Rain in Argentina and Southern Brazil have the market lower to start the week. Corn is currently down 10 and soybeans are down 20. More rain is in the forecast as the weather has shifted to wetter for the end of January and the beginning of February. Rain totals over the weekend totaled .70-3.5 inches in Argentina. Coverage was 80% and more is on the way. Midweek another storm system is expected to produce .5-2.5 inch of rain this week. Northern Brazil and Central Brazil will see normal rain in the next two week. Temps are hot in Argentina in the 90’s to 100’s but are expected to cool off in the next week. The long-term forecast is moving to cooler and wetter. The forecast has shifted to bearish.
Friday afternoon’s USDA Cattle on Feed Report showed all U.S. cattle on feed as of January 1 at 11.682 million head, or 97.1% of last year, above the average trade estimate of 96.8%. December cattle placements came in at 92.0% of last year, above the 91.0% guess, with December marketing’s at 93.9% of last year, below the estimated at 94.7% figure.
The rally we saw following the USDA report has come and gone as we are now trading favorable weather. The markets are currently headed lower with favorable South American weather and China on New Year holiday break. The funds have been buyers recently, so the downside is elevated. I look for lower trade this week and into the first of February as we don’t have much bullish news to focus on.
Have a Safe Day!