China woes soften grain overnight.

Grain futures started firm and traded moderately higher in the evening session until another Chinese overnight briefing, this time from their Housing Ministry, failed to meet investors' hopes and sent property stocks plummeting. This triggered the selling that pushed soybeans lower in the continuation of Wednesday’s action when the EU formally delayed buying products from areas still deforesting for 12 months. Commodity traders have hoped that China’s government would produce additional economic stimulus to save the property sector and rekindle consumer demand for raw materials. Currently, Beijing does not intend to use any US-style “economic bazooka” to jumpstart future economic growth.

Open interest in row crops continues to increase, especially during Wednesday's trade. Corn open interest was 25,913 contracts, while soybeans gained 15,512 contracts. There has been a sharp rise in open interest over the past five trading sessions, suggesting that large funds are now returning to the short side of grain ahead of the elections in the expectation that Trump will win.

Late yesterday, the Buenos Aires Grain Exchange indicated that stronger-than-expected Antarctic winds could cause drought in Argentina’s climate in the coming months. There has been a nearby abundance of rain, which continues in the forecast for favorable planting conditions. Argentine farmers are expected to seed more soybean and corn crops early this year due to La Niña when a dry weather trend could emerge after January. Argentine weather forecasts through December remain favorable for summer row crops and wheat.

The trade is concerned about China’s slow interest in continuing to book grain. China booked 16 MMTs of corn from the US and Brazil a year ago, but this year’s purchase has been 1 MMT from Brazil. China has also been absent from the world wheat trade and is slowing its US soybean purchases. This has kept the bearish cloud over the top of the grain complex since the start of October, along with the return of meaningful rainfall in northern Brazil.

The South American forecast maintains a favorable mix of rainfall and sunshine to advance spring seeding. Near to above-normal rainfall will drop across Northern Brazil, while needed rain will also fall across Argentina before a drier slot of weather develops in week two of the forecast. The South American crop seeding is delayed by two weeks, but there will be no impact on yield with daily Northern Brazil rainfall potential.

Harvest progress should allow most soybean harvest to be wrapped up by the end of the week, while corn harvest continues until the end of October. Dryness prevails across the Central US for the next 10 days, with only a slight chance of rain across the Plains late this weekend or early next week.

Deferred live and feeder cattle futures closed lower again on Wednesday. The cash feeder Index was off $0.44 at $249.45 and is now above all feeder cattle contracts through next August. Cash markets are still awaiting trade, but light sales were quoted in IA at $186.50, down slightly from last week. Asking prices remain at $189 in the South, but active trade will likely be pushed back to Friday. Box beef prices marked their ninth consecutive day higher yesterday, gaining $2.30/CWT, and it was also the third consecutive gain of more than $2.00. The select cutout value continued to follow at a distance and was up $0.28. The choice/select gained $2 for the date is up more than $13 from the start of the month. The spread is currently higher than a year ago, for the first time since February. The futures trade is now starting to look heavy on the charts, and less buying resurfaces quickly. Otherwise, a top in the trade again will begin to be sensed.