China may have bought grain, and Russia grumbles.

Grain futures firmed overnight as Russia is now talking a little smack as they are creating a hurdle to extend the Black Sea Corridor amid the recent US/EU sanctions impacting their financing/insurance and Azov Sea grain transportation. Russia states that the new economic sanctions encumber their grain/fertilizer exports.

Negotiations have yet to start as Ukraine has reached out and received no response from Turkey, with the pack set to expire in two weeks. There is a considerable amount of diplomatic work to be completed. Sizable fund selling has hit the grain trade over the last two weeks, and now the increase in funds shorts for wheat could set up another squeeze.

There are rumors that China purchased US corn and sorghum on Wednesday, which, if confirmed, will get documentation by USDA sales announcements today or Friday. It is estimated that China may have purchased four cargoes of corn/sorghum each or as much as 1.5 MMTs of US corn. China experienced the best import margins since last July, and given the drought and loss of Argentine corn, this may have pushed China to step forward and make some feed grain purchases.

The USDA crop report is again next Wednesday, giving the USDA another chance to make a guess on the Argentine crop size, which will likely be lower given recent reductions by the Buenos Aires Grain exchange. Also, the US’s ag attaché in Brazil maintains its soybean crop estimate at 153 MMTs due to record yields across Northern Brazil which will likely have offset any losses in the RGDS/Santa Caterina yields in southern Brazil.

The Argentine forecast now moves to an extended period of hot/dry weather. The next chance of rain is showing up in the middle of next week, with the best rains occurring in Western regions, which is West of the key areas. However, extreme heat will return intermittently in the 90s to lower 100s. The 11-15 day forecast has limited rain with ongoing warm temperatures into March 17.

Live cattle and feeder cattle had a high volatility day yesterday by working from a higher session to a sharply lower session but settling with moderate losses. Some early cash sales did occur at higher values in IA/MN, but markets otherwise are at a standstill in the South. Feeder cattle were spooked by the sharp reversal in corn which put heavy losses in the feeders. Recent contract highs have become watermarks over the past weeks that the cattle market fails to push through for the time being. Consolidation trade could be set up that will frustrate traders over the next two weeks.