Tuesday's large selling slowed overnight.

Grain futures found follow-through selling overnight, but corn and soybeans found support off yesterday’s lows and are recovering some losses in the morning hours. Tuesday’s abrupt selling from the opening price ticket to the close was one of the worst starts for the year in over a decade, as risk-off became the theme for grains, metals, and energies.

Strong potential for moisture from this past week and into mid-January weighed on row crops, while China’s inability to raise its economic outlook is a weight on markets. Other factors hanging in the balance include geopolitical conflicts, weather risks, and many potential changes in countries’ leadership, with 2024 a big year in world polls.

Black Sea area winter grains in Russia and N Ukraine are in danger from extreme forecasted Arctic cold conditions over the next 10 days. If prolonged, uneven snow cover may start to support wheat values. It has been years since Black Sea wheat has endured such bitter cold. The SW crop areas lack any snow insulation. Winterkill damage is difficult to assess until spring greeting, but forecasts are cold for the Black Sea winter grains for an extended period.

Trade sources in India said the country's December palm oil imports were up +1.9% from November to 886,000 MT, and refined palm oil product imports rose +47% to 252,000 MT. December soyoil imports were up +1.4% over the prior month to 152,000 MT. Sunflower imports rose during December by 104% to 263,000 MT. Senior government officials indicated the country's wheat stocks will remain above normal levels in April despite recent sales from government-held supplies. The government's stocks as of Jan 1 were 16.47 MMT, the lowest level since 2017.

Debate continues now on how much the USDA and CONAB will cut 2024 Brazilian soybean and corn crop estimates based on the record heat and dryness that was applied to northern and central Brazil from September 1 to the closing days of December. Improving rainfall is occurring, and forecasts continue, which will have an effect on the late-planted crop. Crop guesses are hovering near 149-152 MMTs for soybeans and 116-112 MMTs for corn. These yields are not outright bullish but are a factor that puts some limit on downside price potential. Early Mato Grosso Brazil’s soybean yields are extremely disappointing, and the question remains: how much improvement in yield for the latest planted soybeans occurs?

South American weather model stays in agreement with near to above-normal monsoonal rain across N Brazil into mid-January and seasonal temperatures. Following what has been months of abnormal heat/dryness, this weather is welcomed. Widely scattered showers did dot north and central Brazil overnight with rainfall totals of .2-2.50” with heavier amounts favoring NE Brazilian crop areas and Bahia and Minas Gerais. The 10-day forecast calls for 1.50-6.00“.

Live and feeder cattle futures moved sharply higher on Tuesday, with a firm outlook anticipated today. Very live cattle jumped $3.40 at the start of the week on higher indications from the cash market, as initial trade on Tuesday in IA had reported selling at $175, which was $2 higher on the week and reflective of the December live cattle sharply higher settlement. The extreme discount of over $5.00 from December to February was obtuse and needed to be corrected. Elsewhere in the Plains, bids and offers run quoted, but feedyards will not be looking to sell their cattle offerings at $2-4 higher this week.

Adverse weather is headed for the Midwest next week, which will have yields for harvest cutback. Box beef values fell sharply, with choice down $5.37 at $284.34 while select tumbled $1.47 at $258.86. Live cattle in February are taking aim at $175, which is the 38% retracement of the recent collapse in price during November, along with the 50-day MA.