Friday's grain trade mixed start, beans near the low of the week.
Grains are softer this morning, with soybean oil finding a bid as spreads unwind and meal continues to soften. Improved Argentine and southern Brazil weather for rain are on the way, with this weekend’s widespread coverage of 1-2” expected. Also, China goes on its Lunar New Year for the next week starting today, with minimal activity anticipated.
Overnight Buenos Aires Grain Exchange cut the forecast for Argentine corn production to 44.5 MMTs amid their ongoing drought. However, corn seeding is still underway, and the exchange indicated that the coming rains would be important and could change their outlook. Last Thursday, the exchange cut their soybean estimate to 41 MMTs from the early season forecast and indicated that the number would rise in future reports if upcoming rains materialize. Rains are falling this morning in Córdoba, La Pampa, and Buenos Aires.
Egypt purchased 50,000 MTs of Romanian corn in their first corn tender at $3394/MT CIF, this is more than they paid for milling wheat last week. The price of feed wheat in many sectors world is cheaper than corn, especially with Australia having supplies. Southeast Asia has been focusing on feed wheat for March-May needs rather than corn.
The GFS forecast model offers regular intervals of rain, with one system this morning already going through Cordova/Buenos Aires. The system pushes east through Saturday, producing .5-2.00” of rainfall. Another system follows with like amounts of rain next week. The EU model offers 2-4.50” of rainfall for Argentine corn and soybean areas over the next two weeks. The GFS is the dryer model and has been less reliable in recent weeks.
Live and feeder cattle were lower on Thursday, with disappointing cash trade occurring ahead of today’s COF report. The South was $1 lower across KS and TX at $155, while dressed trade in NE and IA/MM was $2-3 lower at $248-249. Box beef values were mixed as choice fell $2.57 while select gained $1.83. The choice select spread fell $4.44 to a $15.82 choice premium. The January Livestock Slaughter report issued yesterday showed that December cattle kill was down 5% from last year, while the average carcass weight was 7 pounds lighter. Commercial beef production was down 6% at a four-year low. The fed cattle slaughter was at 94% of last year, which is slightly less than expectations for today’s COF marketings number. Today’s COF data is out at 2 PM with On Feed at 96.7%, Placements at 91.1, and Marketings at 94.7.