The US dollar overnight tags 106.99, tagging the November 1, 2023 high of 106.99.

A lower grain trade this morning except for soybean oil recovering. Overnight US dollar rose to a one year high at 106.99, driven by thoughts we will see growth but also inflationary pressure when looking at the economic policies we are likely to see unveiled over the next few months. Yesterday’s CPI data came in as expected and was a little hot compared to what we’ve seen in the past few reports, but not hot enough to change trader thoughts on a December rate cut. Cash traders report demand remains relatively robust, with cheaper freight values allowing for room enough in our export offers to help offset some of the recent dollar strength.

Chinese bean buyers have been relatively quiet since last week’s election while traders work to assess what it means for trade as we move ahead. Aggressive purchases for Brazilian new crop supplies have taken place over the last several weeks, with purchases from the US for short-term shipments seen at the same time. Traders still believe China has around 10 million metric tons, or around 350 million bushels of soybeans, left to buy before the end of February. However, some feel Chinese purchases may slow in the near term as conditions in South America remain solid, and the outlook for a record crop remains in sight.

Traders continue to debate what Trump’s latest appointments will mean for trade and geopolitics in the months ahead as well. We continue to wait for clarity on who the new Secretary of Agriculture will be, with many names still in the mix for trade, treasury, and commerce. Much ado has been made about Trump’s recent EPA choice and his prior dislike for biofuels, which may now be offset by South Dakota Senator John Thune’s rise to Senate leadership. Thune has a long list of accomplishments in supporting biofuels and is seen as a win in the face of a handful of recent losses for the biofuel industry.

Palm oil overnight fell one penny a pound to $.507, but stability and palm oils break will be watched with interest as the US soy oil market remains highly competitive in the world veg oil marketplace. The big setback in soil this week made sense amid fear of the future of the US biofuel policy, but mostly, it was because funds had been estimated to be holding a net long of 75,000 contracts, which is at a two-year high. Those long positions have now been unwound. Soy oil export commitments as of October 31 were 515 Mil pounds, or 86% of the USDA’s annual forecast, with 45 weeks remaining in the crop year. Rallies moving forward on soy oil will be a function of export demand rather than biofuel production. Spot rapeseed oil in Europe is quoted at $0.58/pound.

Today’s EIA report should feature ethanol production in the week ending November 8, which should be nearly unchanged from the previous week and up 55 and 6% from the same week in 2023. Crude oil stocks are anticipated to expand seasonally into the holiday period.

It was a mixed trade in cattle futures yesterday, with December live cattle lacking direction at midweek and holding in a narrow range but well below last week’s chart gap, which was lower on Friday. There was some cash trade reported on Wednesday in Nebraska, where dressed sales were down $3 for the week at $290. Live bids in the north and south were reported at $185, $1 lower in the north, and $2 lower in the South, with no sales occurring.

Cattle slaughter at midweek totaled three and 58,000 head, down 11,000 from last week and 18,000 head fewer than a year ago. Box beef values at midweek were $1.33 lower on choice with select weaker by aa $1.26. The consumer price index data on Wednesday show that October's average retail beef price fell 4% from September and was 1% lower than a year ago at $8.12/pound. Although small, it was the largest year-over-your decline since December 2022.