Argentine crop estimates keep falling.

Private Argentine corn and soybean crop estimates continue to be cut due to the drought turning out to be one of the worst in 60 years. We are seeing a soybean decline to 28-30 MMTs and corn decline to 36-39 MMTs. With the ongoing hot weather and dry February, they are seeing yield get pummeled and acres being abandoned.

With the reality of Argentina’s production decline, analyst are now finding that Brazil does not have enough production to make up the Argentine shortfall. Talk of Argentina having to import beans from other countries would have an impact on the world crush capacity.
Based on vessel counts, China soybean imports to date are record large. That could be the light at the end of the tunnel that will boost the need for more US bean acres this growing season.

Russia is still exporting wheat at a fast and relatively cheap rate that continues to pressure our wheat prices. Chicago wheat is at a 17 month low this morning and yesterday’s export inspections were flat. Crop conditions in Ukraine and France are looking favorable for spring development. The stronger dollar is hurting our exports with only seven countries booking shipments of US wheat last week. The plains are looking to receive yet another shot of moisture this week.

Feeder Cattle made new highs again yesterday in all contract months after March. Multiple live cattle contracts also made new contract highs. The week’s outlook for cattle remains favorable with seasonal demand building and supplies narrowing. Watch for higher cash cattle prices this to keep the momentum going in the CME.