Argentina lowers export taxes.

The grain trade opened lower Thursday night on the news that Argentina was dropping its grain and oilseed export taxes starting Monday and carrying through June. The bulk of the weakness in the night trading range was developed in the first 15 minutes of the session. Argentina announced that they will lower their export tax on soybeans from 33% to 26%, soymeal/soy oil from 31% to 24.5%, while corn/wheat will decline from 12% to 9.5%.

Despite the negative news story, corn and soybeans are still trading higher on the four-day week, even with chances of rain developing in southern Argentina in the forecast for tonight of .15-1.00″. The trade still has funds adding to corn and soybeans on weakness, setting up an interesting last week of trading for January as we head into the February revenue insurance price averaging. The overnight grain trade losses could have accelerated after the opening but did not, as concerns remain on the outcome of corn from the safrinha and Argentine crops along with southern Argentina sustaining low crop ratings with minimal rain still occurring.

A bipartisan bill was introduced into the US House of Representatives to end China’s permanent normal trade status late Thursday. If enacted, this bill would produce a new minimum US tariff rate of 35% on all Chinese imports, which strategically has import duties of up to 100% on tariffs on some products. The bill also strengthens the CCC, which could return tariff dollars to farmers or use it for funding direct commodity purchases. In late 2024, FL Sen. Rubio offered a similar bill but failed without democratic support. This bill is expected to pass Sen. Tom Cotton of AR, offering a similar version. China will no longer have a favorite US trade status by March/April.

Northern Brazil is anticipated to enter a 10-day drying trend, while heavy rains will be centered on eastern and southern Brazil, where crop development is still occurring. RGDS in Southern Brazil received .5-2.00″ of rain overnight, helping to end drought concerns there. Seasonal temps will prevail across Brazil and the northern half of Argentina, with highs in the 80s and 90s. Any mid to upper 90s will be located over S Argentina, where crop development has been seeing dry and hot weather. Currently, a high-pressure Ridge is retrograding West into E Brazil, which should shunt tropical upper-air moisture to the south. This is why Argentine and southern Brazilian weather forecasts are seeing rain and it into them in the 6-10 day window.

Live and feeder cattle futures had another higher trading day on Thursday, with a firm outlook for this morning. Fairbury cattle picked up $1 to a new record high over 200, while April cattle also closed above the magical $200 mark. Feeder cattle futures are all setting new historical highs, with the cash index off $0.63 at $277.55. January feeder has closed the gap to cash with expiration next week. Light cash trade occurred Thursday at steady prices, with live trade in the South at $302-202, while dressed sales in the North were steady at $ 322.

The January Livestock Slaughter report showed commercial cattle slaughter in December was off 2% from last year, while the average carcass weight was 22 pounds heavier than a year ago. Beef production was fractionally above last year but below the 5-year average in December. Annual production in 2023 was at a 5-year low, and 2024 beef production was fractionally above 2023 as the industry offset fewer numbers with the heavy carcass weights.