Corn absorbs farmer selling after big early week gains.

This morning’s grain trade is mixed, with wheat firming and corn steady while soybeans soften. After a strong lift this past week on the corn futures, while the basis had been strong, it would not be uncommon to see strong farmer selling develop in the market. Both basis and spreads have weakened over the last few days after the new highs created flat price incentives for selling. Some of the flat prices offered to growers this past week were the best since June and parts of the corn belt.

Yesterday's export sales would’ve been considered good any time of the year, but because all the front running was seen late, the Bears want to note that we are coming off a very aggressive sales pace over the past few months. At 946,000 metric tons, or just over 37 million bushels sold for the week, the corn sales figure was the lowest seen in 10 weeks but keeps us well ahead of last year’s selling pace and the pace needed to meet updated USDA projections.

It is interesting to note that with all the talk of front-loaded sales, corn purchases by our traditional customers are ahead last year by less than 1 mmt each, with Unknown the only standout having 4.4 million metric tons or 173 million bushels of additional purchases on the books than seen a year ago. Interestingly, “Unknown” was absent for the first time in many weeks in this week's disappointing sales figures.
Who Unknown remains hotly debated, with many insisting there is no way it could be China, saying it is likely buyers from the European Union instead. As more becomes clear about the EU quality issues, with reports of significantly high toxin levels and difficulty using the region’s corn crop for feed, it is possible the lion’s share could be European buyers, though why they would buy under Unknown is a bit of a mystery.

Looking ahead, traders will work to wrap up the year's second to last true business week. Russia launched an attack on Ukraine’s energy infrastructure overnight again, causing significant damage. Analysts are a bit disappointed with the lack of details after this week’s Central Economic Work Conference in China. However, that is traditionally the case, with top-level decisions made during the meeting but individual ministries tasked with the eventual rollout. Russian fob wheat picked up another $2/MT at $235/MT, and French milling wheat is gaining $1/MT at $230.

Live and feeder cattle futures pressed new seasonal highs and closed lower on the session. February cattle traded above $192, the highest price since last March. With this week’s cash trade established, index funds at multi-month highs are expected to weigh on further profit-taking from this week’s significant $6 lift since Monday morning. March feeder cattle reached their highest price since July, while the cash feeder Index continued to set new records and was $1.61 higher at $263.07.

Box beef prices jumped yesterday, with Choice gaining $4.01 and Select picking up $2.37/CWT. Beef cow slaughter rates have been well below a year ago and at multi-year lows throughout 2024. Cumin to fed cattle slaughter for the year is 19% less than a year ago, the lowest in seven years. Liquidation ended in 2023, but the market awaits the January Cattle Inventory report on January 31 to understand the degree of herd expansion. February live cattle should have initial support at former resistance at 189.00-190.00.