Grains are trading mixed on Thursday morning with corn and wheat slightly higher, soybeans lower. Cattle have traded 2-sided with hogs higher.
Grains Mixed Ahead of USDA Reports
The grain markets are mixed squaring ahead of the USDA reports on Monday. DuWayne Bosse with Bolt Marketing says that could keep the markets quiet the next few sessions. Early trade estimates for corn yield are around 184 bu. per acre, so down only around 2 bu. although Bosse is more bullish at around 180 to 181. The fear is even if USDA lowers yield it will have to be substantial as the agency may offset the cut by lowering feed and residual. For soybeans the trade is expected a less than 1 bu. cut in yield at 52.7 bu. and has ending stocks nearly unchanged at 294 million bu. However, that assumes USDA will leave demand nearly unchanged from December. Bosse doesn’t think that is realistic considering the accumulated exports are still running nearly 30% behind last year.
Could USDA Provide a Bullish Surprise?
Bosse says corn has been sideways for several weeks waiting for the January WASDE but the agency will need to lower yield by more than the 2 bu. the trade is expecting to produce any fireworks. Yet he points out, “Someone is going to be surprised by this report.”
Corn Slightly Higher, Despite Poor Exports
Corn was slightly higher Thursday in tandem with the wheat market and seeing some technical buying after closing the March contract above the 200-day moving average. However, Bosse says the market will need to see a close above the $4.50 level, which is the next resistance area, to keep rallying. Weekly exports are now caught up and for the week ended Jan. 1 corn were disappointing at only 14.9 million bu. a marketing-year low. That was down 49% from the previous week and 76% from the four-week average but Bosse points out it was a holiday week which usually has lighter volume. The cumulative sales are also at over 2.0 billion bu. which is up 30% from last year.
Soybeans Lower, Disappointed by Export News
Soybeans are lower after hitting chart resistance again at the 200-day moving average. Plus, after rumors again yesterday of China buying another eight to ten cargoes of soybeans the market may have been disappointed with Thursday’s flash sale of only 4.85 million bu. sold to China. Weekly exports were also lackluster at only 32.3 million bu. with cumulative sales still running 29% behind last year at 1.05 billion bu.
Wheat Sees Short Covering or Weather Concerns?
Wheat futures rallied on Wednesday and are seeing some follow through buying early Thursday. Some of that is tied to short covering as funds are net short in all three exchanges. However, is the market adding some weather premium? Bosse says with the above normal temperatures in winter wheat production areas there has been some concern about the set up for winterkill. The state condition reports showed the crop is deteriorating most notably due to dryness.
Cattle Two-Sided Early Then Rally on Strong Cash Ideas
Cattle futures were two-sided early Thursday after seeing some profit taking and consolidation Wednesday. Bosse says live cattle futures ran up into some chart resistance but the market was also waiting for direction from the cash trade. Early bids have been higher than last week’s trade and so that helped shore up the futures mid-morning. He says cash will continue to be strong for both feeders and fats because of the tight numbers and cash is still the driving force. So, he is optimistic the cattle futures will retest or even exceed the record highs set back in October of 2025.
Lean Hogs Bounce
Lean hog futures were seeing a slight bounce early Thursday after some profit taking on Wednesday. However, longer term the funds seem to be buying the hogs, despite weaker cash performance. Bosse says there also seems to be some buying tied to disease concerns, the overall demand for protein and ideas the U.S. could pick up some export business with continued African Swine Fever cases in Spain.
