The grain trade is mixed this morning on lighter than normal volume.

This morning’s grain trade has row crops firm while wheat is mixed. China’s Golden Week Holiday will extend through Thursday. Brazil’s Carnival is also this week. This may lead to diminished CBOT trade volume with both parties “absent.”

The USDA Outlook Forum starts on Thursday in Washington, DC. Analysts are looking for 2024 US bean acres near 86.4 million compared to 83.6 million last year. Corn acres are expected to be 92.0 million compared to 94.6 million last year. US wheat acres at 47 million compared to 49.6 million last year. Wheat continues to struggle under the burden of large EU and Russian exportable supplies and sagging Russian fob prices.

Friday’s Commitment of Traders report showed managed funds sold 17,593 contracts of corn (net -297,744), sold 22,053 contracts of beans (net -130,300), and sold 1,920 contracts of Chicago wheat (net -66,738).

CPI Inflation data tomorrow is the key macro event for the week. This has important implications for Fed interest rate policies. Investors expect a drop to +2.9% y/y vs +3.4% y/y last month. Bond markets are currently pricing in four interest rate cuts in 2024, with the first in June.

Rain is falling across Central and Northern Argentina this morning, providing relief following weeks of extreme heat and dryness. Since the rain started late last week, it has continued daily. Argentine soil moisture levels are now increasing while temperatures have moderated. The drying trend returns to Argentina and S Brazil in the 10-15 period, with rainfall of .1-.9” with less than 50% coverage.

The cattle futures on Friday marked another week of gains, with a firm outlook anticipated this morning. It was the best weekly close for the April live cattle since early October, stopping short of the November chart gap. Meanwhile, March feeder cattle gained $7 last week, and the cash index was up $6.63, marking the highest weekly close since October. Negotiated fed cattle trade held off until late Friday, with sales in the north quoted at $182, up $4 for the week, and the dressed trades at $285-290, were $6-11 higher. Live sales in the South were $4 higher at $182. Box beef values at the end of the week were higher but did not keep pace with cattle prices. The choice cutout was up $0.96, and select gained $1.6. This put estimated slaughter margins at $34/head, the lowest for mid-February since 2017.

The large trader sentiment has now swung back to bullish, aligning with the longer-term fundamentals, which are bullish on tightening supplies. Packers will try to manage their inventory now, similar to what they did in the third quarter, but they have lost leverage as weights have declined.