The grain trade has mixed price action overnight after yesterday's WASDE crop report.

We have a mixed trade this morning as the market has already put the February WASDE behind it, with little difficulty. The report delivered nothing unexpected and generated minimal follow through. On the domestic balance sheet, USDA adjusted corn exports higher by 100 million bushels and trimmed wheat milling demand by 5 million. Soybean tables were left untouched, even as export interest continues to improve.

USDA also suggested that any additional Chinese soybean purchases would simply displace sales to other destinations, leaving the overall U.S. balance sheet unchanged. While that outcome is possible, the assumption that all other buyers can seamlessly replace U.S. supplies elsewhere is far from certain, and the trade has largely dismissed the comment.

On the global side, USDA raised Brazil’s soybean crop by 2 million metric tons to 180 mmt, a figure that aligns closely with most private estimates. Argentine production was left unchanged, despite mounting evidence of stress and declining crop condition ratings. At this point, markets appear largely desensitized to rating data, regardless of origin.

With the report absorbed, attention has shifted back to more dynamic inputs. South American weather trends, harvest progress, and real-time demand signals are now driving price discovery. Looking ahead, U.S. Spring weather will increasingly work its way into the market narrative as planting season draws closer.

The US dollar has bounced moderately this morning by $0.33 and is now at 97.00 after non-farm payroll employment was reported to jump by 130,000 jobs in January after rising by a downwardly revised 48,000 jobs in December. Economists had expected employment to climb by 70,000 jobs compared to the addition of 50,000 jobs originally reported for the previous month. The report also said the unemployment rate edged down to 4.3 percent in January from 4.4 percent in December, despite economists' expectations that it would remain unchanged.

Even though there is ongoing discussion about the size of the South American crop, southern Argentina remains dry, while the rest of the country remains hot. This will continue to produce lower Argentine crop ratings. It seems the perma-bears continue to ignore reality and live on the hope of 6-10 day rain forecasts. The current forecast for next week again indicates that 86% of Argentina's corn will receive rain.

Cattle futures moved lower yesterday, as box beef values are not moving higher. The packers will push back against feedyards seeking to capture steady-higher prices this week as their weights drift. The feeder index was off $0.83 yesterday and is now at $373.83. Softness on the board yesterday could be attributed to index funds exiting length, as the market upside on the board may appear limited in their ability to move money elsewhere. This does not mean the market is necessarily in trouble; it simply indicates that when strength should accompany the futures market relative to cash, the board finds index fund selling. Friday’s Commitment of Traders report should reflect this in declining numbers by fund ownership.

Yesterday also experienced data for live cattle in the February WASDE numbers. The USDA reports that the first two quarters of the year average cattle prices should be near $238. They also estimated the fourth quarter average at $245, with December futures currently trading at $232. On the charts today, April cattle will deal with resistance at 240 and support at 232. Meanwhile, March feeder cattle need to have strength today and keep from closing below 363. The true line in the sand for March feeder cattle is that a weekly close below 360 would be bearish and break the technical uptrend. Daily resistance appears near 370.