beef values under pressure. The choice was down $6.37 on weakness in the choice ribs and chuck primals, while select lost $2.45. Near-term supplies have been slightly better than expected, but the sharp drop in autumn placements keeps the price outlook bullish in the summer.