Soybeans rally as Bungee stops deliveries.

This morning’s grain trade is the reverse of what we have seen this week, with soybeans strong while corn is mixed, and wheat softens following French milling wheat, which is weaker on Russian FOB offers. Soybeans are firm as Bungee stopped deliverable soybean receipts and has now put the spot contract in strong hands. The first notice day process should be behind us.

Ag Sec Vilsack and the EPA Administrator Regan will headline the news today at the Commodity Classic Conference in Houston. Today is the administration's deadline for announcing the GREET SAF biofuel model update. The GREET model is used to determine the eligibility of ag feedstocks in the production of Sustainable Aviation Fuel (SAF). Their comments will be followed closely today.

Brazilian crop data continues to come in disappointing in Mato Grosso do Sul and Sao Paulo, where producers report harvests are down 10-17% from last year. Exporters and crushers are unable to pry away more than 10-14 days of supplies from the farmers. Brazilian farmers have been less engaged in cash market sales as yield and prices have slid. The Brazilian harvest should be past 50% complete early next week.

Crop insurance prices set yesterday: corn $4.66, down -$1.25 from last year, soybeans $11.55, down -$2.21 from last year.

USDA Fats & Oils / Grain Crushings 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.

In South America, a wide swath of below-normal rain is forecasted for the northern half of Brazil, while Argentina will have showers on Friday/Saturday of .25-1.25” of rain before 7-8 days of dry weather follows there. Weather models show the potential return of rain in the 11-15 day window. The southern half of Argentina will be drier than the north. With a lack of heat, the way for crop conditions in yields right now is modest, but better finishing rains would be welcome. The crop concern is growing in northern Brazil, where soil moisture is on the decline, and temperatures will hold in the 90s amid abundant sunshine.

Live and feeder cattle prices were lower again for the second day in a row yesterday, and if recent history holds, buying typically materializes the morning after two days with the declines. If it fails to occur today, then something bigger of concern for a high could be setting in place in the near term. February cattle expired yesterday at a record high of $184 versus $167.50 last year. Feeder cattle remained under pressure yesterday from the weaker live cattle prices and firming corn values as the feeder cattle market has been on fire.

Yesterday’s cash trade had live prices in all regions steady with last week at $183, and dressed sales in the north were $2 lower at $290. Box beef continued to advance, with choice picking up $1.17 to $304.20 while select was higher by $1.24 to $294.18. The choice value has been above $300 all week. Live and feeder cattle prices tagged moving average support yesterday on the April contracts, and failure to advance today, with more importantly, a close below yesterday’s lows, would imply near-term highs are in place and a correction is occurring into the early part of March.