Recovery in grains overnight is moderate on US/Chinese trade news.

Pre-weekend short covering is providing some much-needed support to the market as we head into the week's final trading session. Long liquidation has pressured prices throughout the week as traders exited weaker positions ahead of Monday's key reports. Market participants are well aware of the potential for sharp price swings following the release of the June stocks and acreage data, where limit moves are not uncommon. Monday also marks first notice day and the end of the month and quarter, all of which contribute to elevated positioning.

This morning, news from the White House indicated that a trade deal with China was finalized. While it primarily reinforces existing agreements, the market is treating it as a constructive development. The Chinese trade deal is mostly focuses on the release of rare earth metal and magnet exports into the US, the US lowering restrictions on semiconductors, and also allowing Chinese students to attend universities. At this time, there is no inclusion of US ag goods in the pact. Additionally, the administration has submitted a revised trade offer to the EU, signaling continued engagement. However, trade talks with Japan remain sluggish, with both sides still far apart on key issues.

Weather is becoming a more prominent concern in the grain trade. Even with recent rains, large portions of the Western Corn Belt are facing low subsoil moisture levels just as crops enter more demanding growth phases. In contrast, other areas of the country are dealing with too much rainfall, which has also hampered production. A growing sentiment among traders is that the crop is shaping up to be “good” rather than “great,” despite USDA projections that continue to reflect strong production levels in their balance sheets.

Monday is set for a volatile session, as headlines on the US/China trade deal develop, they could cause a rebound in hope along with the proximity of Monday’s NASS June Stocks and Seeding’s Report at 11:00 a.m. They have wide-ranging guesses, yet the averages are still tied to the March 31 acreage data. There will likely be surprises with any acreage gains to one area dramatically impacting another grain, as total acreage increases are not anticipated.

Live and feeder cattle futures put in a firm trading session yesterday, and with outside markets favorable today, it’s anticipated that cattle will have a firm start. Yesterday’s feeder cash index picked up $0.79 and is now at $were three one one .39. At this time of the year, typically August feeders would carry a $3-10 premium to the index, but it is currently $ $8 below. If we go back to June 20, 15, to find a discount this wide, and of course, that was the year that marked the top, and that decade's cattle cycle, which had seen levels decline throughout the year.

Yesterday, we had seen cattle in Kansas trade $225 per cwt, $4 lower on the week, at $225, with dressed trade in Nebraska at $368, $9 lower than last week. June cattle expire on Monday, and seem to be hovering at $222, anticipating Texas cattle to trade into that level. The market continues to anticipate that egg Sec. Rollins is working aggressively to get the Mexican border open to access over 100,000 head of feeder imports back on track per month.