The first full week of trading brings buying interest into grains. WASDE report next Monday.

Corn, soybeans, and wheat are all starting the week with gains as fresh managed money flows back into commodities. Last week’s oversold conditions across the grain complex are drawing in bargain hunters, and with volume returning to more normal levels following the holiday lull, the market is finding more price discovery.

Support is also coming from sharply higher outside markets. Gold is up more than $90 per ounce and silver has gained over $4 in early trade. These moves are being driven by safe haven and risk-on buying after U.S. military action in Venezuela over the weekend, which has elevated geopolitical risk across markets and boosted interest in hard assets, including agricultural commodities.

Weather concerns in South America are also moving into sharper focus. More signs of La Niña are emerging, increasing the perceived need for a risk premium, especially for crops in Argentina, where dryness and rising heat are beginning to affect yield potential. Argentina is hoping to receive rainfall this coming weekend. Brazil's forecast is also being closely watched, with spotty rainfall expected across some key growing areas.

Looking ahead, the market will turn its attention to the January WASDE report due next Monday. This report includes final U.S. production numbers and quarterly stocks, making it one of the most influential of the year. Pre-report positioning is likely to dominate trade later in the week, and early estimates are beginning to circulate. There’s a growing debate among analysts over whether the USDA has fully captured current demand trends, particularly for corn and soybeans, with some suggesting that disappearance figures may be understated.

Year-to-date US corn commitments are 49.8 MMTs, and the corn export estimate through September 1 is 81 MMTs. The USDA estimate is likely too low. Corn values are rallying in China, and the prospect of US exports to China will build in the coming months. The November soybean crush number was 221 Mil Bu, and the crush was the second largest on record. Soy oil production was down 8% from October. Soy crush margins are $1.48/Bu, and the year-to-date crush is up 8% at 606 2.5 Mil Bu.

In short, fresh money flow, higher trade volumes, strong external market influence, and rising weather and demand uncertainty are all contributing to a firm tone in early-week grain trade.

Live and feeder cattle ended last week on exceptional strength, making new recovery highs from the fall price break. Further news of New World screwworm infections 200 miles south of the Texas/Mexican border keeps the prospect of Mexican feeder cattle coming anytime soon on hold. Meanwhile, last week’s feeder cattle index started out strong early in the week but finished off $0.50 because auction activity has yet to reflect true demand. Last week’s negotiated fed cattle trade had both the north and the south higher by $2, with 232 in the north and 231 in the South.

Technical breakouts of a multi-week congestion trade have live cattle targeting 238-240, with feeder cattle having the next threshold at 360, which is a 78% retracement on the March feeder cattle contract, and 365 is a 78% retracement for the continuation chart. In all the volatility, support now is prior resistance for Fed cattle at 231-232, while March feeder cattle now have support at 341-342.