Grain markets are softening as calm returns to the energy markets.

Grain futures are softening across the board this morning as the crude oil market, though elevated, is showing a sense of calm. A conversation late yesterday from the administration is that they are considering insuring and escorting vehicles through the Straits of Hormuz, which has taken the edge off the grain market. This keeps the market under our stated 82.00-84.00 for crude oil, as in yesterday’s video.

Aside from the developments surrounding the conflict with Iran, the market continues to track many of the same underlying fundamentals. South American crop scouts believe output in both Brazil and Argentina may be revised slightly lower, though total production is still expected to reach record levels. The larger question now is whether expanding domestic demand will limit export availability, even with bigger crops. That possibility is gaining attention in Brazil as the country continues to expand soybean-crushing capacity and to increase corn use for ethanol production.

Brazilian farmers have also seen sales pick up recently, encouraged by the strength of the U.S. dollar. Aside from that, new headlines remain limited for now, though the calendar will soon provide more direction. The monthly WASDE report is scheduled for release in a week, followed by the closely watched planting intentions and quarterly stocks reports on the 31^st.

Input costs are also entering the conversation. Urea prices have jumped roughly $80 over the past week, a move that is likely influencing planting decisions, particularly on acres that have not yet been committed to a specific crop. This has helped new-crop corn and soybeans find a little firmer footing as the overall grain trade softens from the early-week high.

Yesterday, live and feeder cattle futures experienced another sharply lower opening with a recovery later into the session. This has mirrored the stock index trading. This morning, stock indexes are moderately higher, so if the firm starts, the cattle trade could get underway. Meanwhile, yesterday the cash feeder index fell $2.23 and is now at $369.59. The one-day index was just above $360. The futures board led the weakness; now the cash index will affect the board's psychology. Currently, April feeders are still carrying a considerable discount to the index, just under 60 days ago.

Other than a some small cash trade that occurred Monday afternoon in the South at $238, the negotiated fed cattle trade is now mostly quiet. Box beef was again higher on Tuesday, with choice gaining $6.71 and now at $388.05; select showed a $0.37 gain and is at $370.58. But it jumped over $3.00 on Monday. Technical numbers to watch for are as follows: as the cattle market recovers, significant resistance for the April contract lies at 237.50-238.00, while June live cattle have resistance at 233.50-234.50. April feeder cattle will face significant resistance at 357-358, then major resistance at 362.50-364. Those are all selling ranges for recovery lifts.