USDA WASDE report out at 11:00 today.

Grain futures reacted higher last night, with Kansas City wheat besting the December 30 high by a penny before retreating on news that Russia is complaining that the Ukraine Grain Corridor is not working properly. By that, Russian Deputy Foreign Minister Alexander Grushko explained that too much grain is heading to the Western nations, mainly the EU, and more is needed to move to central Africa or SE Asia. These comments are being made as negotiations for the next 120-day extension of the Black Sea Grain Corridor begin by February 15.

With the export season to continue into June, Russia will likely continue the export corridor, as overnight Russian wheat values were weaker and declined to $302/MT for 12.5% wheat for March/April. Russia remains aggressive in offering wheat worldwide, implying that US and French wheat futures are overvalued.

The ERS released a report indicating that US ethanol demand is likely to fall due to new car fuel efficiencies and the growing sale of electric vehicles. ERS indicated that ethanol consumes more than 5 Bil Bu of US corn annually (40% of total usage) and that ethanol demand declined during the initial covert outbreak as Americans were stranded at home. They said that unless exports increase, a declining grind could start to occur in the next year due to lower domestic consumption.

A thunderstorm cluster again erupted overnight in southern Córdoba and Buenos Aires, producing .1-.8” of rain. The system is pushing off the eastern coast of Argentine this morning. The Argentine forecast now offers hot/dry weather for another 4-5 days before showers return this weekend. The rains are anticipated start on Sunday and linger into next week Wednesday. Rainfall totals are estimated from .5-2.00” with locally heavier amounts. The extended 11-15 day period offers another return of arid weather conditions, with the 16-30 day maintaining the repetition of could start to soften as showers every 10 days. The drought is breaking slowly as it is not as dry as the November/December period was. Brazil’s forecast for the next two weeks calls for near to below-normal rains with no extreme heat, which is perfect for harvesting the record crop.

Live cattle and feeder cattle spilled into profit-taking yesterday after touching new contract highs in the morning for the fourth consecutive session on April cattle. Negotiated fed cattle trade looks like another Friday event as Tuesday had seen limited demand in Kansas, with some sales reported at $159. Elsewhere the southern plains show lists are offered at $161-162. Box beef had choice gaining $0.15, while select jumped $3.61. The choice/select spread narrowed to $9.39 choice premium.