Corn and soybeans ended mostly lower on Thursday with wheat mixed. Cattle and hogs finished higher.
Soybeans Fade
Soybeans ended lower on Thursday after running up into chart resistance in the March around the 200-day moving average and failing. Tommy Grisafi with Nesvick Trading says the market also seemed disappointed with the lack of China export business confirmed in the flash report. USDA reported 4.85 million bu. Thursday morning but trade talk Wednesday put totals at another eight to ten cargoes. Export sales for the week ended Jan. 1 were also at 32.3 million bu. and the cumulative sales are running 29% behind last year. China has bought an estimated 10 MMT of the 12 MMT commitment and exports are still lagging and may not be able to catch up. “So we had this business from China. We had the beans to sell them and sold them 12 MMT but this 25 MMT every year for three years, my sources say it’s not going to happen. What the what the administration says and what China does are two different things.”
South American Crop Coming
Grisafi says South America’s crop is also right around the corner and looks to be a monster, so soon China will be buying cheaper soybeans from Brazil and the market knows that. “Plus, I imagine you’re starting to see South American hedging hitting that March and May contract.” Weather has also been favorable for all but Southern Argentina and Northeast Brazil. “I would love to have a South American weather market and get our markets propped up and get some good hedges or sales on for 2026 but right now, it’s not only us who are selling crops below our cost of production, but other countries around the world are going to be leaking out this grain. And you know how they do it in South America, a lot of it goes to town right at harvest, and they’re going to need the cash flow just like everyone else,” he adds.
Corn Fades With Soybeans, Poor Exports
Corn saw early strength with higher wheat but as soybeans faded that pulled corn down slightly into the close. The market also seemed to be discouraged by the marketing year low for weekly exports which came in at 14.9 million bu. Even though it was a holiday week the market was anticipating more. Accumulated export pace also fell to only 30% above a year ago.
Grains See Pre-Report Positioning
Grisafi says the grain markets were also seeing some positioning ahead of the January USDA reports. The focus will be on yield but the average trade guess is only 2 bu. below last month at 184 bu. per acre and ending stocks are only expected to be down 43 million bu. to just under 2.0 billion. He says the cut will need to be bigger than that to break corn out of its sideways trading range especially as demand could be lowered by USDA to offset those cuts. Feed and residual has been arguably too high especially with border closed to Mexican feeder cattle and a 70 year low in the cattle herd.
“I think if corn yields just go down a little, I don’t think you’ll see much of a positive reaction. You could see a negative reaction. I’d love to see a four or five bushels come off the corn, get a nice healthy rally. We know we have nice demand under the corn market. If we have a negative number I think you’ll see it well supported and it will help the export program. There are a whole bunch of people who would love to buy corn fifteen twenty lower.” Until then he says the basis is doing the work when end users need product.
For soybeans average trade guesses are less than a half bushel yield cut at 52.7 bu. per acre, but the big question will be whether or not USDA lowers export demand with the current slow pace of sales, which even include China.
Grisafi is skeptical about the accuracy of the reports with the government show down. “Note the USDA was closed for over 45 days. I’m not so sure how pure this data is.”
Winter Wheat Ends Mixed: Seedings and Conditions in Focus
USDA will also provide winter wheat seedings and currently estimates are 800,000 to 900,000 acres lower than a year ago. However, with prices not far off of four year lows it seems like seedings estimate may be too high. “Wheat growers are being punished with these low prices. They’re being asked politely, by losing money to go plant something else. Now, what those acres go into, it’ll be interesting. But if we’re going to plant less wheat, it would make me think we’re going to plant more corn in 2026 or some other crop. So we’ll see how that rotates out. But, very tough for the wheat growers and even with the government sending this money that should start rolling out in the next six weeks, it’s just not going to be enough.”
Should Wheat Be Adding Risk Premium?
The condition of the crop is currently in question, says Grisafi, with the above normal temperatures and lower state crop ratings on Monday. So does the market need to add some weather premium? And what about risk premium tied to geopolitical concerns? Grisafi says,"Don’t forget, Russia is still invading Ukraine and that adds tension in the wheat market and it just adds an overall strain to world markets.”
Index Fund Rebalancing
Rebalancing by the long only index funds began on Thursday. Grisafi says there was some jockeying of positions in the grain markets today as a result and he expects that to continue as the reallocation of portfolios is expected to last for five sessions. We have a little buying right now with some rebalancing. They’re buying about 10,000 corn a day, maybe a little in beans. It’s not going to move us a dollar but that’s supportive.”
Markets Await SCOTUS Ruling on Tariffs
The entire market place is also awaiting the SCOTUS ruling on the legality of the IEEPA tariffs. Grisafi says if the ruling goes against the administration and the U.S. is forced to pay back the tariff money it could upset the market. “The betting markets are giving it a 75% chance that these tariffs are overturned,” he says. And he points out that the administration has been front running the ruling trying to get trade deals done. “If you notice one thing out of the Trump administration, they’ve moved very fast the last six, eight weeks to try to get deals done with people or try to pretend we got deals done with people. So if you watch Ag Secretary Rollins, she’s like, we got a great deal done with Japan. We got a great deal done with China. If you could read between the lines, all the countries agreed to buy what they normally buy it. The whole thing looks like a card trick to me.,” he adds.
Cattle Futures Recover
Live and feeder cattle futures saw two-sided trade early but managed to recover into the close. Funds have been buying on breaks but Grisafi says the market has been pushed by strong cash trade for both fed and feeder cattle and calves. Some fed cash trade developed in the North after the close at $360 to mostly $365 dressed, up $5 from last week’s weighted averages.
However, feeders have been the leaders with eye popping prices at sale barns across the country. That’s kept the feeder cattle futures well supported on any breaks. Grisafi thinks this will continue as supplies will remain tight and there have been new cases of New World Screwworm (NWS) in Mexico that will likely the border closed to imports.
