A firm trade this morning with soybeans challenging $10.00.

This morning’s grain trade is higher across the board as further short covering and buying interest develops ahead of Tuesday’s WASDE Crop report. This week's strength has numerous new inputs along with old ones to deal with. From the fall of the Assad regime in Syria to Chinese leadership vowing to support domestic demand, tough trade talk from Trump, and a whole host of world economic data in between, we will have more than enough to pay attention to this week.

The fall of the Assad regime in Syria felt as though it came very quickly, as the rebel led offensive took control of important cities at a lightning pace the past couple of weeks. However, the battle to remove Assad has been ongoing for over 13 years now, with support from both Russia and Iran helping to keep him in power—something both countries were unable to provide this go around. While these developments will likely have a limited direct impact on grains, what it means for Russia and Iran moving forward could be interesting as both countries appear to be the ‘losers.’ Unrest and an eventual ‘power vacuum’ are causing concern in the region, as no one is sure who will rise to power in Syria in the months ahead. The group given the bulk of credit for the takedown of Assad is listed as a terrorist group in the US.

According to a readout from this morning's Politburo committee, the Chinese leadership is looking to change their monetary policy approach thoroughly. Top officials say they will adopt a ‘more active’ set of policies, working to stimulate domestic demand. For the first time since the 2009 financial crisis, leaders also used the phrase ‘moderately loose’ to describe their approach to monetary policy. Analysts say the revival of what they call ‘crisis-era’ language in official communication is a sign that leaders are taking the current deflationary cycle seriously and will do whatever they can to stabilize the outlook. This development comes just ahead of the country’s Central Economic Work Conference this week, where officials are expected to outline their economic targets for 2025. What happens at the meeting could have significant implications in the year ahead, as it appears boosting consumption and domestic demand will become a priority.

We will get a supply and demand update tomorrow from the USDA, though it will be heavy on demand and limited on supply as they will not update US production in this report. Traders expect a slight bump to corn exports after one of the best starts to the program in a couple of years, though no significant changes are expected, with ending stocks only expected to be slightly lower than last month. US soy oil exports have been on fire, so WASDE will have to substantially increase soy oil exports as the sales pace has been running 160% above November's number, with 9.5 months remaining in the crop year.

Live and feeder cattle futures tumbled last week despite an improving cash trade for both live and feeder cattle. Fund liquidation weighed heavily on February live cattle, pushing below the 50-day and 200-day moving averages. Despite a higher cash trade for live cattle at 192. The cash feeder Index rose last week from $7.51 to $261.83 and finished just a nickel under the July high record. We will likely see the cash feeder Index set a record high this week.

The COT report showed that for the week ending December 3, funds bought 7,004 contracts against 1675 contracts sold commercially. The fund length of 122,400 contracts has been the highest since April 2019. Historically, fund length over 125,000 is seen as extreme, and there will likely be caution as the cash trade is watched. Initial support for February live cattle is near $184 and will take a rally beyond $190 to excite the board, with cash holding over 192, if it can do so, over the next few weeks.