Grain and soybean futures consolidated overnight and again pushed higher this morning.

The grain trade is mostly higher across the board this morning, with Chicago wheat playing catch-up on the wheat spread. Yesterday’s strong gains in wheat and soybeans were consolidated overnight, and further strength is developing today. This is frustrating the bears who thought they would own this week, as the Farm Ag Outlook forum, put on by the USDA, is usually full of price-negative surprises. This morning we are seeing new price highs for the week on soybeans and again wheat. Even a friendly 94 million-acre revelation with a 183 BPA that would lower the carryout this year didn’t make the corn market flinch yesterday, but this morning, we are seeing minor strength. Now we will see if the sunrise selling vigilantes will arrive too pushback on overnight gains.

Yesterday’s revelation that corn acreage would be down nearly 5 million from last year and a million below trade estimates is creating a buzz. What stood out was the total corn production, which came in at 15.76 Bil Bu. This was 600 Mil Bu below this year’s projected corn demand. If accurate, either corn rationing will need to take place, or the stocks to use may tighten to a rationing level.

The near steady soybean carryout estimate was also worth noting, as the market will absorb 4 million more acres of production. This sets up the US growing season that has to have a favorable production year. There is no room for large regional issues. This means that weather spike rallies have a decent chance of occurring, creating sales opportunities.

Heavy rains are occurring in central Brazil, hampering harvest and creating additional quality issues, and, most importantly, delaying safrinha corn planting. On the flip side, the dry areas in Argentina are starting to see reasonable rains, but the trade never really priced in the dryness that was producing multi-week crop deterioration reports.

It was a mixed, consolidating session again yesterday, as the cattle trade awaits the February Cattle on Feed report. Estimates have on-feed just under 99%, placements at 96.7%, while marketings are expected to come in near 87%. Yesterday’s cash feeder index picked up another $0.90 and is now at a record high of $376.92, while the feeder board chooses to remain at a discount of $6.00. Scared of its own shadow, as the cattle futures trade continues to climb a wall of worry.

Box beef values yesterday had choice picking up $1.37 while select drifted $0.84 and is now off on the week by $3.00+. Packer participation in the negotiated trade will find more blood if they choose to pay up on the week. Steady looks to be their goal at best. If cattle hold their gains today, it’ll be another higher weekly close as the market grinds to the upside. 244-245 is April cattle resistance, while April feeders have to stare down 370-371 as an area that gets challenged, but can they hold when they pop into it? Downside support for April cattle is 238-239, with April feeder cattle finding important support at 362-363.