Grains are mixed after a mostly firm night session.

Grains are mostly higher overnight, with hard wheat the leader, while soybeans found a new recovery high before retreating in the morning. Export sales were considered as expected from estimates this morning. Mexico was a featured buyer of corn, with China being the future buyer of soybeans.

There have been rumors that China is buying cash wheat globally and they have been buying multiple grains at record levels. This could be in preparation for a geopolitical event, but time will tell as it is hard to put much stock in the information they provide. The USDA attaché to China said they are conservatively estimating 23/24 Chinese corn imports at 20 MMT. The attaché noted that summer rains helped China’s corn crop coupled with the government’s increased prioritization of grain production to protect food security.

China is working to pick up and build support for consumer demand by expanding access to commercial bank loans for 10-15 year durations to property developers to repay bonds and cover operating expenses. This helped shares rally in China as Asian developers needed new liquidity. The new loans cannot be used to secure property or start new buildings that would add to the existing glut of office space or housing. This week, China has also offered other new aid for its economy to support consumer confidence in strong demand. This helped crude oil push a new overnight high above 76.00.

The media is not carrying the story of French farmers protesting government bureaucracy, rising costs, and cheap imports. They blocked roadways with tractors and hay bales and emptied truckloads of vegetables on highways. Top French ministers are meeting to discuss the situation.

The South American forecast remains in a status quo position. Rains of 4-9.00” occur across Northern Brazil, while dry weather and heat stay in Argentina for extended periods. Far southern Río Grande do Sul will also be involved in below-normal rainfall and above-normal temperature patterns. Building dryness across Argentina while soaking rains continue to fall across Northern Brazil on their soybean harvest has sparked interest in what the total crop size can attain. Argentina's 11-15 day forecast is slightly wetter than the prior day's forecast, but the trend of below-normal rainfall continues to be the overriding pattern. It’s imperative that regular rainfall returns to Brazil in February to prevent yield losses.

Another firm day yesterday for live and feeder cattle futures with new recovery highs from the December 7 lows. March feeder cattle are now at their highest price since early November. The cash feeder Index gained $1.74 to a 10-week high of $230.21, and it’s also $15 over the early December low. January feeder cattle expire at the end of trading today.

USDA Cold Storage as of Dec 31 showed beef stocks of 485.127 million lbs, pork stocks of 427.300 million lbs, and chicken stocks of 880.091 million lbs. This marked the 11th consecutive month that stocks were below last year. December stocks are the lowest since 2019 and the second lowest since 2014. Seasonally, stocks peak in December and fall into late spring/summer. Cattle futures continued to vacillate with an upward bias still in place. April cattle are targeting a challenge of 179.50-180.00 in the short term.