Some rains arrive in the Western HRW wheat belt.
The grain trade is mixed this morning, with soybeans finding buying interest on continued forecasts of heat and dryness over the next 10 days as the Argentine crops push quickly to maturity for their final yield. Wheat pressed lower overnight, with Kansas City and Chicago rechallenging Friday’s lows as some rain has fallen overnight in the Western HRW wheat belt. The rains are the start of a potentially improving weather pattern for the spring, with more needed to change the current “long in the tooth” drought.
US soybean rail basis on Friday dropped another $5/ton due to increasing domestic supplies. Export demand has started to diminish, with South American values collapsing. Argentina will import soybeans from nearby Brazil and Paraguay to maintain their soy crush and exports. US soymeal exports will be pressured by domestic basis bids softening.
Dry weather has occurred across most of Argentina, with only east-central Buenos Aries receiving rains of under 1 inch. Weekend temps were from the 80s to the low 90s. Forecast models maintain below-normal rainfall with hot weather through Argentina for the next 10 days. Widely scattered showers are possible Wednesday/Thursday with rainfall of .1-.8”. The 11-15 day forecast offers a few lite showers but nothing that change the character of the current 2023 drought.
Cattle futures end of the week firm ahead of the February Cattle on Feed report, which came in mostly neutral to expectations. January marketings were as expected at 104% of last year, with placements at 96% and the feedlot inventory number at 96%. Box beef values had seen choice gain $6 while select climbed $11 on falling beef supplies. Slaughter margins jumped $49/head to $166. Rallies, as of late, it’s have become a struggling event with a push to new highs met by quick selling during the day session.