The CPI data comes in inflationary this morning.

The grain trade is mixed this morning, with soybeans recovering overnight weakness on strength in the soybean oil market following the resurged price lift in crude oil. The CPI data out this morning was considered inflationary and pushed the US dollar up $0.62 to 104.66, while metals and the stock indexes, along with bond values, declined. CPI month over month was estimated to be up 0.2% and came in up 0.3%. Core CPI month over month was estimated at .03%, coming in up to .04%. CPI year-over-year was estimated at up 2.9% and came up 3.1%. This will keep the Fed on hold for any interest rate cuts to likely May or June.

The French ministry cut their estimate of winter wheat seedings to 10.79 million acres, the second lowest in 30 years and down 8% from last year following inundating rainfall that Farmers out of the fields. The ongoing excessive moisture is likely to cause farmers to tear up some of their winter wheat in favor of spring crops like barley or corn. Large old crop EU wheat stocks do their slowing exports will help offer low new crop production.

Ukraine is preparing for EU accession talks, and sources indicate that they may negotiate for easier EU Green Deal rules in exchange for foregoing subsidies. Ukraine feels the green rules will cost more to implement than their farmers will receive in subsidies.

There are several global tenders this morning, including Algeria seeking 160K MT of Argy or Brazilian feed grade corn, Jordan’s purchase of 60K MT of optional origin mill wheat, Japan’s regular wheat tender, and Korea seeking S American origin feed corn. China’s Golden Week will extend through Thursday. Brazil’s Carnival is also this week.

Malaysia’s Palm Oil Board released their January estimates: production 1.402 MMT (down from December’s revised 1.550 MMT), stockpiles 2.019 MMT (down from December’s revised 2.290 MMT), and exports 1.350 MMT (down from December’s revised 1.362 MMT). This pushed Malaysian palm oil futures higher, with some suspecting the tightening stocks lift spot Malaysian palm oil prices to 4100-4200 ringgits/MT.

Rain is falling across Northern Argentina this morning, providing relief from the overnight forecast. It has gone much drier into February 23 with the return of showers promised and an 11-15 day period. Amid the lack of heat, the coming 10-12 days of Argentine dryness should not be overly unfavorable on crop yield potential, but it will again be the key that showers return the last week of February. Seasonal high temperatures prevail with highs in the 80s to lower 90s. These are average for mid-February. It will be closely watched that rainfall returns to Argentina and Southern Brazil in the 11-15 day forecast. The northern Brazil monsoon continues to perform normally.

After an early firm run, live cattle turned lower on the session, while feeder cattle maintained strength on the day. Feeder cattle were supported by a $3 jump in the cash feeder Index, which rose to a 17-week high of $246.06. March feeders marked the best daily close since mid-October. Cash markets are not expected to have active trade until the last half of this week.

The USDA official reporting of negotiated cash trade for last week showed the five-area average dear price at $181.15, a gain of $3.35 for the week and $21.50 higher than a year ago. This was $3.47 under the Friday futures closing price, the widest cash discount for early February since USDA cash reporting began in 2001. The CME is ahead of the cash again, which could trigger a correction as nearby basis levels typically forge a low in late February and then rally on higher into the spring.