Friday’s closes were higher in soybeans, cattle and hogs, steady in corn and lower in wheat.
Soybeans Make New Contract Highs
Soybeans saw early weakness on Friday in tandem with plunging wheat futures but turned back higher as rumors surfaced of China sales.
Brian Grete with Commstock Investments says, “We’ve seen China come in and be a fairly active buyer over the past several weeks here of new crop U.S. soybeans. There was more talk of that on Friday. And so that gave us some price support.”
November soybeans made new contract highs for a second day and were up 50 cents for the week as the market confidence grows in China fulfilling its purchase agreement with the U.S.
China accounted for 40 million bu. of the 56.5 million bu. weekly new crop export total and has been buying more orderly but are they concerned about U.S. weather trimming yield?
China Goodwill Buys
Grete says China’s buying is coming from state-owned firms, based on the agreement with the U.S.
The U.S. and China are still working to the Board of Trade put together which would be the mechanism to gauge whether there’s compliance with the trade deal.
“So, I think that’s important, says Grete, “And then we have the meeting between President Trump and Xi Jinping that’s expected to happen in Washington in late September and so there’s legwork being done on both sides ahead of that and so You know, we anticipate that there will be more Chinese purchases as we move forward just out of goodwill. And then once you get that agreement in place, then it becomes more concrete.”
Will China Chase U.S. Soybeans?
So even if there is a weather issue that pushes the soybean market higher, will China continue to chase U.S. soybeans?
Grete says, “Oh, I think they’ll continue to buy out of goodwill. It may not make sense economically, especially for the commercial firms. Part of that is the rollback of 10% tariffs that U.S. and China have on each other. So we need to get that done as well. Once that happens, then it becomes more viable economically for the commercial firms to start buying out of China.”
But for now, he thinks we’ll continue to see pretty systematic purchases by the state-owned firms.
Soybeans to Hit $13?
Now that November soybeans have made new contract highs where does the market project to and will it get over $13?
Grete says, “You know, $12.50 and that was a major hurdle and so it took us a little bit of time to get there. I mean, once we got above $12, the next 50 cents came pretty rapidly. But I do think, yeah, just psychologically, you move to $13 at this point in time.”
Wheat Crashes on Black Sea Deal Rumor
Wheat futures made new contract highs in both hard red and soft red winter wheat Thursday night but then saw profit taking heading into the weekend.
Grete says it was triggered by rumors of deal between Russia and Ukraine to allow exports to flow.
“And whether it comes to fruition or it was just a rumor, the bottom line is it did cause some profit taking. So if there is an agreement on the grain side of things, you know, that’s happened twice before, back in 2022 with the Black Sea Grain Initiative, the corridor deal, that was kind of a system that allowed the boats in and out of the Black Sea ports. Then it happened again in early 2025 when the U.S. rebrokered the deal there. And so this is something that has been talked about and implemented in the past.”
So he says he would be surprised if that comes to fruition but on the same token, it could have been just a rumor.
Key Reversals in Wheat
The fact of the matter is it caused big reversals in the wheat market.
Both classes of winter wheat posted key bearish reversals and spring wheat posted just a bearish reversal.
Grete says, “So whatever the case the money flowed out of the the wheat market into the weekend.”
Is the Rally Over?
So unless the deal falls through is the rally in the wheat market over?
Grete says wheat is going to continue to be headline driven whether the attacks continue or whether they get a deal or what.
History proves the wheat market makes huge spikes on Black Sea news.
“That goes all the way back to 2022. Four instances now where we made big spikes and each of those big spikes has been followed by a huge downside correction. And so we need to watch the action here over the next several days just to see if it does give topping signals. And if it does, then there’s a very good chance that it’s over,” he explains.
Corn End Steady Friday, Higher for the Week
Corn futures made new highs for the move on Friday but then ended just steady as the wheat market drug corn off its highs.
However, corn posted higher weekly closes by 19 to 20 cents.
“The interesting thing,” according to Grete, “Is that weather is one of the things that the markets are trading right now. And if that’s if that was the primary one, corn should be leading to the upside. And we’ve seen wheat lead to the upside and we’ve seen soybeans lead to the upside and we haven’t seen the corn market lead to the upside. So that tells me that we aren’t in a full fledged weather market yet.”
