Grains were sharply lower on Thursday morning, with cattle higher and hogs seeing losses.
Grains Fall on Lack of China Ag Purchases
The grain markets were sharply lower Thursday morning with soybeans seeing 30-cent losses on disappointment the China summit has not produced any agricultural purchase agreements.
Randy Martinson with Martinson Ag says, “Bessent came out with a comment earlier this morning and said that China’s needs are taken
care of as far as the soybeans are concerned. And I think that really sent the shockwave through the soybeans starting that market to trend a little bit lower. That spilled over, you know, cotton was lower. And we’re also seeing it hit the corn and the wheat market as well.”
No Old Crop Soybean Purchases From China
So it looks like China will not be buying any of the additional 8 million metric tons of old crop soybeans President Trump posted about on February 4.
“We were hoping that we could see, you know, there was talk about that 8 million metric ton more, you know, that we heard in this winter. We were hoping that we would see at least a portion of that come for soybeans. And of course, now with it kind of slipping and looking like there’s not going to be anything, that they’re going to kind of stay with their original agreement. That kind of has taken some of the wind out of the sails.”
Martinson says the hope is the U.S. will still get some type of signed agreement with China and they will commit to the 25 million metric ton a year they talked about in late October.
“I mean, with this meeting right now, it would be nice to get that in writing so that it’s clarified and then we can basically then feel comfortable with it. Now, Trump did invite China’s president to come to the U.S. in September, I think September 24th. Maybe that’ll be a trade deal done there. But, you know, this is kind of dragging out. This has already been almost, you know, nine months since they started talking. And it would be nice to get the trade deal actually in ink.”
The talks are not completely done and there was a flash sale Thursday morning for 9.3 million bu. of soybeans to unknown destinations, so maybe there is some business from China.
Weekly Exports Anemic
Meanwhile, the weekly export totals showed a marketing year low for old crop soybeans at only 3.8 million bu. while corn was at 27.0 million and wheat was at 4.9 million.
Martinson says, “I think, you know, corn came in also at like a 14-week low or something like that. So, I mean, yeah, they were dismal. I mean, we’re getting to the end of the marketing year for wheat, so you kind of expect to see exports start to slow down in that market and switch to the new crop. But for corn and soybeans, we would like to continue to see that move forward. And we have had a pretty good run up in prices, and that probably slowed down some of the sales.”
The weekly export report also indicated no new soybean business to China either old crop or new crop.
Martinson says there is still time for new crop sales. “We have not, you know, and most were anticipating we wouldn’t see them come in and start buying the new crop until probably the August, September timeframe. So that kind of leads into why we’d like to see a signed trade deal now, but that might coincide more with the September meeting if China’s, if Xi does accept Trump’s invitation.”
Grains Take Out Chart Support
Grain markets were seeing some support areas violated on Thursday morning with July corn under the 20-day moving average and July soybeans were below the psychological $12 mark.
“One day it doesn’t make a trend, but, you know, we see follow through tomorrow likely and that would then start to make us wonder a little bit that maybe we have rolled over. We close below $12 and we don’t see the market pop above it again tomorrow. Then I think the party’s basically over for the growing season. We could likely see some pressure until we see the crops done planting and we start to see a little bit more weather issues during the growing season,” he explains.
Corn was flirting with support on the July contract at the 20-day moving average and he says the market could hold up better than soybeans because it did not have as big a rally coming into the China summit.
December corn and November soybeans had just made new highs and new high closes for the move on Wednesday so the reversals there are also disappointing.
“I mean we’ve actually been seeing the new crop push pretty good because we have some concerns about the growing season you know you know and we kind of saw that in the USDA’s report on Tuesday you know and corn stocks are comfortable, but if we see some sort of a hiccup in
production, whether acres come down or yield gets adjusted, you know, things can get to be fairly, you know, get a little tighter pretty quick. With soybeans, you know, we lose two bushels off the national average yield, which is estimated at 53 record again. You know, then all of a sudden we cut our stocks in half.”
