Grains attempt another overnight rally. Will they retain the strength in the day session?

Futures are posting gains in overnight trade as light buying persists across the board. While fresh headlines are sparse, the market is still digesting a busy week of data. Export demand for U.S. corn and soybeans remains impressive, and traders are watching for additional flash sales today. With the volume of recent soybean business, questions are surfacing over whether USDA may have been too quick to cut export projections in Monday’s report.

Soybeans are also drawing support from mounting crop concerns in South America. Brazil’s production estimates continue to slip, and crop ratings in Argentina are under pressure. There’s growing belief the region’s total output could fall short of current expectations.

U.S. corn quality is getting more attention. Reports of light test weight corn are widespread, no surprise given the season, but it’s a critical detail. Low test weight distorts both crop size and feed usage, and could impact demand and carryout assumptions down the road.

China and Canada have worked out a breakthrough in trade relations which will restart canola and currency trade. This has allowed canola futures to add to recent gains, helping veg oil markets continue to strengthen.

Outside markets are back in focus as the banking industry pushes back on proposed interest rate caps on credit cards, warning of ripple effects on credit access and overall economic growth. The Federal Reserve meets January 27-28 for what is expected to be ¼% interest rate cut.

Just a reminder that U.S. markets will be closed on Monday for Martin Luther King Jr. Day. Trade resumes Monday evening.

Cattle futures pushed higher yesterday, led by the feeder cattle index, jumping two new recovery rallies, with March feeder cattle close to expected resistance at 365-370. This occurred even as the cash feeder index drifted by $0.27 yesterday to $369.42. Live cattle futures rallied but came up short of early-week highs. 237.50-238 continues to remain resistance for spot February cattle. 240 is a more important resistance target. Support is at 232 on February cattle, which is their breakout point.

Box beef values jumped again yesterday, with choice gaining $2.24 at $360.77, while select rallied $2.06 at $359.71. Meanwhile, any meaningful negotiated cattle trade has been held off until today. There is concern that demand will start to slip as consumers become aware of their holiday spending, imports of beef are on the rise, and, of course, there is the nagging thought of when more discussion will develop about the Mexican border being open to feeder cattle. Mexico is striving to meet its stated goal of being Screwworm-free by mid-2026. Exports to Mexico will start to slip as they focus on the tariff-free beef they are now going to allow from Brazil.