The morning grain trade is higher from a firm overnight.

This morning’s grain trade is higher as overnight soybeans pushed through last week’s high and the 50-day MA before retreating moderately into the morning. Meanwhile, corn stalled at its important 445 resistance, with May Chicago wheat trying to press through 550-553. These key areas will be watched for this morning to see if the short covering that is getting underway will continue into next week's Thursday’s Stocks and Acreage report. There are only five trading days until the release of that report on Thursday, March 28.

Yesterday, Fed Chairman Powell’s comments were deemed more dovish than investors expected, resulting in the Dollar declining and a macro rally (S&P into all-time highs). The FOMC left interest rates unchanged at the March meeting but confirmed they expect three rate cuts (-75 bps) in 2024. They raised the GDP forecast from +1.4% to +2.1%.

According to an Argentine local weather expert, heavy rains forecast over key grain regions of the country could be “very damaging” to corn and soybean crops. The flooding has produced crop quality and potential yield damage. In 2016, ongoing rain caused acute flooding and sizable crop losses across NE Argentina. The 2016 wetness lasted for over a month, from mid-March into mid-April.

Today’s trade in the grain markets will be expectant on the reaction of May corn at 442-445 and Chicago wheat at 551-553 as we head for Friday settlements. Breaching those values on a closing basis prompts technical short covering from index funds. If soybeans close above 1220 today, they could be on the way to the 100-day MA at 1247-1250.

In South America, near to above-normal rain is forecast across the northern half of Brazil with ten-day totals of 3-8.00”. The forecast models no longer offer heavy rain for southern Brazil, while the Argentine forecast has gone starkly drier. Low to much below normal rain is forecast for Argentina and S Brazil with 10-day totals of .50-2.00”. The coming and Brazil rains will ease concern regarding soil moisture availability. Extreme heat continues in Paraguay/Mato Grosso do Sul, but temperatures are near to below normal elsewhere. Adequate Argentine soil moisture allows the maturing crop to make its finish line in good condition.

Live and feeder cattle futures slipped lower yesterday with the weaker outlook for this morning starting trade. Both markets held in very tight ranges throughout the session, with supply and demand feeling equally balanced. Cash markets were quiet, with a few pens in Kansas trading on Packers opened bids of $186, which was steady with a week ago. However, most were asking $188-190 for a show list in the South, which would be $2-4 higher for the week. Offers in the north were quoted at $2-3 higher at $190 live while also seeing dressed basis offered at $305, which would be up $7.

The midweek cattle slaughter is reported at 116,000 head, down 2000 from last week and 11,000 head lower than a year ago. Again, the Packers continued to limit slaughter rates and back up cattle. Yesterday, choice beef picked up $0.22, while select was off $0.47.