The grains start out Tuesday firmer. Crop report Thursday.

The grain trade is mostly firmer this morning, with the exception of wheat being mixed with soybean oil leading the advance. Short covering started yesterday morning and is expected to have an influence ahead of the CONAB and USDA reports out on Thursday due to the heavy index fund short position.

CONAB will release its Production Report on Thursday (Brazil). The February WASDE Report is on Thursday, with small changes expected to the US balance sheet. The Chinese Lunar New Year Holiday begins on Friday.

The stock market in China is having its best recovery in a year amid the hope of additional economic stimulus. Chinese stocks surged 3%, with Hong Kong up 4%. Macroeconomic trading firms are trying to gauge where China’s government actions can create a bottom in consumer psychology and increase consumption. World commodity markets have had a wet blanket of economic gloom surrounding China since post-pandemic opening a year ago.

After a test of last June’s lows, Soybean oil has firmed with talk that California’s Air Resources Board will meet on March 21. The CARB is expected to discuss and take a vote on staff recommendations that it will require feedstock pathway holders to track crop and forestry-based feedstocks to the point of origin, requiring independent certification, ensuring that the feedstocks are not contributing to other carbon supplies like forests. It’s also anticipated to propose removing palm-derived fuels from eligibility for credit generation, given that palm oil has been demonstrated to have the risk of being sourced from deforested areas. Should such staff recommendations be approved, it could cut tropical oils as being eligible for renewable diesel California feedstock.

Turkey’s Erdogan and Russia’s Putin will meet on the 12th when Putin visits Turkey. According to Turkey's foreign minister, they will discuss the war in Ukraine and the Black Sea grain export corridor.

The head of the EU Commission said she submitted a proposal to kill a plan to cut pesticides in half as it is “polarizing” and EU farmers should be heard. This is in response to recent farmer protests across Europe against many rules that are causing costs to rise and allowing competition from cheap imports. Meanwhile, the EU Commission is proposing the Eurozone adopt plans to cut net greenhouse gas emissions by 90% over the next 16 years, which will impact the Ag sector.

Weather forecast models still show rains starting later this week in Argentina, but amounts are now starting to decline. Rains start across southern Argentina late Thursday and continue over the next week. 10-day accumulations are put in the .5-2.50” range. The best rains are delayed until Sunday/Monday due to three weeks of limited rainfall in the recent 9-12 days of extreme heat; the top end of Argentine corn and soybean crops have likely been lost.

Live and feeder cattle futures retreated on Monday and closed lower, with a softer start anticipated this morning. April cattle did stall at the 200-day MA and marked its biggest one-day corrective decline since early December. Cash cattle markets remained quiet, with active trade expected later this week. Cattle feeders are looking to add another $1-2 to cash prices this week. Box beef values had seen choice higher by $0.40 while select rose by $0.30. The choice-select spread is now at $9.71. The spread collapsed in January as seasonal demand for choice beef relaxed while tightening beef stocks support of the select value. For the week of January 27, 73.02% of fed cattle graded choice. This was the lowest for late January since 2016. February seasonals typically have the board drift this month, with upcoming Lent starting next week.