Corn maintained strength overnight on rumored Chinese buying interest.

This morning’s grain trade had the morning session, and with corn again leading the strength, followed by HRW wheat. Soybeans were steady. Export sales numbers this morning were solid, with corn at 1.792 MMTs and soybeans at 1.106 MMTs. Corn continues to impress not only with sustained strong export sales but also with weekly ethanol grind. There are rumors that on Wednesday, China was looking for several cargoes of corn out of the PNW for March and April shipment. Flash sales will be watched this morning for that.

Pessimism remains over the grain trade, as many question China’s trade deal (not yet a signed agreement), but Chinese buying continues. The soft red winter wheat sale that was reportedly washed out yesterday by China could be tied to massive rains in the soft white wheat region, which are hampering loadout in the Pacific Northwest. The pounding rains at West Coast facilities are making it difficult to export from the largest terminals and may be part of the reason for the washout sale. China may be back for wheat again, as they love cheap wheat, and we certainly have that.

Brazil's weather is generally favorable, particularly in the north. Central and southern Brazil are experiencing slightly more drought stress, and Argentina is now drying as well. While not a major drought, this raises questions about current crop estimates. These are also classic signs of a La Niña. 

Tensions in the Black Sea escalated this morning after Russia made new demands for more Ukrainian territory, casting serious doubt on the viability of the peace deal. At the same time, friction between the US and Venezuela is intensifying, drawing global market attention. Fresh headlines remain limited, and trade volume is tapering off, contributing to an increasingly choppy, directionless market tone.

Cattle futures stalled out yesterday and closed lower, possibly some hedging up ahead of Pres. Trump’s evening TV chat, in case he talked about beef prices. Also, new estimates for Friday’s COT report indicate some thinking placements could be over 90% of the year ago, up from 84% perceived earlier in the week.

Yesterday’s cash feeder index came in at $349.79, a gain of $0.94. Negotiated fed cattle markets are still looking for direction, with the South asking $233, a $3 gain on the week if they can pick it up. The COT reports for the week ending December 2 show funds now have a long position of 82,208, down 42,006 and 93 contracts in eight weeks. The commercial net short position is reduced to 34,453 contracts. Seasonally, cattle futures are strong in December and through the holidays. Still, this sharp rally began 10 days earlier than normal, allowing choppiness to enter the trade during the upcoming thin holiday trading. Keep in mind that a lot of market makers close their books at the end of the last full trading week of the year.