Soybeans are at risk of a lower week-over-week close.

Grain futures are mostly higher this morning, led by the French wheat trade advancing as French milling wheat recovers back to its early week highs. Soybean futures are moderately higher as soybean meal reversed overnight gains when Russia announced they were cutting crude oil production by 500,000 barrels a day in March, triggering a rally in soybean oil and reversing the recent spread action. The Argentine forecast again went even drier for the coming rain event early next week with limited rain in the 10-15 day period, worsening the drought heading into March. Surprisingly, the morning price reaction for soybeans is more muted compared to other mornings on the weather.

The Buenos Aires Grain Exchange had lowered the Argentine soybean crop to 38 MMTs, weeks ago, and now WASDE on Wednesday lowered it to 41 MMTs. With additional dry weather over the next two weeks, we will likely see further cuts from BAGA and WASDE. The market reaction currently is one that is accepting that the Brazilian record crop will be satisfying demand that is missed by the reduced crush out of Argentina. Last Friday, soybeans closed at 1532, anything less on today’s settlement today would imply a lower high and a lower low with a lower close this week. That is not a sign of a healthy bull market.

For next week the Argentine and S Brazil two-week forecasts are drier. Another 3-4 days of hot/dry weather will linger across Argentina and S Brazil. The next chance of rain falls from late Sunday in the first half of next week with totals of .15-1.25” on coverage of 50-60%. This current forecast is half of what was anticipated earlier in the week. The 10-14 day forecast continues with arid weather with heat returning after February 22. Again, the current forecast is considerably different than what was anticipated earlier this week and will not help crop conditions.

Live cattle yesterday were mixed with a firm feeder cattle trade. Cash markets remained quiet, with sales in Nebraska and Western Midwest continuing to move along with unchanged. Southern plains trade still needs to be established. Box beef values gained on Thursday, with choice higher by $2.09 and select up $0.85. The choice/select spread widened to a historic $15.28 choice premium. This week’s data shows that heifer slaughter in the first four weeks of the year has averaged 39.7% of the Fed cattle kill, the largest since 2003. The US cow herd is continuing to contract at a rapid rate.