China and South America are on holiday, trading volume is thin.

The grain trade is soft this morning with soybean oil having recovered to a higher price, supporting beans. China is on holiday today as their celebration of the Lunar New year, while South America celebrates Fat Tuesday. Trading interest was low-volume overnight as we get the week started after the three-day weekend.

After last week’s strength, the Doubting Thomas's are back, not anticipating any Chinese bean sales until possibly late March ahead of Pres. Trump’s visit to China. The trade continues to ignore strong export pace for seeing in corn where year to date sales are 73% of what the USDA has estimated to September 1. In many are saying USDA estimates for exports may not be quite attainable. This requires corn sales to fall off dramatically compared to what we currently are seeing a weekly basis. Also, the current corn/soybean ratio is 2.4:1. This favor soybeans for planting, but farmers still loved talk corn.

While harvesting of soybeans in South America along with getting corn planting started is easy concerns, some analysts continue to walk back Argentine crop estimates on the soybeans and corn there.  Argentina’s soybean crop is now just 32% Good/Excellent, and an equal share in rated Poor/Very Poor bringing into question production estimates. Argentina’s corn is 43% G/E, also down from recent readings. Brazil’s seeing better stands, but stress is noted in that country as well, mainly in Mato Grasso soybeans. Heavy rain is reducing the quality of some beans are getting rejected because some receiving points are already maxed out from blending capabilities.

After last week’s big wheat rally, Chicago wheat suffered the biggest selling last night on spreads. Still wheat sales are strong and year-to-date at 820 Mil Bu compared to last year’s sales of 703 Mil Bu. We are running 92% of the yearly forecast which ends June 1. Index funds are still short 86,000 contracts of Chicago through last Tuesday and 19,000 and Kansas City. It is likely Wednesday through Friday last week lowered that number quite a bit with the record volume trade that was seen Thursday into Friday.

Grain exports out of Ukraine have been difficult with Russia continuing to attack Odessa support. Compared to last year exports are down by half. This season they have only exported 8.5 MMTs of wheat and 10.4 MMTs of corn.

The markets are also awaiting to see if the US Supreme Court rules on Pres. Trump’s legality on his IEEPA tariffs as soon as this Friday. This may create some volatility, but Pres. Trump has other means to maintain his tariffs.

Cattle futures continued volatility as we are at the higher price levels since the fall recovery, with live cattle closing higher and feeder cattle holding onto mixed closes. Last week’s negotiated cattle trade develop after the close with the north up $5 at $245 with live sales in the south up $4 at $247-248. Record prices were set in Kansas and Texas and maintaining their premiums to the north due to lack of Mexican feeder cattle. Packers continued to be pinched into the red with last week’s box beef prices lower as choice gave up $4.86 and select was down $2.19.

April live cattle futures continued pinball around 240, which is developing quite the sizable call and put open interest. Interestingly, 250 is the conversation to the upside for bulls while 232 maintains support. This means sloppy wide trading range activity can play traders out as the market tries to price in a top. Feeder cattle are similarly toying with major support on the April contract at 360-363, with resistance significant at 371-374 with the Feeder index near 374 . April feeder cattle need to rally today to keep from triggering technical sell flash signals on the continuation chart. Index funds are long 108,000 live cattle and 16,000 feeder cattle.