Friday's day session gets underway with mixed expectations.

After a mostly softer night trade, grains went out with a mixed morning close. Some of today’s trade will be positioning ahead of the next two weeks, with possible short-covering developing in soybeans and wheat. Corn is maintaining its strength on the week as ethanol margins remain near five-year averages. Also Ukraine exports are slowing, with loadings for December at 360,000 MTs for wheat.

The U.S. continues to make daily flash sales, and China is quickly closing in on its 12 million metric ton soybean purchase target. At the current buying pace, that threshold could be reached within just a few weeks. What’s more intriguing is China’s recent surge in corn and wheat imports, which comes despite official claims of a bumper domestic grain crop. This uptick in demand is likely tied to ongoing disruptions in Black Sea exports, and we’re now seeing more imports arriving via the Pacific Northwest as buyers seek to secure supplies.

The EPA forwarded its final Clean Fuel Production tax credit, which is the 45Z proposal, they have given it to the White House for review. There are expectations that we could see the release of the guidance before the end of the year. Meanwhile, the EPA’s biofuel blend targets will remain available until sometime in the first 90 days of 2026.

This afternoon, the Commitment of Traders report will have us updated through December 9. It’s thought that the soybean position is liquidated down to 130,000 contracts or less.

South American weather remains mostly favorable for crops, but there are growing signs of a developing La Niña, which could alter conditions later in the season. This may show up in Argentina as we enter January. Meanwhile, outside markets are relatively quiet, offering little influence on the agricultural sector at this time.

Yesterday’s cattle trade softened early with a mild recovery off of early session lows occurring late in the day. Deliveries of over 20 contracts tendered from Nebraska kicked off the selling early in the morning. Yesterday’s cash feeder index showed a gain of $0.26 at $350.05. The negotiated fed cattle trade started on Thursday, with trade in the north picking up $1-4 on the dressed side at $3 and 55-358. The South remained untraded, but we saw some cattle move in Nebraska and Texas at 227-228, $2-3 lower than last week.

This afternoon, the December COF report is released at 2:00 p.m. CT, and average estimates have marketing at 88%, placements at 92%, and the December 1 feedlot inventory at 98% of a year ago. Feeder cattle hit critical support yesterday at 331-332, which needs to hold; otherwise, something concerning is developing on the Mexican border that would push it to such discounts relative to the current cash index. Keep in mind that March feeder cattle are not cash-settled until 100 days from now. Yesterday marked the second 2-day correction since bottoming in late November, and buying needs to resurface today, which is typical in a strong uptrend.