CONAB released the Brazil crop report, almost unchanged from last month.

This morning’s trade is mixed with the weakness of a few pennies noted in the corn market. Cash flow needs and an overall improvement of cash values offered to farmers of a dollar a bushel or more in some locations since pre-harvest lows have prompted a surge in farmer selling, capping some of the recent strength in the corn market yesterday (and at the 200 day-MA of 451.2). Spread action and basis strength have pointed to tighter supplies than what the USDA was projecting, with the increase in farmer selling now allowing for some relaxation in basis and front-end spreads.

Brazil’s CONAB released their Brazilian crop report this morning, leaving the bean crop at 166.2 MMTs and corn at 119.6 MMTs. Rising interest rates in Brazil due to massive government budget deficits will also elicit active crop sales by producers as the Brazilian real strengthened on the Central Bank rate increased to 5.97:1 USD. Saudi Arabia has released a tender for 595,000 MTs of optional origin 12.5% protein wheat to arrive between mid-February and mid-April. Price offers are due Friday, and results are expected on Monday. The purchases will likely go to the Black Sea, Eastern European countries, and Argentine wheat. Russian FOB wheat is up $1/MT at $233/MT.

Since late yesterday, reports have circulated that Trump has invited Xi to his inauguration and that Chinese officials have said they are ready to engage with Trump’s trade team. The trade is also watching for news out of China after this week’s Central Economic Work Conference wraps up. The Chinese state media officials have said they intend to prioritize expanding domestic demand in the year ahead, with reports that we will see adjustments made to allow for further direct-to-consumer stimulus. Of course, every other stimulus announcement, or lack thereof, has been disappointing recently, so traders will likely wait for more clarity before growing excited.

Live and feeder cattle futures had another sharply higher session on Wednesday, with a firm outlook offered for this morning’s trade. December cattle led the live complex higher and closed at its best price since October 23 as cash markets continued their strong trade. Meanwhile, February cattle broke above $190 and finally made their best settlement since May. Negotiated fed cattle trade occurred Wednesday at higher prices in all regions. Dressed trade in Nebraska was quoted at $299-300, $2-3 higher than last week. Live trade in Kansas was $192-193, while sales in Texas were $192. Sales in Kansas and Texas set new records this week, while the dress trade in Nebraska was still $15 under the record high set in July.

Cattle slaughter at midweek totaled 364,000 head, down 3000 from last week and 15,000 head less than a year ago. The choice beef cutout value was off $0.50 on Wednesday at $311 but is still $20/CWT higher than a year ago. Live cattle are breaking out above their long-term continuation resistance, while feeder cattle still have to navigate through 260 to break out of long-term resistance.