Consolidating trade of this week's chaos is the order of the day.

It has been quite a week, yet after all the chaos since last week Friday, this morning crude oil shows a gain on the week of $2.00, corn is near steady (new crop is a few pennies higher yet), wheat is softer, while soybeans hold gains of over $0.15. That gain on the week, as of this morning for soybeans, reflects a loss of nine cents overnight.

Releases from the strategic reserves through the G-7 is a short-term solution to a larger problem. The Strait of Hormuz still remains mostly closed. It’s been estimated roughly 5 Mil barrels of crude oil have exited under Iranian or Chinese flagships this week when typically 100 Mil barrels would move. Depleting strategic reserves for a month is one thing, but what happens when those reserves start to get reduced, and Saudi oil production is only beefed up by just over 1 Mil barrels. Russia is now being allowed to at least sell all its floating oil, and next thing you know sanctions on Russian oil will get dropped in order to keep crude oil from again pushing back over 100 when demand destruction will be needed if the Strait is not reopened.

Fertilizer concerns for this upcoming year is something that traders are not capable of quantifying, as they have no historical data on how to account for trendline yields to be affected. The Safina corn crop in Brazil that is already delayed getting planted will experience fertilizer shortages for the last 25% of planting. In the US there will likely be spot fertilizer shortages for farmers that had not procured lower values last fall and have on farm storage. Your area costs have increased by $15/acre, already pressuring farmers that are having cash flow problems.

This week’s action was on the oil price rally and the Strait of Hormuz. Next week will be action for the upcoming US/Chinese summit at the end of the month where now it’s been reported that Secretary of State Marco Rubio will also be joining. Look for China to do appeasement buying next week or the following week of not only soybeans, but potentially corn to give the appearance of being a good boy and doing what it has said it would do without a signed contract. This will be supportive, and provide support against major price declines that would like to get underway from the bearish traders who say demand is softening after the recent rally over last two weeks is unsustainable.

Finally on grains, CONAB released their monthly crop report, and they put corn production at 138.27 MMTs, recall last year was 141.16 MMTs. Soybean production is 177.85 versus last year’s 171.48 MMTs. The numbers are close to expectations on the data. But note, nothing close to what the super Bears were talking about in January about a 182-184 MMT soybean crop.

Cattle futures have been lower this week, but yesterday, a foothold of support developed as early week levels were being challenged. With outside markets stabilized heading into to the last trading day of the week, cattle futures are anticipated open steady/better this morning. Yesterday’s feeder cattle index is at $360.97 which was off almost 4 dollars from Wednesday, and we are now digging into values not seen since January. Meanwhile boxed beef values were again higher as packers restrict kills order to cut losses. Consumer demand is rumored to be softening, but rumors don’t necessarily pay the bills. So, off take next week will be scrutinized.

Cash cattle trade this week has seen the northern dressed trade off $8 and traded mostly at $372. In the South most the business has been done near $235. Texas was $4 lower while Kansas was off $5. On Thursday a few deals were reportedly traded at $236.

On the futures market, if a recovery bounce is in the makings, it will be a retracement rally. April live cattle will encounter heavy resistance in the 234-236 range. April feeder cattle have heavy resistance at 351-352 with extreme resistance at the 20-day MA at 357-358. Yesterday’s lows are important support with 228-229 the value that April cattle need to hold, to slow liquidation selling. Meanwhile April feeder cattle need to maintain 339-341 to stop another technical watershed.