Monday's strong gains held for the most part overnight, with soybeans gaining further.

Grain markets are drifting slightly and are mixed in overnight trade, while soybeans are clinging to modest gains. Yesterday’s rally hasn’t drawn much follow-through, but sellers aren’t stepping in aggressively either. So far, a typical “Turnaround Tuesday” has not materialized.

The broader tone feels like a market searching for direction. With futures having approached technically oversold territory last Friday, downside pressure is fading. At the same time, attention is shifting toward positioning ahead of next Monday’s major USDA reports, the January WASDE and quarterly grain stocks. These will lock in final U.S. crop production numbers and shed light on early-season usage. Traders are likely to take a defensive stance and reduce exposure ahead of those releases.

Fresh headlines are scarce, a typical feature of the mid-winter grind. South American weather remains a study in contrasts: Brazil picked up more rain (possibly too much in some areas), while Argentina stayed hot and dry. In the meantime, the US Plains continue to experience above-normal temperatures and remain dry. Leaving the crop susceptible if an extreme cold snap develops in February/March.

Despite harvest activity beginning in Brazil, interior soybean prices there are firming, helping U.S. beans remain competitive globally. There is expectations that China may have booked up to 10 U.S. cargoes yesterday. Meanwhile, several Brazilian exporters are reportedly backing out of the Amazon soy moratorium, which could be a tailwind for U.S. exports if global buyers shift to more sustainable supply chains.

Volume will likely stay light until we get closer to Monday’s USDA data drop, but with some risk premium returning and China back in the market, the tone is more balanced than bearish for now. Managed money is showing a willingness to buy low volatility and below cost of production prices. Corn exports are 64.8% above last year and at 1.06 Bil Bu. Ethanol margins remain at 5-$0.10/gal.

Live and feeder cattle futures found follow-through buying on Monday after Friday’s sharp lift. Later in the day, gains were checked, but solid closes were still achieved. The cash feeder index jumped $2.89 to $353.11 after correcting last week. We now have futures ahead of the cash index, which hasn’t happened in a while. Box beef prices saw follow-through buying again yesterday, with choice up $3.73 and select up $4.58. The choice/select spread basically is saying beef is beef. This is typical when markets are tight, similarly, when low-quality wheat gets hauled to town and is taken with little discount when supplies are tight.

February cattle are targeting 238-240 as the next major upside resistance point, while near-term support now resides at its breakout at the 231.50-232.00 range. Feeder cattle are now in search of the 78% retracement of the fall decline which on the March contract comes in at 361, but on the continuation chart at 365. After having risen so rapidly, light support on March feeders is 353.00, while major support develops at 346-347. With large volatility, comes large ranges between support and resistance.