Another night session that grains love to rally in. Will the seller vigilantes prevail again in the day session.

Grain futures produced another plus side night session, which again will have to tend to the day session seller vigilantes. Strength came overnight as Pres. Trump and his call for 10% tariffs on Europe starting February 1, as he put together a framework deal with the US to provide security via more bases in Greenland to build the Golden Dome for early warning protection against Chinese and Russian threats. While there are still no major details, the main takeaway is that the US is no longer considering acquiring Greenland through ownership.

Dryness is now attracting the attention of traders in southern Brazil, but more importantly, southern Argentina. A lack of rain is becoming more of a factor as some of the driest regions of both Argentina and Brazil continue to miss rains that are always plentiful in the 11-15 day forecast, which the Bears always tout daily, but never get pulled forward.

Weather in the US is also a market topic, mainly the dry conditions for US winter wheat. Bitter cold temperatures are also a factor that will impact cash markets. Very little movement is expected across the interior market for the next week, tightening commercial inventories.

Flash sales continue almost daily, and we are likely to see something for corn again this morning, while beans find sales to locations other than China after China having fulfilled its 12 MMT obligation. More buying from China would be considered bullish.

Ethanol demand remains positive with margins 5-$0.10/gallon, but cold weather will inhibit a repeat of what had been a record grind reported last week. Meanwhile, bean crush margins are at a five-month high at $1.71/Bu.

The cattle trade had seen a two-day modest lift this week, after Friday’s large break. This is a bit negative, if the market was extremely bullish that rally would've recovered almost 70% to all of those losses, and this could bring renewed selling interest today, with live cattle stalled on the April contract well under 237, while feeder cattle remain stuck under 361. The cash feeder index was down $0.27 yesterday, closing at $367.41. The cash feeder index could be setting up a double top.

This Friday’s COF report at 2:00 p.m. CT is expected to have Placements around 93%, a Feedlot Inventory near 97%, while Marketings are anticipated near 101.5%. This data out is bullish on paper as it is the smallest December placement rate since 2015 and the smallest inventory since 2017. But we are at historical highs, which may have this priced in. If weakness develops today, targeted support for April cattle is 231.50-232, with critical support on March feeders at 333.35-334.00. We have recommended implementing hedges on the new-year strength, which is now fading.