Grains ended lower on Wednesday with livestock higher.
Soybeans Fall on Lack of New China Sales
Soybeans ended lower for a third day as flash sales to China have been absent every day this week. There were overnight rumors of five cargoes being sold to China and Bloomberg reported six loads of soybeans were being loaded for shipment out of Gulf port terminals in the next several weeks carrying at least 320,000 metric tons of soybeans to China.. However, the market remains disappointed according to Vince Boddicker with Farmers Trading Company. He says every day that goes by without big sales to China or the signing of the trade pact and confirmation they will be buying the full 12 MMT means the market will drift lower.
U.S. Treasury Secretary Scott Bessent indicated he was very optimistic about the U.S. economy next year and reported that China was on track to complete its commitments under a U.S.-China trade agreement, including the purchase of 12 MMT of soybeans, which he said would be finished by the end of February 2026.
Soybeans Confirming a Top?
Boddicker says soybeans are confirming the November highs just under $11.70 on the January contract may be the highs for the time being unless there is a massive change in China’s buying program or a South American weather problem. Soybeans are still holding support but Boddicker says last week’s lows need to hold or the market could take a big leg lower.
Corn and Wheat See Profit Taking
Boddicker says corn and wheat saw profit taking with no new geopolitical threats to push the market higher or additional buying. He says the corn market is also suffering from the lack of fresh bullish news. While the export sales reports have been on record pace but with the reports lagging that isn’t providing the push needed to rally the market.
Cattle Make New Highs for the Move with NWS Case
Cattle futures made new highs for the move in both live and feeder cattle offerings. Boddicker says a combination of factors came together to push the market higher. Some of it is technical buying as the market got oversold and bounced off of key long term support areas last Tuesday. However, there is talk of higher cash this week and there was another case of New World Screwworm reported 120 miles from the U.S. border. That is giving the market fresh hope the border will stay closed for a while longer to Mexican feeder cattle imports.
Bottoming Action?
Boddicker says the technical action may be confirming a low in the cattle market but he thinks its unlikely the futures will retest the record highs. Instead he is looking for a 62% retracement of the correction from high to low. He doesn’t think the futures will fill the gap areas that were left above those levels on the charts because the funds are not in the market to help push back that high.
Hogs End Higher
Lean hog futures were also higher on Wednesday on a combination of short covering and the higher cattle market likely helped. Seasonally the cash market starts to bottom in this time frame and the futures may also be anticipating that. However, Boddicker says the funds have shed a good chunk of their length in that market so just like cattle he isn’t sure how much upside there is in the market.
