The overnight price strength turned mixed by morning.

The overnight trade was mixed, with wheat again being the softer leg this morning, while soybeans maintained a small, short-covering gain. Any fresh news to reverse the trend is lacking, so short-covering bounces are just bouncing blips for now. USDA Weekly Export Sales are delayed until tomorrow due to the MLK holiday. Export demand has been slow, with Ukraine prices at a steep discount to the US and EU. It was reported that Egypt purchased 300K MT of Russian and 60K MT of French wheat. There has been increased demand this week also from Algeria, Jordan, and Tunisia.

Ukraine’s ambassador to Turkey indicated that there have been negotiations with the UN regarding the expired grain export initiative and to find a format to include international partner assistance. In addition to hindrances in the Black Sea, Ukraine’s Ag Ministry said that Red Sea tensions have slowed their Ag exports to Asian and African destinations. Regional tensions are growing, with Pakistan firing rockets and using killer drones in a retaliatory strike against militants in Iran.

Today, we will see the EIA data for weekly US energy supply and demand at 10 AM. Seasonally, weekly ethanol production begins declining from mid-January into late spring. Recent Arctic temperatures across the Central US will challenge grind in mid-January, but it’s anticipated that ethanol grind figures in the week ending January 12 will come in around 306-310 Mil gal, up 3% year-over-year.

Bonds are pricing in a 50% probability (100% previously) of a Fed rate cut during the first quarter as investors are questioning cuts if the economy is strong and consumers are spending. This shift is supportive to the US Dollar.

The forecast into late January is broadly consistent with prior runs, with a wetter trend for Mato Grosso and Goias in N Brazil. It’ll be a bit drier in the southern states of Mato Grosso do Sul and Paraná. It’s not completely dry in S Brazil, but more rain is needed in MGDS following recent heat and dryness since January 1. Argentina’s crop belt remains dry and warm into January 28. There are hints of increased humidity after that, but the 11-15 day guidance features only very late rain and Southern and Western Argentina. Temps in Argentina reach into the 90s during the second half of next week. Argentina will be watched.

Live and feeder cattle pushed higher yesterday, with a firm outlook anticipated this morning. Early weakness in the February contract found renewed buying near $172 was lifted to close back near the best levels of the week and month. Negotiated fed cattle markets are quiet packers still sorting out weather-related logistical issues. Cattle feeders looking to sell show lists higher, with the South quoted $174-175, which would be a gain of $2-3 for the week.

The NASS will be out with the January Cattle on Feed report this Friday. Average trade estimates are looking for a December marketing rate of 99% of last year, a placement rate of 95%, and a January 1 feedlot inventory of 102%. The marketing rate is the lowest since 2015, and the feedlot placement rate will also be the lowest in eight years. Recent box beef strength is set to retreat as the harvest comes back to full scheduling of current supplies.