The grain market is still hungover this morning from excessive USDA supply forecasts.

Corn, soybeans, and wheat are all under pressure this morning as the market digests yesterday’s USDA reports. Corn is bearing the brunt of selling after the agency added another 1.3 million harvested acres (from less corn silage) and nudged the national yield up by half a bushel. That was enough to push production above expectations and weigh heavily on futures. Global corn carryout was also raised, though still kept below the levels of the past two years.

Adding to the confusion, despite the bearish data, the USDA increased its average U.S. cash corn price projection by 10 cents per bushel. That has left some in the trade scratching their heads, wondering how the agency justifies a higher price despite a larger supply.

With the reports behind us, market focus will now shift back to South American weather and export activity. Some parched areas in Brazil and Argentina have picked up rains recently, but large parts of southern Argentina remain dry with limited precipitation in the outlook.

Traders are hopeful that yesterday’s break in prices could spark a new round of export demand. Prior to the report, there were already some strong corn sales on the books, so the idea of continued buying interest isn't far-fetched.

Pres. Trump has announced additional 25% tariffs on any goods traded into or out of Iran as protesters and Islamic leadership fight. So for the protests, the death toll has reached as much as 650, and it’s unknown if US military strikes will follow through against Iran, which are under consideration from the administration over the weekend. Crude oil is over $60.00 again, a level it has not traded at since the start of December. Iran exports 3 million barrels of oil per day. It’s the threat of supply reductions that has firmed oil prices despite what should be a coming oil glut in the first quarter.

After a mostly lower session, live and feeder cattle prices rallied to a higher close on Monday. The cash feeder index climbed $0.66 yesterday and is at $were 368.56. After last week’s steady higher cash trade, the trade is expected to be at least steady money this week. In Kansas, a few loads sold for $233. Box beef prices are again higher, with choice up $1.48 and select up $5.88, putting select at $358.05 compared to choice at $357.11. This is because beef is grading 89.3%, a record high.

Live and feeder cattle are targeting last week’s highs as resistance, with February cattle having that level just under 238.00, while March feeder cattle target resistance in the 359-361 range.