Grain prices decline as rains arrived in Argentina.

Grain futures opened lower last night and are sharply lower this morning as heavy rains fell across the drought-stricken areas of Argentina this past weekend. The two-week forecast calls for near to above-normal rainfall into February 7. This is threatening the record-long soymeal and sizable long soybean and corn positions by the funds that are at risk of being liquidated into the end of the month.
Weekend rainfall totals varied from .7-3.50”, which was the heaviest rain since last June. This will benefit the delayed crops of corn and soybeans that were planted in December and early January.

Argentine farmers will benefit from delaying their planting with the current rains, which will help 50% of the soybeans and 60% of the corn that was seeded late. The EU weather model offers 2-4.50” inches of rainfall for Argentine’s corn and soybean areas over the next 10 days.

Harvesting is underway in the northern portions of Brazil, and a record soybean yield potential is being uncovered. This is prompting more expectations that the final 2023 Brazilian soybean crop will be 155 MMTs. Weather premium extraction will continue into February as forecasts continue to come to fruition.

Russian Foreign Minister Lavrov indicated that the Black Sea Grain Deal is “more or less” being fulfilled. Grain is being exported from Ukraine, but Lavrov questioned whether Russian grain is being allowed to be exported without restrictions. The Black Sea Grain Deal continues until March 19, when the agreement must be extended for another 120 days. It’s widely anticipated that the corridor will be granted another extension into July.

Cattle closed lower last week but had a recovery started on Friday, and a steady outlook is anticipated the day after Friday’s Cattle on Feed report, which lacked any bearish surprises. The marketings were at 94% of last year’s (95% expected), placements at 92% (91% expected), and the feedlot inventory at expectations of 97%. Last week’s cash trade in the southern plains was $1 lower at $155, while live sales in Nebraska and the IA/MN region range from steady to $3 lower at $153-156.