Chinese Lunar New Year Holiday begins today, and Carnival next week in Brazil.

This morning’s trade is mostly lower, with Chicago wheat higher as the spread between Chicago and Kansas City wheat continues to narrow on dwindling SRW wheat carryout versus the available supply of HRW wheat.

The Chinese Lunar New Year Holiday begins today, with Golden Week extending through next Thursday. Brazil’s Carnival is also next week. This may lead to diminished CBOT trade volume with both parties “absent.”

Traders are digesting the data dump from yesterday, with WASDE, CONAB, and Stats Canada all weighing in with updated numbers. The focus will return to South American harvest, weather, and 2nd crop corn planting. USDA projections for Brazilian production are much more optimistic than those of CONAB: corn 124 MMT compared to 113.7 MMT and soybeans 156 MMT compared to 149.4 MMT. If the lower CONAB estimates turn out to be correct, the USDA should confirm it by May.

The large statistical divide that separates Brazil’s CONAB and the USDA is the widest for the February crop report. Also, CONAB put last year’s 2023 crop at 154.6 MMT versus the USDA’s 162 MMT, which is a difference of 7.4 MMTs. Combining those two crop totals presently is a massive 14 MMTs. This has traders wondering what the true world supply is, with the USDA still carrying such a large crop for Brazil’s prior harvest.

Polish farmers started a weeklong protest today, blocking roadways at Ukraine border crossings and around Polish cities. Farmers are infuriated by EU regs and cheap imports from Ukraine. Ukraine’s Ag Minister indicated war difficulties have forced farmers to plant lower quality seeds. Winter wheat has survived so far but the quality is unknown. Ukraine’s Ag industry estimates that around 2 MMT of unharvested corn remains in fields across the country.

Rain is now falling this morning across Córdoba and Santa Fe, providing relief from weeks of extreme heat/dryness. The extreme heat of the past two weeks has taken the top end off of corn/soybean yield potential. It will be weeks before the amount of damage is known, but the heat occurred during the heart of corn pollination and soybean bloom and pod setting. A five-day wet period is ahead with Argentine crops receiving rainfall of 1.50-4.00”.

Live and feeder cattle prices bolted higher again Thursday, pushing new recovery price highs for both. The live cattle marked the best gains, with April cattle stopping short of closing the November chart.

Yesterday’s February WASDE report lowered the beef production forecast for the year's first half and raised estimates in the last half. Annual production increases by less than 1% from January. The largest changes in the annual import forecast, which jumped by 355 million pounds, which is 9% from January, with the USDA expecting a large increase in imports from Australia. Price forecasts were $1-3 higher in every quarter, with record cattle prices projected. The second quarter forecast rose $3 to $180 which is $2 one over last year. Historically, the February forecast has been too low 51% of the time by an average of $7 and too high 49% by an average of $5. The CME cash equivalent price this week is $11 over the USDA’s projection of $191.