Grain and livestock futures close at 12:15 CT today.

This morning’s grain trade is mixed with corn showing a penny gain while wheat futures are steady-one penny lower. Soybeans are off 3-4 cents as they recover from overnight selling as the long-term weather models maintain hope for moisture in the dry southern Brazil and Argentine soybean fields. Today, grain and livestock markets will close at 12:15 CT in mourning for the passing of former US Pres. Jimmy Carter.

The US dollar maintained its strength near 109, amid concern that the Federal Reserve will slow future rate cuts due to the strong US economy and lingering inflation. Meanwhile, President-elect Trump continues to threaten Canada with new tariffs as he pushes for drug and border controls and new trade negotiations. Agriculture will be part of the discussion relative to Canada’s tariff and non-tariff barriers, which could slow the flow of Canadian ag goods into the US. Reports continue to circulate that Pres. Trump is considering a universal tariff on all imported goods and could enact a US economic emergency declaration before February.

There are rumors also that the Biden administration may be considering enacting presidential decrees to protect the US environment, which include announcing 45Z rules/terms before departing on January 20. This would include new producer tax credits for the US biofuel industry which has been supporting soybean oil over the last several sessions. Sec. Vilsack of the USDA has consistently stated that the US treasury would clarify and announce the 40 5Z terms and credits before departing. If this occurs, it will take congressional action if the Trump administration wants to repeal the 2021 wrongfully named Inflation Rate Adjustment Act, and 45Z would take months.

Indonesia is confirming that exports of used cooking oil have included virgin palm oil, as January-November exports of 3.6 MMT surpassed its domestic capacity. On Wednesday, Indonesia pushed to regulate UCO exports as their palm oil diesel blend rate rose to 40% from 35% at the end of February. World UCO FOB price offers continue to rise, with its landed value in the western US above spot soy oil values.

The southern Brazil and Argentine weather forecast maintain below-normal rainfall for another 10 days, but portions of S and W Argentina will start to see some needed showers in the next 48 hours. The forecast holds potential for rain during the 10-14-day period of January, with S Brazil receiving 1.00-3.50″. Argentina continues to come up short, but there are improving chances, which has softened the bean trade.

Yesterday, live cattle initially ignored the news that the border for Mexican feeder cattle would reopen the week of January 20, but as the day wore on, reality set in, and futures pushed sharply lower as a correction unfolded, putting live cattle down over $2.00 while feeder cattle futures were off near $3 lower. Meanwhile, the cash index showed a gain of $0.57 to set a record at $272.86.

This week, the negotiated fed cattle trade is looking to ask prices in the north of $200 on a live basis and bids of $195. In the South, show lists were offered at $ 200 without quoted bids. So far, the outlook heading into the end of the week remains firm. Cattle slaughter at midweek totaled 357,000 head, up 132,000 head last week. Despite the uptick in slaughter, box beef values were higher at midweek. Choice has gained $2.82, and select rose $1.46. While the choice/select spread has narrowed in recent weeks due to the choice value doing the heavy lifting. The select value has rallied $36 from the low of late November, the highest price since June 2023.

It appears a correction is about to unfold in the cattle market. February cattle will have the first major support at 189.50-190.50, while March feeder cattle should initially have support at 260.00-261.00; both used to be significant resistance, and both should now be initial support.