End of week short covering dominates overnight.

Grain futures firmed overnight on end of the week short covering after three heavy days of selling that caught bid in the Thursday forenoon trading. This morning’s employment data came out neutral, averting fears that the Fed would take more aggressive action against any data numbers stronger than anticipated. Jobs came in at 223,000 for December versus a 203,000 guess, while unemployment moved from a 3.7% estimate to its 3.5% actual. The dollar firmed on the data but below the 105 value, which was traded overnight. Soybeans firmed on the forecast, which is reducing the showers for the January 13-16th window, but the dryness and heat until the potential rain is prompting short covering and the beans.

January soybeans had 525 contracts issued for delivery overnight, with Cargill the likely stopper. In addition, there are 3 contracts for soy oil tendered and no soybean meal. Soybean deliveries were not anticipated, but they were taken by strong hands.

News out of China is that their allowing rapid Covid testing while the disease is running its course. It’s anticipated that a strong reopening buying surge following the Lunar New Year holiday could aid their economy in early February. It’s anticipated that the worst of the pandemic is occurring right now, with more than 90% of Beijing estimated to have been infected.

South American weather models are dry and hot for a lengthy period now across Argentina and portions of southern Brazil for the next 10 days. The models have reduced the amount of rain in the 10-day forecast, with both the EU/GFS forecast backing off rain totals for January 13-15th. Excluding RGDS in Southern Brazil, the Brazilian weather forecast remains favorable.

Live cattle were steady to lower yesterday, with feeder cattle lower, but a steady outlook is offered for early trade today. Negotiated fed cattle trade for Thursday was mostly steady with last week, with the southern plains quoted at $157, while dressed sales in the north were steady to $1 higher from last week and $252. Box beef values had choice slipping lower on the week and down $126, while select had gains of $0.55. The choice/select spread continues to narrow and was at $24.68 choice premium on cattle weights that are declining. Carcass weights are now down 7 pounds for the week at 920 pounds and the average heifer carcass was down 2 pounds at 844 pounds. Both continue to move away from the highs that were scored in early November.