The first full week of February gets underway with lower grain prices.

This morning’s grain trade is lower, follow-through from Friday’s poor close after Friday’s NFP Jobs Report was much stronger than expected, propelling the Dollar to six week highs, negatively impacting grains. Rains are anticipated to start in dry Argentina in the South on Thursday.

China’s Lunar New Year starts this week (Year of the Dragon is good luck). China is not anticipated to be a large buyer of South American soybeans ahead of their lunar New Year holiday, which starts on Saturday and lasts the entire next week. China’s economic outlook remains gloomy, with the stock market seeking a five-year low last week, starkly contrasting to the US market, which is pushing to new highs. It’s the housing market bust that is hampering Chinese consumer confidence.

Russian wheat exports continue at near record/record levels, with Black Sea weather improving. Russian farmers need to sell cash stocks for spring planting. The FOB market has now retreated to the $229-231/MT value, where fresh export demand is needed to lift the price structure. Turkey’s Foreign Minister said that President Erdogan and Putin will meet soon, and Erdogan plans to discuss a new mechanism for Ukraine exports via the Black Sea. There is no pressure from either side to get the deal done.

Later this week, the USDA and CONAB will be releasing data. The South American crop potential is in decline in the 2024 crop estimates and will likely be reduced again later this week. Again, the reality of the crop will not be known until the May/June data is reported. But for now, the Argentine crop is also in decline, while rain is anticipated later this week.

Forecast models maintain extreme heat and dryness in Argentina and S Brazil into Saturday with a chance of rainfall in the 1-1.25” rains with some locally heavier amounts to occur. The best rain chances are pushed into Sunday/Monday. The need for rain in Argentina is immediate, and that looks to be showers, but the amounts will likely not be enough to reverse soil moisture loss with temperatures persisting later into the month to be elevated.

Last week, live and feeder cattle closed higher, with a steady outlook offered for this morning. The negotiated fed cattle market was higher in all regions, with live sales in the South $178-179, which was $3-4 higher. Live sales in the north were steady to $2 higher at $176-178. Dressed sales were $3 higher at $280. Cattle slaughter continued to recover and rose to a seven-week high at 637,000 head, with cumulative slaughter for 2024 still 7% behind last year. Carcass weights fell sharply in January due to the adverse weather and have leveled off but are still 18 pounds heavier than last year. Beef production is just 5% behind last year. April live cattle traded at the 200-day moving average last week for the first time since early November. If that resistance can be overcome, there are chart gaps at $187.50 and $190. Support on corrections is at $178 and then 176.