Grains end lower on Tuesday with livestock markets higher.
Soybeans Make Fresh Lows
Soybeans made new lows for the move as funds continued to sell on a lack of bullish news. Bryan Doherty with Total Farm Marketing says the funds were nearly 230,000 contracts long when the soybean market peaked on Nov. 18 and have been liquidating in a classic “buy the rumor sell the fact” fashion in response to the China trade framework and their recent purchases. The market seemed disappointed there were no flash sales after a string of China export business. Doherty also believes there was a fair amount of farmer selling on the rally. Plus, South American weather is fairly favorable which is also pressuring the market.
Bean Oil Pressured
Soybean oil was also under pressure from news that EPA expects to issue a final rule setting 2026 and 2027 Renewable Fuel Standard RVOs during the first quarter of 2026, according to a notice filed with the U.S Court of Appeals for the D.C. Circuit on Dec. 15. Plus, bean oil saw spillover selling from a lower day in crude oil, which was sliding on talk of a peace deal between Russia and Ukraine.
Soybeans Fill Gap Areas on the Charts
Soybeans also filled chart gap areas from Oct. 24 and have also confirmed the head and shoulders pattern. So what’s next? “We completed the head and shoulders, we went right down into the gap area and filled that. So not only did we hit that objective, we filled the gap objective, slid under the 100-day moving average today. That might have uncovered some additional cell stops. But when I look at where the next level of support is, we’ve got a 200-day moving average around $10.65 in the March. So we’ll look for that to hold. If that doesn’t hold, then the market might have some trouble. Could move down to the October 1st low into that $10.28 area,” he explains.
Soybeans Low Enough?
Doherty says the market has corrected over a $1 off the highs from Nov. 18 and could be low enough to start stimulating more China soybean demand which should provide some support. “It wouldn’t surprise me if we saw China buying futures on this whole push higher into the trade deal, then they’ve sold futures. Now they’re buying actual cash beans. I guess if I were them, that’s how I would handle it. I’d hedge myself on the buy side. I would be hedging myself on the sell side once the market started to move down and now buying beans. So we’ll see what happens. But I think we’re at a point where the market can say with some confidence, it’s cheap enough.”
Corn Ends Lower
Corn fell in tandem with lower soybeans, crude oil and wheat. Doherty says the corn market continues to see strong export demand but has continued to trade in a 15 cent trading range and its capped by large supplies. However, Doherty thinks the market is well supported by end user buying and the lack of farmer selling. “Here we are mid -December. So
you’re going to start talking about some contracts that likely need to be either rolled or or sold and cash full needs have farmers I think steadily selling corn and contracting into the carry but there’s not a real appetite to sell here so I think the corn market is well supported.” he says.
Corn Ending Stocks Get Below 2 Billion?
Doherty is optimistic about ending stocks continuing to grind under 2.0 billion bu. especially with the help of lower yield in the January WASDE. “I’m having a tough time getting my hands around the idea that at 186 bushels an acre, that’s 6 .7 bushels an acre above last year’s all -time record yield, with all the weather and disease problems and higher acres,” he says.
Wheat Falls to New Lows
Wheat futures made new lows for the move and soft red winter wheat scored new contract lows. Technical selling continues to pressure the market but the market is feeling the hangover of large global supplies confirmed in the December WASDE. Additionally, talk a of a peace deal between the Russia and Ukraine is also pressuring the market with the idea that sanctions placed on Russia by Western nations will be removed and Russia will flood the market with wheat.
Cattle Futures End Higher But Hit Resistance
Live and feeder cattle futures ended higher on Tuesday but once again ran into chart resistance at the 100 day moving average. Doherty says that has keep the market sideways and in a narrow trading range the last few sessions. He thinks a higher cash market could be the catalyst to push the futures through those chart areas or higher boxed beef values.
Milk Futures Below $16
Milk futures were slightly higher but most contracts still remain under $16 just due to higher milk production. Doherty says producers have been keeping older cows, even those with lower milk production because of the valuable calves that they are carrying, with wet calves bringing upwards of $1,500. “You’ve got just too much inventory and the good news for dairy producers over the last one to two years has been this really generous, very high -priced revenue, good revenue streams from beef calves. But with that, you continue to kind of edge the envelope on growing the herd.”
However, with milk prices under the cost of production he’s hearing that many bankers are starting to pressure producers to do some liquidation and that could start some herd contraction. That could mean some higher milk prices in the future. “I do think that there are some serious conversations that are taking place between not only managers and dairies, but managers and their financiers, their bankers, whomever, because if you look back six months a year ago, you had some really good prices to defend through hedging or insurance. If you look out the next six months or year, there’s not much there. And so now comes some really tough decisions.”
