Pres. Trump removes the 40% tariffs on Brazilian foodstuff, which includes beef.

Futures remain under pressure this morning with limited buying interest. Fundamentally, not much has changed this week, and if anything, the recent increase in Chinese export sales has improved the outlook, particularly for the soy complex. However, much of that support has been offset by the White House’s possible delay in removing incentives for imported biofuel feedstocks, such as used cooking oil. That policy shift had been a major driver of recent strength in the soy market, and with the outcome now uncertain, managed money is exiting the complex.

Weakness in the broader U.S. energy market is also weighing on soy oil. Grain futures are under similar pressure, with wheat leading losses as rainfall prospects improve for the U.S. Plains. Talks of a potential resolution to the Ukraine-Russia conflict are also a bearish factor for the grain complex. Overall, a lack of fresh news is keeping most contracts under light selling pressure, though improved trade sentiment continues to offer limited support.

As overnight trade continues, attention remains on the export market to see whether China continues to make purchases. Outside markets are also in focus after U.S. equity indices stumbled despite positive economic data, raising concerns that stocks may be overvalued. The firming U.S. dollar is drawing in whatever managed money flow remains.

December options expire today, and first notice day is next Friday. Most month-end positioning is expected early next week, with many traders likely to step away in the second half of the week. Yesterday’s stock market massive reversal after Nvidia’s strong earnings just to see the overall equity markets collapse, could become a concern if there is an acceleration of losses that redevelop today. Overnight losses were stemmed by comments from a Fed member on the jobs number (rethinking of fed cut still coming in December, but still not likely) helping lift equities. In equity break today will have spillover effects into the commodity sector.

Late yesterday Pres. Trump did what we knew was coming; we just didn’t know when. He finally removed the remaining food tariffs, which included the 40% tariffs on Brazilian beef., One has to wonder how much is already in the market amid this week’s extreme weakness, after learning of our increased cattle weight jumps in October. I have been targeting 207-209 for the December live cattle, which may get tagged today. Feeder cattle will be putting the 310 range to severe test and likely probe something deeper into the $300 value. Feeder cattle going under 300 require a Mexican border opening, but that’s not likely in our eminent future.

This morning, JBS is putting out a $ $25/CWT discount on heavy cattle. With improved imports, the need for fat cattle as heavy as we can get them ends. This will increase the front and supply of cattle as feedlots move to end their program of seeing just how fat they can make a steer.

Lost in the noise today will be the resumption of Cattle on Feed reports, with the last two months estimates of on feed being down 2% at 98%, placements at 92%, while marketings been running in a range of 93-96%. These numbers may be irrelevant when they are released on Friday after the close. A sharply lower start is anticipated this morning, and the market will sort out the end of tariffs on beef. In April, the 10% reciprocal tariffs went on, and in July, the 40% Brazilian tariffs went on. This helped create the explosive July-September cattle rage. The only thing left is when do the Mexican feeder cattle resume entry into United States.