Soybean oil leads overnight weakness.

The grain trade was softer overnight, led by soybeans. On its pullback, soybean oil pressed new November lows as palm oil prices also retreated. China appears to be slowing its soybean purchasing pace, with its early January coverage nearly filled. Cheaper soybean FOB offers from Brazil are garnering demand for February forward.

News that President-Elect Trump has tapped Howard Lutnick as head of the Commerce Department pressured soybeans due to his more hawkish stance when it comes to China. Lutnick had been in the discussion for Treasury Secretary, garnering support from Elon Musk, with others like Robert Lighthizer said to be in the running for the commerce position. This role will be important in the upcoming administration as it oversees the handling of tariffs and the overall agenda for trade. In his role, Lutnick will also oversee the US Trade Representative’s office, Trump added when announcing the decision. Typically, the USTR reports directly to the president with additional oversight provided by Congress, according to Reuters, making this announcement interesting and something to watch as we move ahead. His past positions show that Lutnick greatly supports tariffing Chinese goods. However, some feel his position as the CEO of a major investment firm with holdings in China, could provide a more moderate approach once in action.

Russia’s change to its nuclear doctrine, while worrisome to a certain extent, is seen by world leaders and analysts as simple saber rattling with a limited chance of becoming a reality. With Trump coming back into office soon and likely pushing for a freeze of the front lines as part of his proposed peace plan, it is possible Putin may see that simply waiting will gain him more. However, it is likely we will see Ukraine work to ramp up attacks on Russian territory as increased US aid begins to flow ahead of Biden’s departure from office.

Overnight reports did begin to circulate, however, of an impending major missile attack by Russia on Ukraine. The reports pushed the US Embassy in Ukraine to close and air raid sirens to blare across the country. Officials say they are investigating what they are calling a psychological attack by Russia, though the threat of a major missile strike looms each day.

World wheat futures are correcting the recent gains amid the lack of escalation in the Ukraine/Russian volleys. However, in the background, Russia’s geopolitical nuclear threat is percolating following the Biden administration’s allowing Ukraine to use Western-made missiles to reach deeper into Russia. The missiles are not capable of making it to Moscow but do move well over 100 miles into Russian territory when fired from near the Kursk area. It’s Wednesday, and being short wheat into the weekend will not be a popular trade idea. Russian FOB wheat is steady at $228/MT.

South American forecasts remain favorable. A mixture of rain and sunshine, with no extreme heat, is helping Brazil, Argentina, and Paraguay crops for the next two weeks. Daily showers in N Brazil will produce 3-6.00″ of rainfall over the next 10 days.

Live and feeder cattle futures experienced a sharply higher trade on Tuesday, and a firm outlook is anticipated for this morning. December live cattle led prices higher; it closed an open chart gap from two weeks ago Friday. It settled above $186.00. Feeder cattle also marked an even stronger session as deferred live cattle advanced and corn prices softened moderately. January feeders closed above their 200-day moving average and is now at a 4-month high.

Negotiated fed cattle on Tuesday had seen some light sales develop in Nebraska at $290, which was steady with last week. Meaningful bids were not quoted, while asking prices in the South were $2-3 higher at $187-188. US beef imports continue at a record pace and have accelerated recently. Cumulative imports are now 17% more than a year ago and the largest on record since the USDA weekly reporting began in 2013. US beef lean prices have dropped $40/CWT from their summer high but are at a $45 premium to Australian lean beef versus $32 premium last year. December live cattle can now be targeting recent resistance at $188-190.