Soybeans recovered overnight, with soybeans and grains trading near the week's best values.

Overnight futures are mixed, with grains under mild pressure while soybeans are seeing moderate strength. Most of this movement continues to stem from pre-report positioning ahead of Monday’s key USDA data release. Trade is also wrestling with conflicting fundamental narratives, especially regarding weather and crop expectations.

South American weather remains uneven; some regions are trending dry, which is beginning to slow planting and hamper early development. Meanwhile, other areas are on track for record-large crops, adding uncertainty to the broader production outlook. Similar inconsistencies are showing up in the U.S. wheat crop. While the Southern Plains stay dry, the Northern tier has benefited from ample rainfall, widening regional disparities.

Looking ahead to Monday’s USDA reports, the market is split. Many anticipate a reduction in corn and soybean production, but others argue that demand projections are too high and should be trimmed. Ultimately, it will come down to the stocks-to-use ratios, those figures will drive the market’s reaction far more than any single data point.

Elsewhere, traders are watching for potential headlines out of the Supreme Court today, which is expected to release opinions. There’s speculation a decision could come down on U.S. tariff policy. Current market pricing indicates only a 28% probability that tariffs remain intact, which means any surprise ruling could trigger significant volatility. The president has promised he has workarounds that will continue to maintain his negotiating strength; it’ll just take time to produce them. The monthly unemployment number this morning showed unemployment at 4.4% versus an estimate of 4.5% (November was revised lower from 4.6% to 4.5%). This will support the anticipated Federal Reserve interest rate cut later this month.

Cattle futures tumbled lower yesterday morning, making new lows on the week as it grappled with Mexico lifting its quotas on Brazilian beef and putting its import tariff at zero. Improving cash trade prospects, though it reversed earlier losses, helped the market settle higher for the session. Also, the feeder index jumped to $368.07, up $4.92. This is now within $10 of the record high that was reached last October.

Carcass weight reports show that the industry continues to offset fewer animals with record heavy weights. During the holidays, we saw weights of 982 pounds, 26-29 pounds heavier than a year ago. This puts the steers at 50 pounds over the 5-year average. Yesterday’s choice cutout was up $2.58, while select gained $2.78. Cash trade has bids at 228 but is expected to trade near 230.

Feb cattle had a session low of 233.12, which now provides support at that level versus the breakout point at 232. Resistance remains stout at 238. Feeder cattle in March have now reached a support level of 353. Resistance on the March feeders is 361 (the 78% retracement on the March contract) and 365 (the 78% retracement on the continuation chart).