Grains consolidate Wednesday's gains. Lower production numbers are anticipated for Monday's crop report.

This morning’s grain trade is consolidating yesterday’s strong gains. Export sales data released this morning reflected holiday reductions, while soybeans maintained a reasonable 800,000+ MT in sales, supported by China’s ongoing activity. Position squaring continues ahead of this Friday’s Supreme Court ruling on Pres. Trump’s tariff authorization, along with the January WASDE Crop production report, will be out on Monday. Lower production is expected for corn and soybeans, with soybean ending stocks watched closely. Acreage reduction on winter wheat is also anticipated.

Managed money interest is increasing as the Bloomberg Commodity Bureau Index re-balances. Part of that rebalancing is the liquidation of silver and gold holdings, while corn holdings will rise from 4.5% to 5.5%. A small uptick in wheat from 2.25% to 2.75% is also anticipated. Meanwhile, soybeans and the products are mostly unchanged for the commodity index.

Flash sales of additional soybeans to China are expected this morning, and rumors persist that they may continue to purchase beyond the 12 MMT agreed amount from October. Current estimates are that they are already at 10.2-10.5 MMTs, and given the strength in the Brazilian Real, purchases may reach 13 MMTs.

Estimates for Monday’s crop production numbers anticipate a 2 BPA drop in corn to 184 BPA and a 0.3 BPA drop in soybean yield to 51.2. Both estimates are slightly higher than the street was running with in November, before they were caught with the USDA just punting their numbers after only being back to work for four days before the release of that report.

Rainfall is starting to arrive across Northern Argentina, with Buenos Aires still dry, but forecasts remain favorable for the 7-10 day window.

Live and feeder cattle futures tumbled yesterday, with feeders at one time losing as much as $5.00 during the session before a moderate rebound into the close. The cash feeder index was again higher, but just by $0.98 to $363.15 after Tuesday’s sharp gain, as it was being adjusted for the holiday-shortened numbers. Cattle slaughter numbers reported as of Wednesday show 348,000 head, a gain of 23,000 head over last week’s holiday slaughter, but still 10,000 head less than a year ago. Choice cutout yesterday picked up $3.03 while select was off $1.80, widening the spread after coming within just a couple of dollars of each other.

Support for February live cattle is the breakout point at 231.50-232.00, with resistance now at 238.00. Feeder cattle are stalled below 360, with resistance now at 359.00-360.00 and support at 350.00.