This morning, a mostly higher grain trade after Friday's bearish January Crop Report.

Grain prices firmed overnight, in recovery from Friday’s bearish USDA crop report. Despite regional difficulties, the USDA produced a record corn yield of 177.3 BPA, which was still below trendline capabilities. Corn carryout was lifted to 15,342 Mil Bu. Soybeans also had seen a yield boost to 50.6 BPA, helping the bean carry out pushed to 280 Mil Bu. The bullish part of Friday’s report was that All Wheat Acreage came in below the lowest guess and was 34.425 Mil acres.

The sharp recovery in the soybeans off its low was met with a drier climate now forecasted for Brazil and Argentina into January 24-25. The eastward movement in the Madden-Julian Oscillation promotes the return of rainfall in Mato Grosso, Goias Minas Gerais, and Bahia. Any South American precipitation into January 25 will be largely confined to Río Grande do Sul in the far southern portion of Brazil as well as fringe producing areas of Northeastern Argentina.

The return of warmth/dryness to central Brazil into late next week and a potentially lengthy spell of dryness across the core of the Argentine Ag Belt is having many reassess strong production potential. If the coming duration of the absence of rain in Argentina should be monitored. Private Brazilian crop estimates continue to drop to 150 MMTs, it’s with numerous ones already projecting 145 MMTs. From the early harvest, Northern Brazilian yields remain disappointing.

Also, promoting the grain price recovery is an extremely short position that is built up by the index funds. The COT on Friday showed an 8th consecutive week of fund selling, which has happened only a handful of times since 2016.

The NOPA Crush Report will be released at 11:00 am CT today, with analysts expecting a December bean crush of 193.1 mbu, which would be +8.8% over the same month last year. December soyoil stocks are seen to be 1.29 billion lbs vs 1.214 billion lbs in November. Grain prices firmed overnight, in recovery from Friday’s bearish USDA crop report.

Eastern nations within the EU bloc are demanding import duties on Ukraine grains, concerned about unfair competition. The six nations making the demands are key producers of the EU bloc’s strategic food safety supply.

Transportation expenses for Red Sea shipping lanes have risen, with war risk premiums adding hundreds of thousands of dollars in costs following additional attacks by Houthi rebels.

Live and feeder cattle closed higher last week, with a firm outlook anticipated for this morning’s opening. Both markets did trade in a narrow range through the week and were mixed on Friday, with the March feeder cattle market in its highest daily close since last November. The negotiated fed cattle trade was slow, with winter storms limiting it. Sales in Nebraska were quoted $1 lower at $173, with dressed sales steady to $3 lower at $272-275. Sales in IA were quoted steady at $175 live and $275 dressed, while the live trade in the South was $1 lower at $172.

For the week ahead, the snowfall across the Plains looks to be minimal, but the low temps will still be at or below 0° for the next week. Feed yards will be looking to sell at higher prices to offset winter stress losses. The January COF report will be released this coming Friday and may temper any rallies this week. Box beef values jumped $12/CWT last week on the reduction of 17% of the kill compared to a year ago. As soon as harvesting picks up this week, it’s anticipated the box beef values will slip because it was not a demand-based rally but a quick shortfall in supplies due to weather.