We started off Friday with Export Sales at 7:30 A.M., Baker Hughes Oil & Total Rig Count at 12:00 P.M., Cattle On Feed and Cold Storage at 2:00 P.M.

Trade estimates for today’s February Cattle On Feed report call for January marketing rate of 100% of last year, Placements at 88%, and the Feb 1 Feedlot Inventory expected at 100%. If realized, the placement rate will be the lowest since 2007 and 2^nd lowest since 1996. Weather played a part in placements, but feeder cattle supplies are tight. On feed inventories are likely to be back below a year ago by the 2^nd quarter, which should support CME cattle prices on sharp corrections.

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The bi-weekly Illinois Production Cost Report showedCentral Illinois diesel prices in a range of $3.00-349/gal, with an average price of $3.27. The average was up 16 cents from the previous report, but still $.23/gal less than a year ago. The technicals showed diesel futures fell back to long-term support last May and retested support in late December. Farmgate off road fuel prices are ticking higher, while futures have dipped this week. Seasonally, futures tend to decline March/early April, right around the time the refineries switch to summertime blends, which usually a seasonable low is formed, and tends higher into the 4^th quarter. Basis for farm fuel has strengthened in the last month, but 38 cents over futures, the average basis this week is well below average, and the lowest since 2015.

South American weather forecast remain consistent with earlier forecast while Brazilian pattern needs monitoring. The EU & GFS models agree in projecting the return of heavy rainfall to Central and Northern Argentina into next Monday but reduced intensity of rainfall in Brazil beyond the next 72 hours. Short term threats are absent, and warmth/dryness in Brazil into late Feb will accelerate soybean harvest and safrinha corn planting. The return of regular rainfall will be needed in Northern Brazil in March to sustain oil moisture reserves. The 11-15 day predictions hint at better shower chances in far Northern Brazil but soaking rain is not indicated in key areas of Mato Grosso, Mato Grosso do Sul, and Goias. It’s premature to be concerned about Brazil’s climate, but the pattern becomes worrisome if rain fails to resume by mid-March. Brazilian temperatures warm as soils dry. Word that 500 new sanctions appear not to impact the banks that aid Russia in exporting grain. The impact looks to be negligible on Russian grains. That’s the rumor… Will the sanctions even work?? Stay Tuned…. The grains are chopping around this holiday shortened week and in a down week overall. Traders will be mulling over the geo-political concerns that could effect exports in this already oversold market and weather watching in the prime global growing areas.

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