Soybeans await Chinese Flash bean sales.

Soybeans bounced overnight, but the lack of fresh news keeps trade mixed, with most of the current action focused on position adjustments rather than fresh directional conviction. One of the dominant storylines remains South American weather, where drought conditions are expanding and stressing key growing regions. Rain is in the forecast, but it's arriving just in time, or possibly too late for some areas if missed or backed off. Not all parts of Brazil and Argentina are expected to benefit from these showers, which is why we are seeing crop estimates begin to ratchet lower. While Brazil's total production is still expected to top last year, the gap is narrowing.

This lingering weather stress is offering underlying support to futures, but the absence of Chinese buying interest is keeping a lid on rallies. China was active ahead of Thanksgiving, purchasing multiple soybean cargoes, but has since largely disappeared from the market. The White House insists China remains on track to meet its soybean purchase commitments, but traders remain skeptical. We are expecting another round of delayed export sales data this morning, which may offer further clues on the current demand situation.

Soybean oil continues its downward slide toward the 50-cent mark, while soybean meal is positioning itself to take the lead in the soy complex. Basis levels in both Brazil and Argentina are firming, and domestic U.S. tightness remains unresolved. If U.S. crushers can’t pry beans loose from farmers, what happens if plants don’t run as hard as previously assumed?

Meanwhile, Argentine soybean supplies are quickly dwindling. At the current export pace to China, Argentine crushers and exporters could be effectively out of beans in just a few weeks. This supply vacuum may elevate U.S. meal demand, especially if Brazil’s early harvest pace is slow or quality is compromised by recent weather.

Trade will start to see more estimates ahead of next Tuesday’s WASDE report, and while typically a non-event, the December balance sheets may see more interest this month. Export sales this morning showed another solid week of corn at 2 MMTs, soybeans 1.25 MMTs with wheat over 500,000 MTs. This morning, Stats Canada data came in at expectations with canola at 21.804 MMTs, and all wheat at 39.95 MMTs. All data was mostly neutral to expectations, with wheat near the higher side of the estimates. The Fed will also meet next Tuesday and Wednesday, with the odds of a rate cut now at 90%.

Cattle futures again pushed sharply higher yesterday, led by feeder cattle, as word arrived that another New World screwworm-infected animal had been found 20 miles south of the Texas border. This is again keeping the conversation about the Mexican border reopening at bay. Also, the CME index for feeder cattle jumped another $5.42 and is now at $ $337.78. We are now discount again on the feeder board.

Some light cash trade was reported at $343 on the dressed basis, a gain of $14 over last week, and at a live equivalent of $218. Offers in the South are quoted at $225 with no interest from the Packers. Boxed beef remains mixed, with choice off $0.91, while Select gained $2.34. Live cattle February traded into present resistance and the 223 range, with more short-term extreme resistance on the charts at 226. Meanwhile, feeder cattle now have their eyes set on the large gap at $340-348 we have been discussing for well over a month.

A large share of cattle options expire tomorrow, comprising of over 30% of outstanding options that were hedges and are out of the money quickly. May be interesting.