Grain prices eat up Turnaround Tuesday's correction.

After yesterday’s rumble and setback into the close, soybeans immediately from the night session opening pushed higher, followed by the grains.  China is likely to be active again in looking for products. The building view is that China may be in for more than 12 million metric tons of soybeans, as currency valuations with Brazil are making it feasible. Also, there is concern that even a slight decrease in US soybean yield in next week’s WASDE crop production report could affect the complex.

It’s also being noted that the trade is now starting to accept that corn demand and importer interest are not front-loaded, as has been advertised for months. It’s the ongoing demand that could surprise many as we enter the second quarter of export activity. China continues to auction its government corn reserves, with buyers taking nearly all bushels offered. We are also seeing China continue to import wheat and large amounts of sorghum, which casts doubt on whether China’s usable stocks from their supposed bumper crop are in question.

Next week’s WASDE report could be more interesting than usual, and this already tends to be one of the most influential balance sheet updates of the year. It’s also worth noting that geopolitical developments involving Russia and Ukraine, who are still fighting aggressively, and we are also seeing the start of the Goldman role, along with a possible Supreme Court tariff decision this Friday, all add to our current volatility.

Another push higher yesterday in cattle futures, with feeder cattle achieving new recovery highs while live cattle stalled at the prior day's resistance. Still settling higher, though, across the board as we continue to rally into the first full trading week of January. Feeder cattle saw a sharp recovery in the index, rising by $9.07 at $362.17 as the holiday slump in available numbers was removed. The one-day number was at $364 on 10,852 head. Fed cattle supplies will be higher this week, while estimated beef Packer margins are deep in the red. Estimates are that the Packers are losing $114/head, which is the lowest weekly number since February 2015. Fortunately, they have chicken to make up for the losses. Yesterday’s box beef trade softened, but the board is optimistic about a better price this week.

On the charts, live cattle are close to major resistance at 238.50-240, while March feeder cattle have a 70% retracement on their charts near 361, with the continuation chart offering the same Fibonacci number near 365. Historically, there is a 70% probability that live and feeder cattle board prices rally in December and stall out during the first week of the year, with the rally possibly carrying into the next Monday, January 12. There is a tendency to seasonally soften into the end of the month. It is not a perfect seasonal, but a 70% probability gives it weight. (It did not occur in 2024, as cattle prices collapsed into early December 2023, with recovery having just gotten underway in December, and 2025 was the start of the flaming bull market.)