Grain futures softened overnight on better-than-expected Argentine rainfall

Soybeans and meal pushed new calendar highs overnight after the opening but quickly retreated as the rains forecasted for Monday-Wednesday got underway in Buenos Aires. Rainfall overnight continues to break out, and now updated weather models have increased rain totals to .5-3.00” for total accumulation in the planned weather event for Monday-Wednesday. At the end of the last week, the best rains were anticipated to be just 1.00”. So, again, forecast models under projected rainfall and current rainfall will maintain the stabilization or potentially improve the crop with cool and sunny weather for the last half of this week and into the weekend.

A third mysterious object was again shot down over the Canadian border this weekend as these US balloon infractions continue to worsen US and Chinese relations. China came on claiming US balloons also invade its country with regularity. This also was part of the cooling effect of the grain values overnight.

Tuesday, the CPI will be released for January data, influencing the US central bank’s decision on interest rate increases or pauses. The US dollar’s recent rise is tied to the January jobs number released on February 2, which was almost 2 and half times the estimate. Later this week, the CBO will release the latest cost estimate on the Farm Bill program. These estimates are baselines that are setting the parameters of how much Congress can spend in writing a new bill. Concerns are with new demand fiscal responsibilities the US Farm Bill will get pushed into 2024.

In Argentina, overnight showers erupted across La Pampa, Buenos Aires, and Cordova with rainfall totals of .4-2.50”. Rainfall totals were much higher than anticipated late last week. Additional shower chances are maintained through Wednesday on this front, and cooler/drier weather will arrive for 5-6 days. Additional showers for the rest of this early week range from .25-1.25 in Central and Northern Argentina. The 11-15 day forecast offers a chance of rain on the Canadian model, while the EU and GFS models are a little dryer with warmth returning.

Spot February cattle closed higher last week with deferred’s slightly lower after setting contract highs at the start of the week. The fed cattle trade was higher in all regions, with live trade in the southern plains held late in the week, but some sales were $2 higher at $160. Live sales in Nebraska and the IA/MN regions were quoted at $160, which was also $1-2 higher. Dressed sales were up $4 at $254. Live prices are now $17-20 higher than a year ago and are the best prices since May 2015. Box beef values gained $4.92 on choice, with select up $2.68 last week. The estimated slaughter margins weakened with last week’s cash trade at an eight-week low of $88/head. The packers haven’t made that little in five years. Cattle futures will likely need further cash improvement to continue their advance into new contract highs.