WASDE crop report at 11:00 CT today.

Corn and soybeans are higher this morning, led by a sharply higher soybean all market, as the Treasury Department is expected to release their in-term guidance on the clean fuel tax credit, 45Z. These guidelines have been awaited for months as they could allow the US biofuel industry producer tax credits under the 2021 Inflation Adjustment Act to be implemented; however, Pres. Biden will not determine the GREET model for US Farm participation. The decision will be pushed ahead of Pres.-elect Trump. The 45Z announcement is labeled” notice of intent” in rulemaking rather than “rule,” which leaves all of this to the Trump Administration's determination. This will be months, then again, without a final 45Z determination.

Today’s January crop report will include the final determination of the 2024 corn and soybean yields, the first estimate of the 2025 winter wheat acres, and December grain stocks. WASDE will again put guesses on the South American crop sizes and US ending stocks. It will be interesting to watch the USDA if they slow walk the Brazilian crop size to the upside, similar to how they slowly walked yield reductions last year. Probably not, as USDA likes to find grain. But a 171 MMT bean crop has already been traded if the USDA jumped to that level. 

This morning’s monthly employment numbers came in much stronger than expected. Estimates were for 155,000 job gains, and it was 256,000. This pushed the US dollar sharply higher, up $0.73 this morning at 109.73, while stock indexes dropped on increasing 10-year note values and the lack of Federal Reserve rate reductions in the near term. The buzz after the release of the report was that we could possibly see a rate increase this year.

Argentine forecasts show that heat will persist across the country, with highs in the mid-90s to lower 100s, while near-to-below-normal temperatures move across Brazil. A few widely scattered showers will occur in Buenos Aires and Córdoba with accumulations in the .1-.9″ range and will be scattered in nature. The northern two-thirds of Argentina will hold in an arid flow into January 19 with the hope for rains to develop after January 20. It’s another weather weekend to see if, come Sunday night, rain showers remain in their allotted time slots for January 20-22.

Live and feeder cattle raced higher again yesterday into new contract highs as the trade brushed off Wednesday’s big selloff and reclaimed all losses, adding further strength. February cattle were up $3.90 at a record close, with deferred live cattle and feeder cattle futures following. Yesterday’s feeder cash index gained $2.14 to another new record high of $275. Cash trade on Thursday was sharply higher in all regions, with the north being $5 higher at $ 205 and dressed sales at $320, which also was a gain of $5 from last week. Live sales in the South were quoted $4 higher at $200. Prices in all regions were record highs, with more trade expected today.

Steer carcass weights set a record seasonal high of 960 pounds in November and have slipped 7 pounds to 953 for the week ending December 21. However, heifer weights jumped 5 pounds that week to a record 873 pounds. Winter stress will pull weights lower in the coming weeks, but this year’s seasonal decline will start from a record weight peak.

February live cattle closed yesterday at 197.60. This is a 7-plus discount to the current cash trade. The February contract is based on the cash trade at the end of February, so offering values above 200 to be hedged will likely require even higher cash values in the near term.