Markets are closed Monday, bringing about profit-taking from a strong week in grains.

It’s been a very good week for grains, so profit-taking kicked in overnight, is not a surprise with a long weekend ahead, farmers are selling on this week’s rally, given it's February, not a surprise there either. Markets will be closed on Monday for Presidents’ Day, with electronic trading reopening Monday night at 7:00 p.m. CT.

After rallying this week on the hopes of renewed Chinese interest in our agricultural products, the WASDE data is now becoming long forgotten. Many question the USDA's carryout numbers, which are expected to decline in the months ahead. As of now, US corn sales are at 75% of what the USDA says we will sell through September 1, and we still have half a marketing year left to get through. They still likely have demand under-estimated. Meanwhile, China is increasing its purchases of US sorghum, having taken 2.5 MMT in the past three months.

Movement of Black Sea wheat is becoming difficult. Ukraine has seen its grain movement down by 18.4% compared to last year. The January report deliveries are only at 2.4 MMTs. Meanwhile, Russian port deliveries are down 3 MMTs, and Russian Sea route movement is off 8%.

The weather in South America continues to leave parts of southern Argentina without forecasted rainfall. Again this week, the Argentine soybean crop ratings declined, with now good to excellent at 32%. This is now the sixth week of rating declines, making it difficult to give the USDA production guesses credibility. Also, quality is becoming a concern for the soybean crop in the north, with rainfall being excessive. Some areas are rejecting deliveries, as they already have too much to blend.

Live cattle futures struggled yesterday, as news that Cargill was closing its Wisconsin beef plant weighed on live cattle during the day, dragging feeders with it. Late session buying arrived as feeder cattle held major moving averages. The cash feeder index slipped $0.49 but still remains a premium of almost 9 dollars to the March contract. Negotiated fed trade will occur today, but asking prices in Texas are $245-247, which implies they want a gain over last week and well above the February contract.

After seeing heavy weights in early January, the cold weather in January has trimmed weights a bit. Slaughter data released yesterday showed the average carcass weight is now 981 pounds, down from 989 pounds at the start of the year. Gains are still prevalent over last year at this time, as carcasses are still waiting, 29 pounds heavier than last year’s record weights, which we thought were large. Futures trading continues to remain range-bound. April cattle have resistance at 241-241.50 with 244-245 being significant. March feeder cattle held support at 63.35 yesterday and need to do that again today. Closing below that level raises a warning flag, with 360 as critical support that cannot be closed under. Meanwhile, 370-373 remains an area the feeders avoid and do not stay in for long.