Soybean oil leads overnight recovery trade.

This morning’s grain trade offers a bounce, led by soybean oil, as world oil values recover from a week's worth of selling. Obviously, the sentiment remains negative towards grains as traders point to Trump’s threat of blanket tariffs and excellent growing conditions in South America as reasons to be bearish. Many like to point to market performance during his first administration as an indication of where prices will head during his second. However, as we all know, past performance is obviously not indicative of further results.

According to Bloomberg, JP Morgan head Jamie Dimon said during a conference of CEOs yesterday that he believes Trump lays out his approach to negotiations in his book The Art of the Deal, saying President Trump will use the threat of large-scale blanket tariffs to “get people to the table.” Dimon said he hopes the president approaches these negotiations and trade wisely, saying he knows that Trump is “not against trade.” Biden’s trade representative supports the idea of targeted tariffs, saying they are necessary to avoid a “deluge” of Chinese products undercutting American industries.

In addition to talking about what to expect for trade and the economy, traders are debating what will happen next when it comes to rates after a hotter CPI figure was seen this week. Jerome Powell spoke to a group yesterday in Dallas, indicating that the path towards a rate cut in December and January is not necessarily as clear as the market wants to believe. The dollar moved higher after his remarks but did not exceed the morning high of 106.99, with the market now pricing in a December cut but backing away from expectations we see one in January.

Retail sales data out of China overnight showed that some of the stimulus the government is rolling out must be working to shore up consumer confidence to a certain extent. Consumption growth for the month hit an eight-month high, with retail sales coming in higher than what traders were expecting as consumption vouchers and trade-in programs spur the purchases of household goods. A handful of other positive signs were seen, with the drop in property values slowing significantly.

In other news, officials in the EU voted to delay the official implementation of their deforestation regulations. As expected, the vote yesterday pushed back the program's start date from the first of January to next year for large companies, with small companies able to have until June of 2026 to fully implement the policies. In addition to the delay, the group voted to open the door to ‘no-risk’ countries without providing tracking information. The no-risk countries are countries thought to have limited or no deforestation risk. Climate groups have slammed the no-risk designation as a way for high-risk countries to push products into the bloc without proper documentation.

Leadership in Mexico has proposed changes to how the country handles their domestic white corn production, saying they would like to restrict the use or importation of GMO white corn. Mexico is self-sufficient in white corn production, importing yellow corn for feed use. The decision yesterday, while at face value feels worrisome, makes sense to a certain degree, as officials there say the country has 60 different white corn varieties native to it that they would like to protect. Overall, this should not impact Mexico's corn purchases from the US.

The NOPA October member crush report will be out later this morning. It’s expected to show a record crush of 200-202 Mil Bu and a modest rise in Soyoil stocks to 1,100 million pounds from September. What is unknown is how they will incorporate three new crush plants that have come online this fall and whether or not they will be included in the data. It is possible that several plants will not be included, which will skew the results.

Live and feeder cattle futures moved lower on Thursday with a softer outlook offered for early trade this morning. Summer live cattle fell $1 on a lower cash trend and was under all major moving averages at the close. November feeders gained a $1 as the cash index jumped $2.02 to $251.04. Cash trading on Thursday had the dress trade similar to Wednesday at $290, which was $3 lower for the week. Live sales in the South were off $2 from last week at $185 or $2 over Thursday's CME closing price.

The difficulties continue with the beef market, which continues to remove premium from cutout values and is expected to slip Choice under $300 in the coming weeks. On Thursday, the choice cutout value gave up $3.14 at $303.80, while select was off $2 and $276.66. Beef cow slaughter rates have seasonally turned higher but remain well below a year ago. Humoral tips cow slaughter for the year is down 18% from last year and has been the slowest since 2017. Relative to the January 1 inventory, slaughter is at a 5 in your low of 8.6%. Similar to last year, there is a risk of some chart-based liquidation with index funds that haven’t gotten so heavily long in the cattle trade over the past two months.