Corn recovers to its December highs to start the week.

Grain prices were mostly higher overnight, with corn advancing towards the December highs near 450, prompting short-covering in wheat. The strength of soybeans overnight faded after the massive two-day lift in soybean meal stalled. Algeria is tendering for 50,000 MTs of wheat from mid-February into late March. World importers will start extending their forward coverage of wheat due to Russia and the slowing of exports through a quota system that starts on Fairbury 15th. Algeria typically tenders for more wheat than its initial request.

US trade representatives won their case against Mexico on GMO corn. Mexico’s leadership has been floating GMO corn bans for a handful of years, with thoughts they would move to restrict the importation of GMO corn in the years ahead. US officials argued Mexico’s ban was anti-science and went against the free trade agreement outlined between the two countries. Trade officials agreed, saying Mexico must keep their imports open to GMO corn to meet the requirements of the USMCA. Mexico officials say they are disappointed by the ruling but will follow it. Leaders say they will continue to work to limit the planting of GMO corn in Mexico to protect the native corn varieties produced there.

Brazil’s Congress has also passed its most recent budget, which experts say does not go far enough to fix its spending problem. Questions over whether Brazil’s central bank has lost control over the country’s inflation and currency remain. However, their move to auction off nearly $17 billion of their dollar reserves helped stabilize the collapse in the real world. Traders will watch the conversation out of Brazil closely to see if President Lula will do more to reel in the country’s spending after his programs to support the poor and raise wages have resulted in too much public debt.

Chinese leaders reiterated their desire to stabilize the country’s property market and boost consumer demand next year, which will likely only be made possible with increased government spending and direct payments. Chinese consumer confidence remains poor after much of the citizens' wealth has been lost in the collapse of the country’s housing and stock markets. In addition to direct to consumer stimulus, the country will likely work to develop new career paths for the nation’s young people in industries like gaming, AI and renewable energy.

Chinese government grain buyers have been active recently, purchasing US beans for the February through April shipping period, putting them into government reserves to be tapped into in a handful of years. US beans tend to store better, prompting the uptick in buying, but there has also been talk recently that some of these purchases could be seen as an olive branch from China to Trump.

Live and feeder cattle futures closed lower last week, with liquidation ahead of the COF report and profit-taking before the late-volume holiday weeks ahead. A firm trade is anticipated to develop as February live cattle did find support at trendline and 200-day MA values and rallied on Friday. Last week’s negotiated fed cattle trade was higher in the north and firm in the South. Sales in the north were steady-$1 higher at $1 95-196 while live trade in the South was steady-$1 higher at $191-192. Box beef values were mixed last week with choice off $.59 while select gained $2.05. Holiday premiums will start to come out of choice in the coming weeks, while tight supplies will support select beef.

The highest priced cattle contract on the board is the deliverable December contract. Cash is premium to all 2025 contracts and will have to do the heavy lifting, as the board continually refuses to offer hedging abilities for expensive feeder cattle placed which keeps feedlots on edge.