Corn – Ethanol expected strong today, ARG map drier, funds may have returned as buyers yesterday
↑ Ethanol will be expected strong again today, continuing the trend of strong to very strong reports
↑ Today’s ARG 10 day outlook is drier, a larger story for beans but slightly supportive corn as well
↑ Open interest yesterday was +11K, a sign that after taking 2 days off, fund buying may have returned
↓ Trump announced late in the trading session yesterday he still intends a 25% tax on Canada/Mexico
↔ Exports for corn/beans are far enough ahead pace right now that they can absorb a slowdown from new tariffs and still meet USDA expectations
Beans – ARG turns even drier, China now on holiday, positive export expectations for tomorrow
↑ ARG maps moved even drier this morning with all of ARG now looking at only light 10 day rains
↔ China has started their Lunar New Year so news from them may slow the rest of the week
↑ Expectations for tomorrow’s exports might be higher than usual after last week’s very strong 1493K
↑ Open interest +9K suggests funds may have also returned as buyers of beans yesterday
Wheat – Russian wheat prices moving higher, winter kill threats continue to offer light support
↑ Russian wheat prices have been moving higher lately and may now be doing so long enough that we can assume some light spill over support will be seen here
↑ Winter kill threats also adds consistent light support, expect to see more damage estimates
↔ Supportive news for wheat recently has stopped the downwards move, now looking more sideways
Cattle – BB higher again, futures priced +$8.60 to last week’s cash, feeder index bounce to new highs
↔ Yesterday’s PM BB was choice +2.37 select +1.41 packer BE at 207.78, packer cushion $5.33
↑ BB bounced yesterday and is now making slightly higher new highs
↑ Just like BB, the feeder index was +1.13 and has also moved to new highs
↔ Yesterday’s bounce put futures at +$8.60 over last week’s cash trade, the highest overbought level seen since right before the $30 setback in the Fall of ’23 where cattle reached +$12 over cash
↔ The fundamentals to start this week are strong but with futures +$8.60 to cash, are we actually going to see a +$8 and +$9 cash trade this week?
↔ Some are asking why futures are priced “nowhere near cash” but keep in mind that verbal cash trades are almost all 80% or higher graded choice, the CME futures contract is based on 65% to 80% and last week that higher graded cattle saw $8 higher cash than the 65% to 80% grade