Soybeans helped prompt an overnight recovery bounce in price.

Short covering was a feature in the overnight grain trade, with soybeans leading to the recovery bounce. The news was sparse as for the buying interest, other than index funds, which are now buying breaks. Early Wednesday morning, corn, soybeans, and wheat again saw new highs for the year. We're Keeping the Algo rhythm/AI computers buying breaks for now.

Overnight, China said it would protect its interests in the face of US tariffs; according to China’s Minister of Commerce, China’s toughened tone is the opening salvo in politically responding to the 10% of additional US tariffs. China has filed a trade complaint with the WTO and urge the US to create a fair and predictable environment for mutual trade. Pres. Trump indicated on Tuesday that he was in no hurry to speak with Pres. Xi, as they are in violation of the phase 1 trade deal signed in 2020.

Pres. Trump’s nominee to head the US Trade Office, James Greer, will appear before the U.S. Senate Finance Committee today. Mr. Greer served as Chief of Staff for Robert Lighthizer, Trump’s initial US Trade Representative, and is a strong proponent of tariffs. He has advocated that the US consider whether to maintain normal trading relations with China annually.

Trading giants Cargill, Bungee, and ADM reported disappointing fourth-quarter earnings and are planning to cut staff to save costs. Both ADM and Bungee are reporting their worst earnings since 2019/2020. Also, adding profit but margin compression is the uncertainty surrounding the US biofuel subsidy program, with the Trump administration yet to comment. The Biden administration failed to release guidance and was one year late in doing so.

The corn market is watching to see if Brazil’s winter corn crop can get seeded and if US farmers plant 93-94 million acres of corn before it can change the dynamics of its current uptrend. The slashed carryout in the US of 1.54 Bil Bu since last February sets up the prospects for bullish grain price spikes if acreage is low and there are weather-related shortfalls this coming spring in South America and summer for the US.

The forecast in South America maintains regular rainfall chances over the next two weeks in Central and Northern Argentina and throughout southern Brazil. A drier weather trend does prevail across Northern Brazil to help move harvest along in the seeding of winter corn. The rains for Argentina and Southern Brazil and dryness across Northern Brazil are now ideal for mid-February.

Yesterday was a recovery day for the cattle trade, with sharply higher moves experienced in both live and feeder cattle. After falling $9 in five days on technical liquidation, live cattle found support in the resistance range of 198-199 in the first half of January. Feeder cattle bounced off of trendline support after tumbling $12 and gained over $3.00. A small number of cattle were reported sold in Kansas at $205, which was $3 lower, and thin sales at $328 dressed were quoted in NE early in the day. Later-day bids of $206 in the South, while live bids of $208 and $328 dressed in the North, were passed.

Monday’s high of 203.27 in April live cattle and 276.65 in March feeder cattle will be marked as major resistance for recoveries to breach and suggest the cattle recovery will return to prior momentum.