Trump's tariff repeal has the grain trade on edge.

This morning’s grain trade has wheat and corn on the softer side, while soybeans are trying to consolidate and recover from Thursday’s sharp losses. Soybeans are trying to find a footing on the hope that Chinese business will continue according to the trade agreement, whether by continuing to accumulate long futures positions, or some actual cash sales activity taking place (of which we have no reportable way of knowing at this time, with the government closed).

Yesterday, China ended export restrictions on CHS, LDC, along with grain terminal operator EGT, which were restricted last March when trading got underway. These three firms are now authorized to sell soybeans to China again, which is a nice start. The 10% tariff on soybeans remains in place, meaning private crushers will not buy US beans, but state-run companies can, as the tariffs do not apply to them.

The wheat trade remains softer, as the only big transaction outside regular business activity was China buying 120,000 MTs split between two classes. Of course, now the market asks what’s next, as recent sharp gains are corrected. There is noted potential South Korea interest in buying milling wheat.

The odds of the U.S. Supreme Court striking down Trump-era tariffs have jumped to 75%, adding a layer of uncertainty to global trade. Importers are backing away from U.S. deals, unsure if tariffs will be refunded if ruled illegal. The case could disrupt billions in collected fees and shift how future administrations use trade powers. Until the Court rules, buyers and markets are staying cautious. Pres. Trump can apply other sections of code for tariffs, those take more time to implement.

Traders are beginning to position ahead of next Friday’s USDA WASDE report, which will be the first in two months. There’s a broad range of expectations regarding what the agency might release, but the prevailing sentiment is that both corn and soybean production estimates will be revised lower. The lack of fresh market-moving news is keeping trade volume subdued.

One notable development is the firmness in interior basis values, suggesting ongoing strength in local demand. However, a softening trend in the Gulf hints that export interest may be fading amid current tariff uncertainty and SA's price competitiveness. With limited new inputs and mixed signals from cash markets, a day of choppy, two-sided trade wouldn’t be unexpected.

Another sharply lower session in cattle yesterday, but not anymore with a limit status. Liquidation could be nearing an end for the time being, and finding a near-term stability point with such discounts to cash. Yesterday’s cash feeder index gained six cents and is at $3 49.48 with November feeder cattle at a $27 discount. Negotiated fed cattle yesterday had light trade on Thursday with sales in the South off $2 from earlier week action and taking place mostly at $230 with dressed sales in the north at $355, which had slipped $3-4 lower than last week. Box beef had choice values yesterday, off $0.29, while select gained $0.51.

As was the case over a week ago, the current free-fall could be in an area where a bounce could occur again. Moderate as it might be, it could offer a recovery in a highly oversold condition. The first sign of index fund liquidation near-term ending would be a higher closing price for live and feeder cattle than the opening price. Longer-term targets for live cattle remain 308-310, and for feeder cattle, 295-305.