Winter wheat values are challenging annual and 60-day highs.

Grain futures are mixed this morning with wheat showing gains as corn and soybeans drift slightly from this past week’s lift. Wheat futures are following French milling wheat higher which is making new 2-month high. This is pulling US winter wheat values in a similar scenario, at annual highs and 60-day highs as well.

Strength in wheat is coming from large swaths of Russian winter wheat that has no snow cover and is anticipating 4 nights of much below normal temperatures, with some temperatures averaging near zero. Winter wheat was designed for the winter, but dryness and bitter cold temperatures has concerns that production will be harmed. (Index funds are likely deciding to not hold wheat shorts anymore, as they have not been profitable since last fall).

The outside markets are seeing incredible pressure in the metals, as it appears there will be no government shutdown, as the Senate last night is forwarding a bill that the house will sign when the return on Monday that includes a temporary 2-week funding deal for DHS which has been a sticking point. Gold has been down as much as 300+ dollars announce with silver having tumbled back below 100, being down $16.00 an ounce.

Outside pressure is also coming from Pres. Trump announcing that his next head of the Fed will be Kevin Warsh. The market perceives him as more of a centrist rather than a hawk or a dove for interest rates, so indexes are all lower this morning along with the metals deflating some of their spectacular gains.
Soybeans are seeing moderate pressure from the Brazilian harvest picking up but there has been delays in exports due to the backup of getting grain to ports. The large harvest is still being conducted.

Argentine crop ratings continue to decline with the good/excellent category having declined over 20% in the last few weeks. Rain must arrive early next week, are the grain trade will start conducting loss analysis on the soybean crop. Losses in Argentina support soybean meal on the US board, as it is primarily how Argentina exports its crop.

The cattle trade yesterday was mixed to lower with live cattle struggling as boxed beef values our weakening while feeders traded mostly sideways in action but still softer on the close. The cash feeder index gained another $2.70 and is at $366.69 with the feeder index settling out today. Boxed beef had seen choice off $2.08 while select gave up $2.85. This is not encouraging the negotiated trade to be higher this week, but in fact steady weaker. This is causing April cattle to struggle again just under 240.

After the close today is the Annual Inventory Report, a small decline of .3% of the cattle herd is expected, with an uptick in replacements of around 1%. Feeder cattle have critical support now at 360 on the March contract, that if closed below by more than two sessions would indicate trouble for the market. April live cattle are fenced in for the time being at 240 the topside and 232 on the bottom side.