The grain trade is short covering ahead of some key reports.

There is a firmer grain trade today, as short covering arrives ahead of US weekly export sales, Stats Canada’s grain production report this morning, and Friday’s jobs numbers, which will have an effect on the US dollar. Next week is the December WASDE report on Tuesday, December 10. This morning stats Canada data put all wheat at 34.958 MMTs versus an estimate of 35.1, canola 17.84 MMTs versus estimate 18.5, oats at 3.358 MMTs and their estimate was 3.1.

Next week's December WASDE report is not anticipated to be too exciting as there will be no crop production numbers, as they will be done in the January final production data. It is widely expected that WASDE will raise its soy oil export forecast significantly due to the dramatic expansion of US export sales. The increase in US oil exports must reduce US biofuel use amid the uncertain Biden 45Z policy on tax credits.

Authorities in Mexico announced they had detained more than 5,200 migrants making their way toward the United States on Tuesday in a major crackdown. A group of activists working to defend the rights of migrants trying to get into the US denounced the move, saying it was obviously a response to Trump’s tariff threats. Whether it is a reaction to the threat of tariffs or not, officials say they will continue to use the branches of their armed forces to push migrants away from the US border, with thoughts that many will be detained and then returned to their home countries.

Canada announced a similar plan last week, sending National Guard troops to their border to help crackdown on illegal crossings and drug trafficking. Officials also launched a global ad campaign in several languages designed to keep immigrants from seeking asylum in the country. Changes to immigration rules have also been announced for 2025 across all of Canada, but those were in the works before Trump’s election win. With both countries actively working to stop migrants moving to the border in an obvious way, the threat of tariffs seems less likely, at least for now.

Meanwhile, officials in China have been relatively quiet after Trump’s most recent tariff threats, reiterating that both countries will lose if the trade war is revived. The Biden administration banned the export of US technology and equipment to a whole host of entities, taking additional steps to limit trade between the US and China. In response, China has announced the ban on sales of several critical minerals used in producing infrared technology, fiber optic cables, and solar cells. Impacts on bullet and weaponry production are also expected, with the thought that China could soon limit the export of other even more important minerals. The moves mirror the Biden administration’s ban, citing the minerals' use for military purposes in the same way the Biden administration said its ban was to stop the development of Chinese military technology.

We have China in a wait and see mode when it comes to not only how much they will buy in the year ahead but also who they will buy it from. We have seen a sharp drop in Brazilian bean basis from February forward as Chinese buyers bet values will continue to get cheaper on the back of a much larger crop than a year ago. According to Agrinvest, a Brazil analytic and cash brokerage firm, China has already been somewhat aggressive in their new crop bean purchasing out of Brazil, with a book that is 6 mmt or 220 million bushels larger than a year ago. However, even with the spread between nearby US and deferred Brazilian values widening, we are still seeing a decent purchase pace of US beans by Chinese buyers. How long it lasts is the biggest question in the market right now, with most expecting export business to all but dry up for beans in the weeks ahead.

Live and feeder cattle futures ended lower to sharply lower yesterday when momentum in both live and feeder cattle contracts stalling at the prior week’s resistance for live cattle. February cattle futures have traded even with December, while January feeders are priced under the cash index. The cash index gained $0.44 on Wednesday to $259.82 and is now within $2 of the record high. Cash markets are quiet, but a small number reportedly sold in Nebraska at $1 90 on a live basis, which was $one lower from last week. Packers are reportedly bidding cattle in the north and $190 live and $2 95 dressed. Offers in the South are quoted $192-194.

Cattle slaughtered midweek totaled 367,000 head, down 3000 from last week and 11,000 fewer than a year ago. Box beef values were mixed, with choice off $2.50 at $308.33, while select gained $2.37 to $277.70. Fed live cattle have support in the 187.00-187.50 range for setbacks.