Corn is set to close steady to better on the week, while wheat and soybeans are lower.

The grain trade is softer this morning, despite what would’ve been considered productive closes yesterday in corn and wheat, especially after wheat closed positively yesterday after the Rosario Grain Exchange raised its wheat estimate to 27.7 MMTs. This morning there is little negative pressure on the market except for just lack of support.

Soybeans this morning are seeing the heaviest losses, even though solid export demand and soybean flashes continue, but the concern seems to be that China is already 60% purchased and will not take more than 12 MMTs of beans for now, even though the USDA has them scheduled for more through the crop year. We need outside exports from other than China to pick up on US beans later in the year, but with the oncoming Brazilian soybean crop at cheaper valuations, the concern is that it will not take place.

The Fats and Oils report showed us a build in soy oil reserves, with uncertainty in the US renewable fuel usage outlooks keeping buyers at bay for soyoil. Census Sep exports 104.94 mbu. Sep exports are the 2nd largest on record. Census Sep exports 274.7 mbu. Sep 25 exports increased by 61% from Sep 24. Census Sep export 118.68 mbu. Largest Sep exports in 12 years.

Mixed weather reports from South America are also weighing on the soy complex, as some regions of Brazil are experiencing crop stress, while others are experiencing favorable growing conditions.

Grain losses are less this morning because global demand outlooks are more favorable for those contracts, while world grain quality is low and imports will be needed for blending, primarily in China. Some analysts believe South American weather will have a greater impact on corn production, which is also providing support for those contracts. A lack of engagement is weighing on several markets this morning. Trade is already focused on the upcoming holiday break and the January WASDE report for the next big data release.

It was a strong session in live and feeder cattle yesterday, with feeder cattle gapping into the gap. A bullish development, especially with the cash feeder index higher again yesterday by $1.44, hitting a five-week high of $345.47. The feeder index quickly went from a discount of over $6 died 00 to almost right on par with the feeder index.

We began to see negotiated fed cattle trade yesterday, with sales in the north jumping $7 higher on the week at $230, while live sales in the South gained $6 for the week at $230. Meanwhile, we are seeing beef prices continue to decline as seasonal demand begins to contract. Although both are at record levels, the choice cutout continues to drift. 

February live cattle are into resistance, and if it gains further, the center of the Fibonacci retracement “box” would be 235. Meanwhile, feeder cattle have a gap that plugs just above 348, with 351 a 62% Fibonacci retracement of the fall collapse. Live cattle are inside a seasonal trend that typically sees prices elevate from early December into the closing days of the month. Breaks look to be supported with an upward bias until the new year.