Soybean oil and wheat lead overnight weakness for Turn-around Tuesday.

This morning's grain trade is mostly softer as soybean oil fell the sharp losses overnight on the Canadian canola oil that will continue to flow to the US without a tariff for the next 30 days. That put pressure on soybeans, while China did follow through by placing a 15% levy on $5 billion of US energy imports and a 10% duty on American oil and agricultural equipment. China also said it will investigate Google for alleged antitrust actions in band some key minerals, including tungsten. Google has not operated in China since 2010 and is forbidden.

Pres. Trump indicated late Monday that he plans to talk to Pres. Xi in the next 24 hours. In January 2020, China agreed to import $200 billion of US goods. China did not comply with the agreement, with perches amounting to only 116 billion. A deal today would not be as likely due to China's weak consumer demand. However, China imports 100 MMTs of soybeans annually. For now, their corn and wheat stores appear to be filled with prices being depressed.

What is different now than in 2018/19? China can secure meat, grain, and soybeans from others. Yet China sends $427 billion of goods to the US, and raising tariffs would significantly drag on an already softening economy. The potential meeting of top administration officials this coming weekend will be of heightened importance for a good outcome.

Soaking rain is now falling across the heart of Argentina cropland this morning, and totals over the next 24-36 hours of .5-2.50″ look to help stabilize some yields and rebuild moisture. There is another chance of rain in Argentina and Southern Brazil for mid-next week. Dry weather across Northern Brazil will help to finally advance soybean harvesting, which is well behind averages.

The cattle trade sank sharply lower on Monday, led by losses of over $5 died 00 in the feeder complex. Cattle futures opened lower on trade worries and technical selling along with the restart of Mexican cattle/feeder cattle imports following an aphis program of inspection/treatment for screwworm. Most of yesterday’s week and was tied to the reopening of the Mexican border which now does not have tariffs for 30 days at minimum.

Active trade will now hold off until later in the week given recent volatility, however feed yards may be coaxed in the selling steady cash bids if they can pick up extra dollars unhedged cattle for basis. Last week, the 5-area average price was $5 over Friday’s CME closing price. The North traded $5.50 over, and the South was $3.20 over. Cash prices in the first five weeks of the year have averaged a record $5 over the CME. April live cattle have support at 198-199. Further weakness if those areas are violated would be major at 194. March feeder cattle have spot continuation support at 267-269. The congestive resistance of late December and early January has now turned support.