Grain and cattle futures closed higher Thursday, hogs lower.
Soybeans Hit New Highs
Soybean futures hit new contract highs again as the market got energized by higher product values, report positioning, higher energy prices and China buying.
Brady Huck with Empower Ag Trading says, “It’s good to see these flash sales continue to come. It’s nice to put a few days together where you
see China in the market and unknown in the market for soybeans,” he says.
Flash sales by private exporters indicated China had bought another 10 million bu. of soybeans, unknown destinations took 8.0 million bu. both for 2026-27. This puts total soybean flash sales for the week at 34.1 million bu.
This coincides with news reports that China had purchased 1.0 Million Metric Tons (MMT) of soybeans this week.
China Ramping up to Summit
China is on a buying spree heading into the U.S. China Summit between President’s Trump and Xi on Sept. 24 in Washington says Huck.
“It certainly looks like they’re front loading and getting in good favor ahead of that meeting,” he says.
Total sales for China are over 50% of the 25 MMT of U.S. soybeans they committed to buying before Dec. 31.
High High Will Soybeans Rally?
With November soybeans making new contract highs where do the charts project to? Could soybean prices clear $14?
“Yeah, I think, you know, use whatever technical tool you want. I like Fibonacci extensions and looking at that. But when you get in new contract highs, you’re in uncharted territory,” he explains.
He pays attention the fund length but admits there’s no limit on how far they want to extend their ownership into the market.
Energy Markets Support Inflationary Buying
The energy markets were also supportive with WTI crude oil soaring above $100 for the first time in three months as news circulated that administration officials were talking about the Iran war lasting months if not years.
Record high diesel fuel prices are also driving up heating oil and in turn soybean oil.
Plus there was inflationary buying that stepped back into the market at the PPI or Producer Price Index pushed over 5.3%.
“The energy market is certainly something that we’ve got to pay attention to. It has been a big catalyst in the commodities in general. And when we get crude trading above $100 a barrel and you’ve got diesel moving like it has, it becomes a problem to some extent here in farm countries. It’s moving the markets, and it doesn’t seem like there’s an end in sight to the war in the Black Sea or the Middle East,” he states.
Huck says farmers need to be cautious with the funds near record long in soybeans and record long in the corn market. However, if inflation continues to bubble they could extend that length.
“If you look at the COT data in that 2020 to 2023 stretch, they can get embedded in a long position and these markets can continue to climb higher. So I wouldn’t want to outguess where they want their money parked and how long they want it there, but it certainly feels like the inflation problem isn’t going away and some of the tools and tactics that we’re using to solve it may actually be pouring a little bit of gas on the fire,” he concludes.
Corn Bounces With Beans, Crude Oil
Corn finally saw a bounce after trading lower for five straight sessions as funds were taking profits on their record long position ahead of the USDA reports.
“So pre-report positioning, certainly a factor as we prepare for tomorrow’s reports,” he says.
It’s All About Yield
The trade guess is at 178.4, bu. per acre, which is down 2.3 bu. from August but may still be above the yield the market has been trading.
Huck says, “The Pro Farmer number is well below that. Then StoneX comes in and drops a 182.9 number on corn. I feel like we’re in the 176, 175 area if you’re looking for a yield number that’s been thrown around.”
The key to the national yield is whether or not the areas in the Central and Eastern Midwest with ample to excess moisture can make up for the yield losses in the Western Plains and Western Corn Belt due to drought and heat. Plus, will that show up in the September report as USDA likes to play it conservative?
“That’s my biggest concern,” says Huck, “Is that we slow play that adjustment and that this takes longer to really shake out what that total production figure is going to be. It’s no argument that we haven’t had the best of finishing conditions out here. And the West has certainly had some problems. But like you said, can the East make up for it? There’s some doubts out there that these can make up for it.”
He concludes it will set up an interesting basis environment across the nation.
Stocks to Use and $6 Plus Corn?
