Grains continue the recovery for mid-week lows.

Grain futures were firmer overnight, with Chicago wheat weaker than the other wheat exchanges, as 704 contracts were delivered, with only 90 contracts for Kansas City wheat. Grain prices put in a low “last day of the month/1st day of the month” and are recovering as Argentina, and the Black Sea Corridor become refocused.

Soybeans have enjoyed the most significant recovery from the massive selling and are almost unchanged on the week (closing last Friday at 1519.4). February temperatures in Argentina were record warm along with the below/much below normal rainfall crop stress. The Buenos Aires Grain Exchange reduced the soybean crop to 33.5 MMTs last week, and now it’s being discussed that it could be as low as 31 MMTs. If rain does not return by the middle of March, a sub 30 MMT crop is possible, with the corn crop sliding to 37-39 MMTs from the initial estimates last fall a 55 MMTs. Argentina’s yield reduction is now getting close to 40%, which is near the worst drought in decades.

Other drought stress in the world has Northern India enduring heat/dryness that is adversely impacting their wheat crop. Crop loss estimates are not provided, but it would be the second year in a row of yield reductions. The Indian weather forecast will start to become in focus along with the HRW Western wheat belt.

Next week is the USDA March crop report that will grab some headlines, but at the forefront will be the Grain Export Pact between Russia/Ukraine, as the extension ends on March 18. Time is getting short, and no significant communications have started. If no one objects, it automatically renews on March 19, but the noise from Putin and various Russian Ag ministers implies they are not going to let it happen that easily.

Live cattle went into correction mode yesterday after Wednesday’s failure to challenge contract highs, while feeder cattle closed mixed. Negotiated fed cattle remains quiet, with light trade quoted in IA/MM at $165, which was steady with early week sales and $1 higher from last week. Offers remain quoted at $166, but hedged feedyards might be coaxed with steady bids and pick up a $1-2 basis. It’s not uncommon after the February live cattle contract expires, cash trade can move to a positive basis over April. Live cattle April have significant support in the $160-162 range.