A higher grain trade heading into the January Crop Report.

Grain futures are higher the morning of the January WASDE crop report as tensions build in the Middle East, with crude oil bolting overnight as much as $3.00 as the US/UK attack Houthi Rebels with a large force presence. Rebel Houthi forces vow additional terror and an increase in Red Sea ship attacks in response to the retaliation. Geopolitical news now becomes the attention of traders in front of a three-day weekend from Martin Luther King Day. The US hitting Hezbollah creates a greater that Iran may get involved in the skirmish, raising increased oil supply risks. We had recommended filling spring and summer diesel fuel needs late last week and early this week on the weak pricing that was offered in the May heating oil.

Argentina’s inflation rate soared in December by 211%, with the black-market rate for the peso rising to 1,120 on Argentine is worsening economic outlook. Due to soaring domestic prices, the Melie administration pledged to print 10,000- and 20,000-peso notes by June. Due to the record inflation, Argentine farmers are unlikely to sell any grain in large portions. Grains to them are like holding gold coins; you sell them when you need money. Argentine grain export tax was increased on meal and soybean oil to 33%, matching the bean tax.

It’s reported that China imported 9.82 MMTs of all-origin soybeans in December, which is down 6.9% from the prior year but up from November’s 7.92 MMTs. For the calendar year, China has imported a record 99.4 MMTs, and this is up 11% from 2022. China’s demand for soybeans continues to grow despite windows of slowdowns.

Brazilian forecast models show net drying across NE and N Brazil and improved rain chances for more southerly crop locations. The 10-day rainfall map from the EU model shows that following recent rains across N Brazil, there is some below normal rainfall transit will develop but not pose a yield wrister crops at this time. Rain totals will range from 1-2.50” with locally heavier amounts.

Live and feeder cattle futures closed higher yesterday, with a firm outlook anticipated this morning. Cattle futures trading has been caught in large sideways swings, with recent trade now back near resistance for feeder cattle, with live cattle still $1.00 away from recent highs. Negotiated fed cattle markets remained quiet, with a small number reported traded in any at $175 life and steady at $275 or dressed basis. Winter storms are impacting feed yards, and they are watching beef prices push higher and will be looking to trade no less than steady money. Yesterday box beef picked up $2.82 on the choice and select rose $3.00. When the weather improves, and the Packers go to a full schedule, the recent gain in box beef values will subside, as they are not demand-oriented, but limited supply created by lack of harvest.