House Passes E15 Bill
The House also passed the year round E15 bill yesterday and it now goes to the Senate. If it passes will it be a big demand push for corn?
Martinson says it is positive but it will take a while to see a big impact on corn demand.
“A lot of the plants are pushing capacity or close to it. You know, we’ve got a few that are expanding there. You know, this year they’re doing the construction to expand. Overall, you know, it’s going to take a while to get to the point where we could do an E15 blend year round consistently. I don’t think we’ll get to an E15. I think we could get probably to an E12, E13 as kind of be the national blend and that would still chew through a few more bushels. I mean, we probably would still add about a billion bushels to the corn demand at that point,” he adds.
EU Rejects Argentina Meal
Soybean meal was up over $10 on Wednesday on news the EU had rejected another cargo of Argentine meal on quality and genetic concerns.
However, that was a short lived event and Martinson says it won’t be a big market mover unless it happens more consistently.
“I do think it’ll help increase some of our meal demand in the U.S. as EU, which is now on a timeline to get their trade deal done with the U.S. I think that’ll help kind of calm some of the nerves on that.”
Production Cuts Priced Into Wheat Market?
The wheat market was lower on Wednesday and seeing follow through selling with spillover from the lower soybean and corn markets.
However, USDA’s big production cut in the WASDE by 36% on the hard red winter wheat crop may be factored in according to Martinson.
“It was a shock to the market and they weren’t anticipating it to be that big of a cut. You know, what was interesting is that with USDA making that big of a cut, you know, there’s going to be more cuts coming forward, you know, coming in later months because they normally don’t make that big of a one and then not follow through with something. So I do think we’ll still see that crop get trimmed. But at this point, you know, I don’t know if it matters. I think, you know, with corn and beans kind of coming under pressure, it’s going to pull wheat with it.”
Pressure should be limited though by the tighter new crop ending stocks.
Demand Destruction
The other key is are pricing getting high enough it is choking off demand?
He says, “What was interesting is when you looked at the world numbers from Tuesday, every single major exporting country is cutting
production or seeing a reduction in their crop size going into 2026. So what we saw as a run up in 25 is coming back out of the production side in 26. So everybody is looking at cutting back on production.”
Kansas Wheat Tour Results
Day two of the Wheat Quality Council Tour in Kansas showed a yield of 39.3 versus 53.3 BPA last year.
However, the results of the first two days have failed to move the market.
He says, “It seems like, you know, it’s even hard to find them in the press, you know, because it’s, you know, it seems like everybody’s attention has just been so focused on, you know, the E15 year round and then also with the China-US summit that we’ve kind of put this wheat quality tour to the back burner.”
Cattle Futures Rally With Record Cash
The cattle futures were higher Wednesday and seeing follow through buying Thursday with record cash trade breaking.
The North came in at $265 to $268 live and $405 to $410 dressed. The South traded $260 to $262.
“Cash is king. I mean, that’s what’s leading the market. That keeps increasing and that keeps bringing the market back or kind of breathing life into it. We had a little bit of a concern earlier in the week with the idea that we were going to lower the import tariffs and increase imports from other countries to kind of bring the price down for the average consumer,” he adds.
But higher cash trade rallied the board and consumer demand has stayed strong...so far.
“I mean you look at the report on Tuesday the per capita consumption of beef is expected to increase,” he adds.
China to Register Beef Plants?
Conflicting news wire reports out of China indicated they had agreed to re-register 400 U.S. .beef processing plants.
“They were ready to do it, but then an hour later they rejected it and reversed their decision to register them. You know, at this point, I don’t know if we’ll see much exports anyway, because our exports actually have been decreasing for this year because of the higher cost. And I think if they’re going to import some protein, they’re going to import something that’s a little cheaper than beef is right now.”
