Good afternoon. Ag markets and the commodity space in general were mostly lower to start the new week, as Argentine rainfall over the weekend combined with spillover selling from the macro world led to lower trade throughout Monday's session.

CH closed Monday at 4.82, down 4 and 1/2 cents. CK was down 4 and 1/4 at 4.92 1/4. SH closed at 10.45, down 10 and 3/4. SK finished at 10.58 1/2, down 9 and 3/4. WH was down 8 and 1/2 cents at 5.35 1/2. Products were lower, March soybean meal closed at 300.80, down $4.10/ton, and March soybean oil closed at 45.00, down 22 points. Meal, along with all four of the above mentioned corn and soybean contracts, had gap lower opens to start trading last night, but none of the gaps are open on the charts; bean oil had an inside day lower, and closed some 70 points off its lows. Livestock markets were mixed, February live cattle closed at 205.67, up 90 cents, March feeders closed at 275.25, down $1.32, and February hogs closed at 83.05, up 75 cents. Another day of new highs in the cattle markets. Outside markets are trading mostly lower, crude oil futures are down $1.50-1.60/bbl, the Dow Jones index is up 300 points and the US$ index is down 5-10 points. The S&P500 is down 80 points and the NASDAQ is down 600 points (2.7%); the NASDAQ is currently trading about 550 points off the lows made earlier in the session.

Spreads were mostly lower to start the week, corn spreads traded unchanged to a penny and 3/4 lower on the day, and soybean spreads were down a half cent to down 5 cents. CH/CK closed at -10 1/4, down a quarter of a cent, and SH/SK closed at -13 1/2, down a penny. WH/WK did not make new contract lows today, and had an inside day before closing at -14 1/4.

USDA this morning announced that private exporters reported 139,000 mt's of corn for delivery to Mexico during the 2024/25 marketing year. Of note, this is the first corn sale explicitly to Mexico (not unknown) since December 17th.

Other demand news on Monday included the regular weekly export inspection report for the week ending January 23rd, which showed a decent week of grain inspections compared to trade expectations, but a subpar week for the soybeans. Corn inspections in the week totaled 1.247 mmt's (-19% from last week), soybean inspections totaled 729k mt's (-26% on the week), and wheat inspections totaled 485k mt's, (+85% on the week). Cumulative corn inspections have now reached 20.497 mmt's (+31% from last year), soybean inspections have reached 33.034 mmt's (+19%), and wheat inspections have reached 13.764 mmt's (+25%).

As considerable weather premium has been added to corn and soybean prices in recent weeks, the market will need to see evidence that further losses in production above what have already been priced in are possible in order to get the rally to new highs based on supply alone. It is thought that 1-2 mmt's of both corn and soybean production have been trimmed in Argentina, but sources on the ground there say the situation is more local than not and that with normal rains the rest of the way, crops should still be able to achieve good yields. Remember, USDA currently pegs combined 2024/25 soybean production between Argentina, Brazil and Paraguay at 232 mmt's, compared to 212 mmt's last year. Similarly for corn, combined production between Argentina and Brazil is estimated at 178 mmt's currently, compared to a crop of just 172 mmt's last year. The point is that, especially in soybeans, a small decline in production from current estimates is still going to equate to a combined total that is well up from last year.

Otherwise, there simply wasn't a lot new through the day on Monday to add to existing narratives or create new ones. The brief trade debacle with Colombia over the weekend illustrates the power Trump wields with his social media posts, as threats of 25% duties penned to his Truth Social platform on all goods from the Latin American country that would increase to 50% after just one week quickly led to a concession on migrant issues that had brought about the threats in the first place. Legend on the web has it that Trump heard about the issue while playing golf in Florida, picked up his phone, and had a concession secured in the matter of time it took to a play a few holes, but we can find no confirmation of this as of this writing. Whether true or not, the story shows a stark contrast to the way business was handled over the last four years during the Biden administration, and perhaps offers a glimpse into how business may more likely be handled over the next four years.

South America continues to dominate the bulk of the weather headlines, as rains in Argentina over the weekend were point number 1 in nearly all market analyst's Monday morning commentary this morning. Additional moisture is expected for areas in the central and northern parts of the country over the next week or so, but areas to the south look to stay on the dry side. Models at mid-day added moisture to these dry areas south and east of Buenos Aires in the week two period, which will be watched for in coming days to see if it can make it to the short-term; should current forecasts verify, this rain will be a necessity by the middle of February. Brazil's forecast continues to show average to above average rains through most of the country's growing regions for another week, before monsoon moisture is seen abating just a bit into the second week of February. The monsoon appears to have been about two weeks late showing up last fall and looks to be about the same two weeks late making its exit this spring. The next 2-4 weeks of Brazil weather will be critical for safrinha corn planting prospects.

Not a lot new to speak of in terms of US weather coming out of the weekend; model features through this week still look to include a cut-off low making its way through the southern tier of the country from west to east, pulling in moisture from the Gulf once it gets there, while upper level air flow will keep the areas around the Great Lakes and into the northeast active for at least another 5 days. Temperatures will otherwise be the biggest story this week, as parts of the upper Midwest are expected to see highs that are some 20-25 degrees F above average just days after seeing pretty much the exact opposite temp profile last week. Models today show this warmth generally hanging around through at least the 11th of February, with cold air in the period confined mostly to Canada and the far northern parts of Montana/North Dakota. Week two precip maps are unchanged from the end of last week and remain in fair agreement in showing above average moisture outlooks for almost the whole of the country besides the far southwest into Mexico through February 11th.