Silver leads the metal decline overnight, with stock indexes and grains following.

Corn, soybeans, and wheat overnight started the week on a firmer note than fell into selling pressure that continued throughout the night, mirroring broader weakness across several commodity sectors. The sharpest declines are showing up in metals, where managed money is quickly exiting long positions. At the same time, energy markets are attracting renewed attention, with some contracts rebounding from technically oversold conditions.

Ongoing conflict continues to hamper grain exports from the Black Sea region. Russia’s wheat exports are now projected at just 53 to 55 million metric tons for 2024/2025, a significant drop from the 70 million tons shipped in the previous year. Meanwhile, Ukrainian port activity is operating at just 20 percent of capacity, hampered by power shortages and infrastructure damage.

With markets still in a holiday lull, much of the early-week trade is expected to center on squaring positions ahead of month-end, quarter-end, and year-end accounting. Except for New Year’s Day, all sessions this week are full trading days. No night session for grains on Wednesday and Thursday evenings. This week also includes the first notice day for January contracts on Wednesday, adding to the repositioning activity. Notably, the U.S. has not recorded a flash sale in over a week, and this lack of new demand news is contributing to today’s weaker tone.

Weather conditions in South America are regaining the market’s attention. Argentina is forecast to remain hot and dry over the next two weeks, and Brazil is also experiencing some developing dry conditions. However, rains are expected to return to Brazil by the end of the week. These evolving conditions are consistent with a developing La Niña pattern and could become a more significant market factor if dryness persists.

Last week’s livestock trade consolidated a sharp rally that began in the last week of November, when a vacuum bottom formed. The cash feeder index (just over 353) is trading at a significant premium to the active March contract, reflecting expectations that the Mexican/US border could reopen at some point in the new year.

Last week’s box beef values slipped lower, with the choice cutout tumbling $10.42/CWT and select off $2.22. Meanwhile, the cash trade in the North was $230, up $2, while the trade in the South was also up $2 to $229. Live cattle February need a solid close above 232 to break out to the upside, with March feeder cattle having the gap at 343-348 producing resistance. On the support side, February cattle need to hold 226 and March feeder cattle 336, both on a closing basis, to avoid a technical breakdown.