Beyond yield the important number is ending stocks which are projected by the trade at 1.522 billion bu. and Huck says this would put the stocks to use ratio below 10% and that could excite the corn market.
If that ratio is 9% could that put corn at $6 or above?
Huck says, “I think you can very much make the case for that. Anytime you get below sub 10% stocks to use ratio, the market gets excited and
you see those parabolic type of runs where we saw in the 2020 to 23 time frame where everybody’s screaming at you to sell $4 or $5 corn and then it runs to $6, $6 plus. And you hope you have some ownership and are able to participate in that type of rally.”
Wheat Rallies
Wheat was back higher on Thursday in tandem with corn, beans and energy market but also chasing the Black Sea headlines.
If the export issues in the Black Sea aren’t resolved soon he thinks the wheat market will need to go much higher.
“It just continues to have new headlines, new bombings, and the grain corridor export situation has not improved. If anything, it’s deteriorated. I don’t know that the market is fully respecting the situation there, but they have gotten the grain out in the past, and we’ll see how it all shakes out,” he adds.
Wheat Buying Acres
At these prices Huck says the winter wheat market is buying more acres. Farmers are waiting for some rain in many areas to plant but there is incentive at these levels.
“Anytime you have an $8 handle on the wheat market, I think farmers are more excited to put some in the ground. We’ve got some moisture
and prospects for some more moisture here in wheat country. That’ll excite guys to get some seed in the ground and plant some more acres. If it stays dry, you’re going to see acres back off,” he explains.
Wheat is a cash crop that can really help a farm’s balance sheet according to Huck.
“That influx of mid-year income in the July time frame really helps balance sheets and farms, keeps them sound and extends that operating note. It’s an important crop to having the mix out here. And I think we’ll see maybe a little increase in those wheat acres versus years past,” he adds.
More Double Crop Acres
Huck makes the point there could also be more double crop acres in the South with wheat and soybeans.
“Hearing some talk as you manage inputs and manage cost of production, the wheat and then following it with double crop beans or double crop situations, that’s catching a lot of eyes and attention for managing that cash flow, managing your input cost, and trying to stretch the balance sheet, in this farm economy,” he states.
is that all technical that we’re seeing here or are we trying to price in some higher cash?
Yeah, I think cash market’s supportive of the cattle market and then you got the cutout doing a
little bit of work there too to support things.
Had a nasty 60, 70 days here in the cattle market, just downtrend.
So hoping that we’re carving out a bottom in this market, pivoting to a sideways trend.
Would love to see an uptrend again. I’m a producer myself, so I’m always wanting to root for a
higher market in your cattle complex. But yeah, good to see the last few days put things together.
The closeouts in these fat cattle right now are really rough. That could hinder.
how aggressive a feed yard wants to go chase calf prices and stockers to refill those pens and
inventory. But we’re not seeing that cash market on calves or particularly the calves cool off
anytime soon. And we’d like to see that fat market rebound and rally a little bit here too. Yeah,
that’s a good point. Where do you think technically you have to see a close in either live or
feeder kettle futures to confirm the bottoms in and that we can build on this? I always like to
look at, you know, retracements and then key moving averages, the 50-day moving average. You look
at the 330 level in your October type contracts. You look above 220 in that area in your decent in
October fat cattle contracts. But watch that 50-day moving average across the board. And if we can
get a close above that, that could continue some momentum to go chase down the 100 and 200-day
moving averages. We just got to get all these headlines to quit coming, right? It seems like every
day there is something new that comes out of somebody’s mouth that can send this market in a tizzy.
So I think if you’re in the grain market, you’ve got to be cognizant of that. We’ve seen a nice run
here and you’ve got tremendous amount of headline risk, long liquidation risk. On the cattle side
of things, there’s still room for funds to sell this market and liquidate some of the length that
they have. But it can go the other way too. And that’s what I’m hoping for on the cattle side of
things. We’ll all hope that. Thanks so much, Brady Hugg with Empower Ag Trading and Markets Now.
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