Wheat continues on retreat despite further attacks on Russian oil infrastructure. Putin is quiet about any retaliation, even though he threatened it weeks ago.

Overnight futures trade was narrowly mixed, with grains trending slightly lower while soybeans posted modest gains. As expected, much of this movement stems from end-of-month, quarter, and year positioning. With this being the final full trading week of the year, traders are increasingly squaring positions. Technical factors are also beginning to influence the market, with stop orders near previous highs and lows adding to choppy action.

Conflicting outlooks on both demand and weather are also adding volatility. While China has already booked nearly half of its pledged 12 million metric tons of U.S. soybean purchases for the marketing year, some analysts remain skeptical they will follow through on the full amount. Additionally, questions continue to swirl around the U.S. soybean crush pace, which remains at record-high usage levels. The primary concern centers on soy oil stocks, given the White House's lack of direction on renewable fuel blending mandates.

Corn demand is also under scrutiny, with some analysts suggesting recent export strength may be front-loaded. However, with Brazil now indicating it may not have corn available for export until July, the U.S. could benefit from an extended window. Meanwhile, China’s SinoGrain is auctioning off 513,000 metric tons of stored soybeans today.

South American weather is improving for crops already in the ground, but little is being said about recently planted fields, where moisture will be more critical in the weeks ahead.

Outside markets are under pressure, contributing to broad commodity weakness. Global economic concerns have resurfaced, driven by soft U.S. consumer spending ahead of the holidays, particularly the trend toward discount retailers. Adding to the bearish tone, new data showed China’s factory output fell to a 15-month low.

As overnight trading concluded, grains remained in negative territory with soybeans trying to show a firm tone. In all of this, the US dollar is lower this morning after the delayed jobs reports were revealed, with the US dollar off $0.32 at 97.65. Further weakness in the dollar will eventually bring index fund interest into commodities, specifically grains.

Live and feeder cattle recovered yesterday, with January struggling to try and close over 340.00. That could change today; yesterday, the cash feeder index gained $0.60 to a 6-week high at $347.37. Yesterday, we began to see additional delayed COT reports for the week ending November 25, which showed the funds had sold 4,420 contracts of like cattle, bringing their position to 92,911 contracts. That was the lowest since October 2024 and reflected a 40% decline from the January high. The most significant liquidation continued in the feeder cattle market. Funds had reduced their net long position to just 16,048 contracts, the smallest since November 2024. Index fund ownership has declined by more than 50% since the late-July high.

Chart-based resistance today for February cattle remains at 231.50-232.00. Support if fed cattle went into correction mode is at 225-226. Feeder cattle stalled last week, halfway in the gap, at 345, with near-term support for any further liquidation developing at 334-335.