U.S. soybean crush for the month of February totaled 214 million bu which was in line with trade estimates. This compared to the 228 mbu in January and 190 mbu in February 2025. Three fewer days and slowed operations during cold snaps were the primary cause of the reduced crush. February soy oil production totaled 2.48 billion pounds, 6 percent less than in January but 10 percent more than in February 2025. End of February soy oil reserves were 2.6 billion pounds, matching trade guesses but well above the 1.9 billion pounds a year ago. Meal stocks were 418,594 tons, up from last year’s 404,769 tons.

Corn grind for ethanol was also down in February for the same reasons soybean crush was. Corn grind totaled 425 mbu in the month, 8 percent less than January but a 1 percent increase from February 2025. Dried distiller grain production in the month was 1.63 million tons, down 8 percent from January but a 4 percent increase from last February.

High input costs have been a topic in the market for the past few weeks, and this is not just a U.S. issue. Australia has joined the list of grain producing countries to state farmers would be opting for crops that require less fertilizer demand. Sources in Australia claim farmers will seed more small grain crops such as barley rather than canola or wheat. Not only is price a deterrent on fertilizer demand, but so is availability with shortages reported of both fertilizer and some seed varieties, specifically for corn. Some Australian farmers have indicated they will leave fields unplanted this year if costs continue to rise, although this is unlikely to be widespread.

Not only are rising input costs going to be a factor in this year’s global grain production, but so are rising fuel costs. Retail diesel fuel rallied $1.73 a gallon in March following the start of the U.S./Iran war. This added cost will likely limit farmer tillage to only necessary needs and may impact crop protection applications. Rising diesel costs are also starting to impact commodity movement, with importers now shopping markets with not just cheap commodities, but those with lower shipping costs as well.

The attaché in China has revised its 2026/27 import estimates. The attaché is looking for soybean imports of 108 million metric tons, an increase of 2 mmt from the 2025/26 year. China’s 26/27 corn imports are expected to hold steady from last year at 8 mmt. Sorghum imports are expected to see a slight increase to 8 mmt. What is more important is where these imports originate from, and if the U.S. can regain some of its lost market share, especially on soybeans.

While much of the attention in the U.S. livestock complex has been on tight cattle lot and live hog numbers, supplies of beef and pork are more concerning. The current U.S. beef supply is at a 12-year-low as years of herd reductions due to drought and a lack of imports have cut stocks. The pork supply is even tighter, falling to its lowest level since 1997 when massive culling followed the $5 hog debacle. Given current U.S. hog and cattle inventories it may take years for red meat supplies to be rebuilt.

The livestock complex has become just as headline driven as all other markets and this is causing unexpected moves, mainly in cattle. Economic news has been the greatest source of this influence, as rising retail beef and gasoline costs are starting to shift consumer demand patterns. Retail data for the month of February was positive, but this support comes with questions, as does the outlook for beef demand for this coming grilling season. Transportation costs are rising and these will elevate retail beef costs even more.

The United States may be closer to reopening the Mexican border for live animal imports. There is little doubt that once this happens, we will see much cheaper replacements enter the U.S. It is not out of the question we could see heavier cattle come over as well as Mexico has been feeding these replacements domestically. The market has heard this before though and wants confirmation before exiting long feeder cattle positions.

There is a building concern in the U.S. Plains that is impacting the entire U.S. cattle market. Drought has impacted pastures in the U.S. Plains to a point where there is not enough forage to graze. This includes winter wheat fields that are reportedly heading out with just three inches of growth. This has caused feeders to pull cattle off pasture sooner than normal and is part of the reason for February U.S. cattle placements to be 4 percent higher than a year ago.

These placements are elevating feed grain demand and straining margins as grain costs have rallied in recent weeks. Corn values have softened but remain 30 cents a bushel above winter lows. At the same time, feeder cattle have showed renewed strength. The combination of high-priced replacements, elevated feed costs, and questionable live cattle outlooks has more livestock producers willing to wait before filling pens at this time.

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