The grain trade has corn firm ahead of Friday's GREET.

Grain prices are mixed this morning, with corn firm against another near limit up move the cotton market again (likely will draw acres to cotton from corn with current action) while wheat slumps after a two-day rally. Thursday will likely bring another week of poor weekly exports along with deliveries being posted for the March futures contracts. There is talk that private Chinese buyers continue searching for some corn cargo off the Pacific Northwest. A daily announcement is anticipated today or tomorrow.

The Biden administration has imposed a deadline of Friday to announce an update of the GREET model that will be used to measure the carbon intensity of feedstocks to qualify for sustainable aviation fuel tax credits (SAF). An announcement is expected at the Commodity Classic in Houston. With EPA administrator Regan joining US Sec. of Agriculture Vilsack in Houston, it’s expected that the reconfiguration of the GREET model will help the US ethanol industry. This is supporting corn into Friday.

Brazil soybean basis levels continue to firm, with Paranagua offered at $0.50 under May futures for April. For July, the offer is even with the July futures. The US Gulf is offered 60 over for July so there is still a $0.60/Bu advantage for Brazil soybeans in July, but the spread is narrower than last year. The Brazilian soybean harvest should surpass 50% by early next week, which means the remaining portion of the crop can find its way into the bin with their version of a national farmers association in Brazil telling farmers to hold crops. Another note is that the logistical system across Brazil has been able to truck, store and load soybeans at a far better efficiency than last year, hinting that supply pressures are less which implies a smaller harvest.

PCE inflation data this Thursday analysts expect +2.4% y/y vs +2.6% y/y last month. Softer PCE data would be negative for the Dollar and positive for Ag commodities. USDA Fats & Oils / Grain Crushings is on Friday at 2 pm CT. Analysts expect a January soybean crush of 5.89 MMT vs. last month’s record 6.128 MMT. The next WASDE Report is March 8th. The next FOMC rate decision is March 20th – bond markets are pricing in three rate cuts in 2024 with the first to occur in July.

Cattle futures were lower on Tuesday, with feeder cattle trading mixed. Cash markets are untraded with asking prices at $185-186 in the South, which is up $2-3 from last week and reflective of where February futures are looking to expire. Box beef prices continue to remain firm and should allow packers to pay. Meanwhile, the board is acting hesitantly, with weakness below $186.00 triggering a larger correction. Feeder cattle remain hot with the April board up against the 78% retracement when measured from last year’s high to the December 7 low. Caution is advised at recent high levels.