Grains start softer to end of the week.
A Chinese high altitude spy balloon was caught passing through airspace over Montana yesterday. This doesn’t help the US/China relationship that has already been deteriorating and can also affect grain trade going forward. Grain futures did fall on the news of the balloon but have since bounced off the lows.Crop ratings in Argentina have recovered and talk of record crop size being heard again.
Argentina corn ratings improved by 10% to 22% Gd/Ex which is not far behind average for this time of year. With moisture in the forecast, that rating is expected to get better next week.
Rains fell in Argentina yesterday with totals ranging from .1-1.5 inches accumulating with temperatures in the mid-70s to low 80s. Temperatures will start to rise next week but only to the 90s. The next rain falls are forecasted for the middle of February; however the amount and locations of those rains are still unsure.
Brazilian harvest is intensifying with below normal rainfall for the next few weeks. They are able to harvest their potential record large corn and soy crop without weather delays and look to plant winter corn once done with harvest.
Live cattle saw contract highs across the board on Thursday with a firmer outlook today again. Feeder cattle have their fair share of strength as well with the cash index pushing higher and corn being under pressure. Steer carcass weight was up 1 pound at 915 pounds for the week but that is 10 pounds lighter than last year at this time. We will see the seasonal decline in fed cattle weights into early summer by an average of 45 pounds. Seasonally the highs in the cash market come during the second quarter and reduced fall placements keep the cattle outlook bullish on any correction.