While some people want to talk about it being a weather market Grete points of corn would be leading if that was the case.
Does Corn Need to Add Weather Premium?
Does the corn market need to add weather premium? Is the corn crop losing yield because of the weather that we’ve had or the forecast coming up?
“The great debate in the marketplace, what’s the yield going to be?”
Grete has done the math and looked at historical data, crop conditions, analog years, and other factors and ultimately comes up around trend line on corn.
“As we sit here in late July, it sure does look like corn’s probably going to be within a bushel or two of trend line on either side.”
EU Weather
So if the market isn’t trading U.S. weather, is it trading EU weather and the heat and drought there maybe that smaller crop?
“Yeah, I think that I definitely, that heat was so extreme for three weeks across Europe. They are going to need to import more corn in 2026, 27. So that opens the door for the United States, along with others, but the United States being one of them,” he states.
So that is a market factor, plus European futures have just been on fire.
Corn Moves Above $5?
After a higher weekly close will the corn market continue to move higher and eventually take out $5?
“It’s all about money flow. So we got all these volatile factors that come into play, geopolitics and weather and Chinese demand and all these things that can really move markets in a big way. And what we’ve seen is the funds have covered short positions in the wheat
market. They’ve gone long and extended their length in the corn market. They’ve extended their length in soybeans.”
So in his opinion it ultimately comes down to money flow and where the money is going into these markets.
China Corn Purchases
The other thing that could really push the corn market above $5 is China purchasing corn as part of the $17 billion that they promised.
Will that happen after the Board of Trade is established?
Grete says, “There’s been rumors in the marketplace that China’s shopping around for U.S. corn and for wheat, for that matter. And we just haven’t seen anything show up on the daily sales. We haven’t seen anything show up in the weekly data. And so I think that probably later than sooner on the corn and wheat purchases and any other feed grains, aside from sorghum.”
China has been a consistent buyer of U.S. soybeans and a consistent buyer of sorghum, and the others haven’t developed yet.
Grete thinks it could happen after the tariff rollbacks, the Board of Trade is established, and maybe after that meeting in late September between Trump and Xi Jinping.
Bull Market Brewing?
With all the factors that are positive for the grain markets is this the start of a bigger bull market or not?
“No, I’m not in that camp, to be honest with you.” says Grete, “I think that there are bullish aspects, no doubt about it. But I’m still in the camp that rallies need to be sold, have your sales targets in place and execute on them when they’re hit.”
He suggests scaled up selling as the market rallies.
“That doesn’t mean that you have to go out and sell everything. I’m not saying that by any means, but manage your risk as prices move higher,” he adds.
Cattle Market Bottom?
Cattle futures were higher Thursday and Friday and live cattle closed higher for the week ahead of two major USDA reports.
So is the market bottoming...finally?
Grete says, “I think probably it’s just corrective buying to end the week. And so we shall see it moving forward. Those lows need to hold.
If they give way, then we’re going to see another wave of liquidation pressure, in my opinion.”
If the market gets bullish news from USDA and those lows hold, then he thinks futures can work higher.
“Just because it’s so beaten up at this point in time. You know, the futures have been waiting on the cash and product markets to bottom. The cash fundamentals have been waiting on the futures to bottom and neither have really given us any indication of that yet. And so it just kind of feeds upon itself.”
So he says the market needs to move through that wave to put in a low and then start to move above some technical resistance.
More Upside in the Hogs
Hog futures have continued to grind higher on the heels of higher cash and cutouts, which have stayed about the $100 mark.
“The price action over the past five weeks or so here is we’ve worked off the June lows as a whole heck of a lot better than the previous four months where we faced contra seasonal price pressure. But slow and steady to the upside is much better than contra seasonal to the downside,” he adds.
The cash index is averaging about 50 cents or so up every day.
“The futures have some premium built into them, the August contract that is, and they’re reducing the discount in the October and December contracts. So traders are going about this systematically. They’re kind of cautious because we did have that lengthy period of contra-seasonal price pressure when we typically would be making our seasonal highs,” he concludes.
