The grain trade softened into slow export sales numbers.

This morning’s grain trade is weaker, as the US dollar stays firm above one 03.00 after yesterday’s Federal Reserve meeting, pushing any potential rate cuts later into the year, possibly May or June. Meanwhile, expectations of low numbers for this morning’s export sales weighed on the trade overnight and were met with low weekly export sales numbers. Cheap wheat/corn offers in the Black Sea and ongoing weak soybean offers out of Brazil keep our sales soft. Russian wheat offers are about $.80/bu less than the US Gulf, adding weight to the market despite its oversold condition.

Egypt is reportedly in talks with the IMF to get a deal for $10 Bil in new funding, which would cover the government budget funding gap through the remainder of 2024 and all of 2025. The deal will go a long way toward pulling Egypt from its worst economic crisis in decades as the war between Israel and Hamas rages on next door. The IMF has an urgency to stabilize the economy of this Middle Eastern country as it is the most populous nation. Egypt is the world’s second-largest wheat importer, and its state buyer, GASC, has financing terms as long as 270 days in recent purchases. The IMF/World Bank loan is expected to be secured by early next week.

Argentina is set to update its weekly crop progress/condition report shortly after midday, with the recent dry weather expected to produce a moderate condition drop. This coming week of extreme heat/dryness will cause a deeper condition decline next week before the arrival of showers from February 8-12. Rainfall totals in the last half of February but highly important to finalize Argentine and southern Brazil yield and crop potential.

NASS will release the US December Crush later today. Yesterday, the EIA reported a US November soy oil usage for biofuel production at 1, 062 million pounds, which is the same as October, with November renewable diesel soy oil use rising to 449 million pounds. This is up 100 Mil pounds from November 2022 which is a gain of 20%.

South American weather forecast again is little changed, with heat and dryness to engulf Argentina and S Brazil over the next seven days with temperatures in the 95-106 range. Argentine crops have now gone 21-23 days without meaningful rain. The February 8-9 rains are highly important and need to stay in the forecast.

Live and feeder cattle futures were lower ahead of yesterday’s US Cattle Inventory Report on profit-taking and hedging. The report did confirm the smallest US beef cow herd since 1961, along with the US cattle inventory number that was the lowest since 1951. The report is longer-term friendly, but in the near term it does not historically produce any near-term large responses.

Yesterday, we saw an initial cash trade for the week in Kansas, with small numbers trading at $176, which was $2 higher for the week. The bulk of the week’s business has yet to develop. Cattle feeders are looking for higher prices this week, with asking quoted at $178-180. Box beef values were lower at midweek, with the choice value down $153 and select losing $2.88. The choice/select spread has narrowed by $22 from late December, with the seasonal low likely being put in place by late February. April cattle have stalled out at the 100-day moving average and look to have made a short-term high in the 183.50 price range. Cattle futures typically struggle to maintain strength in February.