The grain trade showed a strong recovery overnight in wheat.

The markets are showing signs of strength overnight, with wheat leading the way on Putin's comments and some questions over Russia’s ability to facilitate exports as we move ahead. In the Eastern part of Ukraine, Russian forces have been making significant advances on the ground in the Donetsk region after Ukrainian troops turned their attention to taking Russian territory in the Kursk oblast. Reports circulated over the weekend that Ukraine would be replacing a commander in the region as Russia manages to advance at its fastest pace since the start of the war.

Russian forces attacked energy infrastructure in Western Ukraine again over the weekend as well, knocking out power to many in the region. Experts believe we will see a push by Russia to take over as much territory as possible ahead of Trump’s return to the White House because many believe we will see the frontlines frozen as part of any peace negotiations.

Saudi Arabia tendered for a much larger amount of wheat than was expected. They purchased a hundred 4000 MTs of 12.5% optional origin wheat for delivery to four ports between mid-February and April. The sale included a host of origins depending on future FOB costs and transportation. The wheat was priced on a CIF basis, with sales between $262.50 and $269.89/MT.

China has confirmed that boosting domestic consumption will be their primary goal in 2025. While we continue to wait for specifics, it appears as though we will see consumption vouchers and different trade in programs acting as the initial driver to stimulate demand. It is interesting to note that Chinese officials are also working to build out new and emerging industries in the country, supporting gaming, AI, and renewable energy development to provide high-paying jobs to the nation’s young people—another top priority.

NOPA will release its November Crush Report today with estimates of 196-20 one Mil Bu, with soy oil stocks rising 4-5%. The record crush and slowing US export pace of soybean meal are pressuring the meal basis. Any potential rally rests in soy oil export demand and the prospect of Z45 approval.

This week will be an interesting mix of outside inputs from the Fed’s rate decision and developments out of China, the Black Sea, and other geopolitical hot spots. Meanwhile, grain trade developments should be minimal before the holiday. We will get updated export inspections later this morning, with traders combing them for signs of who ‘Unknown’ may be as they maintain the biggest year-over-year gain in corn purchases.

Last week was another solid gaining week for cattle and feeder cattle, and a firm start is anticipated this morning. Last week, December cattle gained more than $6 and put in the highest weekly close since September 2023, with nearby futures also marking record weekly closing. Overall, box beef gains saw choice pick up $4 and select higher by $7. The COT report showed that for the week ending December 12, funds bought 3,900 contracts against 7,550 commercial sales. The fund length of 126,300 contracts is now the largest since April 2019.

February live cattle now have technical support at 189-190, while the next targeted resistance will become $195. The market awaits news on when the US/Mexican border will reopen to feeder cattle trade.