What started as a normal soft opening in the Sunday night trade for grains turned into an explosive rally for soybeans after 10 PM. Trump posted on social media that China has a shortage of beans, and the US will be glad to refill them with a quick quadruple in its soybean orders. This pushed soybeans well over $0.20 higher in the night session to trade back above $10.00.

The social media posts from Pres. Trump appears to be challenging China to secure US soybeans as a tactic with President. Trump looking to extend existing tariffs another 90 days by August 12. China’s media is silent on whether they will secure beans, and exporters know that if China were to secure a large quantity of beans, their crush/import demand would surely start immediately. This is the time of year when China does buy soybeans through January.

Soybeans are also taking support this morning from firming Brazilian values. Soybeans in Brazil are the highest for this date since 2018 as even with record production, farmers in the country are not making sales. Same as in the US, Brazilian farmers feel soybeans are undervalued and not willing to make sales. This same attitude is being shown with newly harvested safrinha bushels. This is the primary reason demand for US corn has not taken a seasonal downturn this year.

The trade is exceedingly bearish on grains, pricing a market that they believe lacks demand with growing supply. This creates volatility in our current trade, which opens up new opportunities with index funds, which are heavily margined on the short side. With the deadline for extending existing tariffs for another 90 days expiring on Tuesday, and the USDA crop data out at 11:00 a.m. CT, the next 30 hours will be very erratic during the day session’s with fresh input news that can make or break current trends.

The weather forecast for the Midwest into August 20-25 shows a cooling trend, along with no indication of any tropical storm activity that would pose a crop risk in the Gulf. It’s raining this morning in Kansas, and that front will turn eastward, with Midwest showers occurring in IL, IN, MI, and OH as it moves eastward into Thursday. Rainfalls of 25-.2.00” are expected over the next 10 days.

Feeder cattle futures fell the $9.25 limit on Friday after $10.00 gains from Wednesday into Thursday. After rising $13.00 above the feeder cattle index, the market tumbled on Friday due to profit-taking. Due to limited loss, expanded limits are in effect today with live cattle at $10.75 and feeder cattle limits at $13.75. Without a a negative headline story, cattle prices may look to find a bid if there’s a lower start and recovered modestly.

Last week, beef prices moved higher, with the bulk of the fed cattle trade developing late Friday, which was steady to lower prices. Live trade in the north was steady-$3 lower at $242-245, while dressed sales were steady at $380-385. Live trade in the South was mostly steady on the week at $235. Packers are doing what they can to slow kills and back up inventory to tighten up beef supplies and improve their margins. This is risky for the marketplace and could prompt cash weakness.

This morning’s trade, when the board reopens, will watch how index funds react to Friday's sharply lower losses. Sometimes they don’t care what the cash market is doing, other than liquidating if their computers say sell. Both live and feeder cattle futures likely set there seasonal August high last Thursday, August 7. Rallies will be viewed as recovery rallies to offer selling opportunities against those new resistance points.