Corn leads overnight recovery bounce. Meanwhile, metals continue to soar.

The grain trade managed a slight bounce in the overnight session, as crude oil rallied $1.00 off yesterday’s lows on renewed Russian oil sanction talks if they do not accept the current peace agreement. By morning, the advances were limited to fractional gains or losses with spot corn up 1.6 cents..

The recent two-day wheat price collapse has occurred after China washed out its November purchase, and the Algo rhythm computer trading systems believe that a Russian/Ukrainian truce is at hand. Unfortunately for algorithmic traders, any truce, if it occurred, would not increase wheat supplies from the Black Sea region, as they are already operating at maximum capacity. Logistics of transporting wheat to the borders are difficult, especially given the destruction of Ukraine's electrical infrastructure and the availability of only generators at the ports.

South American weather is being described as favorable for established crops, raising questions about which crops should be planted, particularly safrinha. Argentine soybean crop ratings posted declines over the past week Meanwhile, the export pace of corn remains high, and yesterday’s price drift only brings in more buyer interest. Although interior processing margins have fallen slightly, cash markets remain firm due to light country movement. Movement is unlikely to build for the next two weeks without incentives, especially with futures under pressure. Gulf basis firmed on soybeans yesterday and was a touch softer on corn.

We are approaching the halfway point of the final full trading week of the year, and soybeans have plugged gaps from the initial knowledge of a trade deal making with China. Soybeans are meeting technical retreat targets, even as China continues to buy soybeans. Courtesy of the grain trade selloff, they’re getting a better deal on the last half of their 12 MMT commitments.

The old saying that when “the bears have Thanksgiving, the bulls get Christmas” has never been more apt. The grain trade is becoming exceptionally oversold technically on wheat and soybeans, with corn holding its November lows. The 5- and 15-year seasonals are notably higher from now through January. We showed this in yesterday afternoon’s video. The next planned information release affecting grains is the January 12 crop production and wheat acreage report.

Live and feeder cattle future prices gap higher yesterday, but live cattle struggled to maintain gains. Feeders had seen the index gain $1.48 to a 6-week high at $348.85. Meanwhile, the negotiated cattle trade is expected to remain steady this week, with offers in the South at $233, a $3 gain over last week. Packer interest so far looks minimal, as the deliverable December board hovers in the 230-231 range.

In yesterday’s strength, resistance held on the February cattle currently in the 231.50-232.50 range, while January feeders approached last week’s resistance near 345.00 and stalled. There is a gap still present in the 345.00-348.00 range begging to be plugged. 351.00 is the 62% continuation chart recovery Fibonacci number. March feeder cattle will come on to the continuation chart next week at a 5.60 discount currently.