New tax year farmer selling picks up.

This morning’s grain trade is now softer after a robust first trading day of the year for corn and soybeans. Corn’s failure to punch through 460 was prevalent with increased new year tax sales, and soybeans had a run to the 1015 area, finding renewed selling interest. A few spotty showers that weren’t in the forecast started to develop in Argentina.

Indonesia’s government did declare that a 40% biofuel blend is required, with a one-and-a-half-month transitional period provided. Their government continues to push for higher blends, with calls for 50% blends in 2025 and a 60% blend in the works for 2026. There are questions over how this will work without subsidies to the consumer, though, as the tighter availability of higher blends will likely push prices higher.

The USDA’s National Agricultural Statistics Service releases monthly demand numbers for ethanol grind and soybean crush. These numbers consider all the demand for that industry, not just the demand reported via industry groups like we see in the National Oilseed Processors Association crush figures, for example. These numbers help to provide a more robust picture of the actual usage figures they consider when building out their demand estimates. After yesterday's close, they released the updated crush and grind figures for November from NASS, showing better-than-expected demand for both corn and soybeans.

The corn ground for ethanol in November was up 2% from a year ago and the third-highest figure for the month over the last 10 years. According to Ag Trader Talk, a well-followed analytical firm out of Illinois, Grinds for the first quarter is up 2.2% from a year ago and above the figure needed to meet current USDA estimates.

Soybean crush came in better than expected as well at 210 million bushels. Crush for November was another new monthly record, up 5% from last year. If we were to maintain this type of demand in the year ahead, we would likely see the USDA pushed to raise their domestic crush estimates. However, without clarity on blender credits after the current tax credit system expired at the end of 2024 and the Biden administration failed to guide its replacement, we could see a slowdown in the crush as domestic demand for biofuels falters.

Some spotty showers popped up over parts of Argentina yesterday, and while they were not necessarily forecasted, they were also not heavy or widespread. The forecast continues to call for chances of moisture across much of Argentina over the next few weeks, though amounts remain below average, with the heat expected to build. Dryness also expands across Southern Brazil, Paraguay, and Uruguay. Too much moisture is being reported in parts of Central and Northern Brazil, and while it is difficult to say it is hurting production at this point, it will be something to watch over the next several weeks. While heavy rain over the next couple of weeks is not necessarily detrimental, we may start to discuss a delayed start to soybean harvest and a subsequent delay to Safrinha planting if it were to continue beyond that.

Live and feeder cattle futures enjoyed a robust higher session yesterday, with a firm start anticipated today. February live cattle put in its best close since March 2024, while January feeders again at $3.45 and closed at their highest price since last March. Feeder cattle contracts beyond January all set contract highs. The negotiated fed cattle trade got underway on Thursday, with higher prices in all regions. Dressed sales in Nebraska ranged from $310-315, which was mostly $$6 higher for the week. Dressed sales in Iowa are $3 higher at $ 310. Live sales in the South were $3-4 higher for the week at $ 196, setting record highs in Kansas and Texas.

Box beef sales were slightly lower, with choice declining $0.74 to $323.48, while select slipped $0.29 to $294.23. Fed live cattle are targeting the $195-196 range, which is where June cattle expired.