Grain and livestock futures are mostly higher early Thursday.
Corn Forging a Low?
Corn futures were higher early Thursday seeing some follow through buying after a short covering bounce on Wednesday. However, Allison Thompson with The Money Farm thinks the bearish USDA report news is priced into the market. She says while the 1.3 million acre increase in harvested acres was not expected the 186.5 bu. per acre yield was not a new fundamental for the market. “We already traded the highest yield of 188.8 bu. in August when we put in the contract low in corn and so I don’t think this report was as bearish as some thought,” she says.
Low Prices Stimulate Corn Demand
In fact, she thinks the lows are in based upon the strong end user demand that is coming at the market on the price pullback. USDA’s weekly exports for corn were just shy of 45 million bu. and the market saw more flash sales of corn with 10.2 million bu. sold to Japan and 19.7 million bu. sold to unknown destinations. Plus, ethanol production was at a record high this week at 1.196 million barrels.
Soybeans Also See Demand Uncovered
The soybean market also held the October lows this week and Thompson thinks that market has also priced in the higher ending stocks from USDA. Plus, demand is being stimulated at these lower prices. Weekly exports were strong at 75.8 million bu. and USDA reported flash reports of 7.5 million bu. of soybeans to China and 17.3 million bu. to unknown destinations for 2025-26 plus 2.8 million bu. to unknown for 2026-27 on Thursday morning. The key will be if China continues to buy after they reach their 12 MMT commitment. Soybean oil is also sharply higher Thursday morning on word EPA is going to finalize RFS blending levels by early March staying close to the initial proposal which raised biomass based diesel blending requirements.
Conab Lowers Brazil Production
Conab lowered Brazilian soybean production 1 MMT early Thursday and now pegs the crop at 176.12 MMT. While that is still a record the crop is still getting smaller and Thompson’s sources indicate that early harvest results in Brazil have been disappointing. “They think the crop may not be any bigger than 170 MMT,” she adds.
Wheat Holds Up on Usage
Wheat futures were higher on Thursday with held from higher corn and soybeans but the market held up better this week after the bearish news in the USDA reports than the row crop markets. She says that’s because usage is up over last year, which is a fact not being recognized by the market. Exports on Thursday were at 5.7 million bu. and the cumulative sales are now up 16% from last year. While winter wheat acreage was not down as much as expected it was still below last year and she thinks the market is going to have to start bidding for spring wheat acres with higher prices to compete with row crops.
Acreage Shift in 2026?
So does she expect an acreage shift out of corn into soybeans in 2026? Thompson says there will be some minor adjustments but not the big shift of 4 to 5 million acres the trade is already talking about
Cattle Futures on the Way to the October Highs?
Cattle futures are back higher on Thursday after a shallow correction yesterday. Thompson says the futures continue to hold support areas on the charts on these minor pullbacks and are bought by speculative traders. Plus, the fundamental are still strong including higher cash markets, tight supplies and solid demand. She says the black swan is when the border will reopen to Mexican cattle but with continue NWS cases she thinks that may delay the reopening for a time. The cattle market isn’t even into the tightest numbers yet either.
