Cargill gains headlines on the soybean rally overnight.

The grain trade when into the fall recovery mode overnight, led by soybeans. News surfaced yesterday afternoon and reignited what had becoming a problem over the past weekend. Brazilian soybean exports to China are encountering delays after the Brazilian Ministry of Agriculture introduced stricter phytosanitary inspections at China’s request. Instead of relying on the standard samples provided by exporters, officials are now conducting their own sampling, which has created inconsistencies between inspection results and shipment documentation. The rules are issuing for new comprehensive checks on weed seeds and pass in their getting differing results.

Those discrepancies have prevented some phytosanitary certificates from being issued. Without the certificates, vessels cannot unload cargo in China. As a result, a number of ships originally headed for Chinese ports have reportedly been redirected elsewhere. If the issue is not resolved soon, it could significantly slow, or temporarily halt, soybean shipments from Brazil to China.

Several governments are signaling that higher renewable fuel blending rates could be one way to ease pressure on gasoline and diesel prices. That discussion is gaining urgency as surging energy markets push fertilizer prices sharply higher, enough to become a mainstream political and economic story rather than just an agricultural one. The same move in energy is also hitting consumers directly, with household budgets beginning to feel the strain just as the US enters the early phase of the driving season.

That timing matters. Seasonal demand is about to pick up, and the market is facing it with fuel costs already elevated. Even in a best-case scenario where the war ended immediately, crude supplies from the Persian Gulf would still need roughly 90 days before flows could normalize. Until that happens, the pressure on refined products is not likely to ease in a meaningful way. In practical terms, that means gasoline prices are expected to remain firm until well beyond that window.

The Strait of Hormuz remains closed and is keeping energy values elevated along with concerns over getting fertilizer out of the Persian Gulf and onto Brazil for corn planting for the latter portion of the Safrina crop. This also includes US production needs for some that have not been secured yet. Sales and delivery of fertilizer last fall was slower than normal given farming economics.

Yesterday’s cattle futures trading resumed downward trends, with feeder cattle pushing a new low for the week before a moderate short covering bounce into the close. Liquidation continues in the cattle futures while cash cattle sales also are starting to soften. Cash feeder index was off $0.97 yesterday and is now at $364.80. Cash trade was lower yesterday with some sales in Kansas off $5 at $235. There was also live trade in the South that was $3-5 lower at $235-236. Northern dressed sales were off at $372.

Boxed beef prices were higher on reduced kill with choice gaining yesterday $2.03, getting ever so close to 400 while the select also picked up $2.48. With 19 days to go, the feeder index is abnormally wide from the March contract cash index settlement that will need to occur. With the $16 difference, the board is assuming a hard break at the sale barns, or could see a possibility of the two converging by settlement. For now the board is in a very weakened state with technical selling causing index funds to leave their long positions