Grains ended mostly lower on Tuesday, with cattle higher and lean hogs mixed.
Soybeans Fade China Buys
Soybeans were lower fading a 336,000 MT or 12.3 million bu. flash export sale of U.S. soybeans to China for 2025-26. Late in the afternoon USDA corrected this sale to 136,000 MT or 5.0 millon bu. to and 206,700 MT or 7.6 million bu. to unknown destinations. This confirmed at least part of the rumored 10 to 14 cargoes purchased by Sinograin on Monday.
Chip Nellinger with Blue Reef Agri-Marketing says soybeans sold off in a classic “buy the rumor, sell the fact,” reaction. There was also talk of additional China buys on Tuesday but that didn’t hold the market together either. He estimates China’s total purchases are now at 10 MMT on the low side. “There’s some people thinking they’re closer to 12 MMT. Remember, though, we kind of missed the the mark just a little bit. It was supposed to be 12 million tons in calendar year 2025. And I think that’s why the market sold off nearly $1.40 from the November highs into the end of the year,” he explains.
Soybeans Hit Chart Resistance
Nellinger says March soybeans also hit chart resistance a the 200-day moving average and could not get above that level so some profit taking ensued.
Soybean Traders Cautious Ahead of WASDE
Soybean traders are also afraid to buy ahead of the big Jan. 12 WASDE report in case there are any surprises. While Nellinger and the market expect a slight yield cut, the fear is that could easily be offset by lower exports. Export inspections or shipments are running 45% behind last year or nearly 500 million bu. Export sales are also running behind last year by nearly 31%, even with China sales included.
He says, “So far, the USDA has been a little bit slow to want to adjust exports lower, maybe with the understanding that there was some sort of a Chinese agreement and they’re going to be a big purchaser of U.S. beans in the 2026 calendar year. So, I’m not sure. I think they’re probably close on yields within a half a bushel. If they’re not, if it’s one bushel or more higher or lower, that’s obviously going to be a shock to the market.” Still, he’s not sure if USDA will make a change on exports but if they cut exports and don’t cut yields it could be bearish.
Soybeans Traders Concerned About Venezuela Development
Nellinger says there is additional fear tied to the developments in Venezuela as China has invested in that country’s energy industry and has been aligning with Latin American countries. So the U.S. assistance to promote new leadership could possibly spark some retaliation from China. “This Venezuelan situation may have been more of a kind of shot across the bow to the Chinese as much as it was trying to arrest a potential dictator and get drug flow stopped coming into the United States,” he explains. He says that could mean if tensions worsen between the two countries they could possibly cancel or not follow through on the promises they made for 2026.
South American Weather
Weather in Brazil has also been favorable for soybean development which has been a headwind for the soybean market. “Brazil has a record crop coming and private estimates keep increasing the crop. I think a 181 MMT soybean crop in Brazil is starting to be a realistic number,” according to Nellinger.
Argentina has some dry areas but so far it hasn’t resulted in yield cuts on the corn or soybean crop. In fact, Dr. Michael Cordonnier raised Argentina corn production 2 MMT. “It’s early enough and it’s it hasn’t been a long enough developing situation down there just yet to be real real supportive,” he adds.
Corn Hits 200-Day Moving Average
March corn futures were also unable to take out the 200-day moving average and that has been the case for several weeks. Nellinger says the corn market rallies continue to get capped, especially by wheat. “Corn tries to rally wheat, holds it back. Corn tries to rally beans today, reversed first and kind of drug corn off the highs,” he says. And Nellinger isn’t confident the corn market will get any help from USDA to move corn above this chart area.
Corn Market Sees Report Positioning
The corn market has been buying time waiting for the Jan. 12 WASDE report which has also contributed to the sideways pattern. Corn market participants have been waiting to see if USDA cuts yield but Nellinger says it likely the agency could leave yield around the 186 bu. per acre mark. “That’s even though I believe in my heart that the yield should be cut several bushels.” he adds.
He says average trade guesses haven’t been released but he thinks the trade will also come in close to 186 bu. on yield. “My sense is that there’s not many people thinking they’re going to cut much off of 186. I think if they went down to 182, 181, certainly below 181, I think would be a big bullish shock because I don’t think there’s many people out there that believe they will do that.”
Wheat Market Drifts Lower
The wheat market was also mostly lower on the close and saw spillover from the late selloff in the row crop markets. However, Nellinger says the wheat futures face headwinds from huge global supplies and record crops in many key producing countries. Plus, the funds have been back extending their short position in all three classes of wheat. “The one thing that could get funds to cover shorts in a hurry is a weather problem. He says, “The crop went into dormancy early. A lot of cold weather, snow on top of that. And now some of that crop is out of dormancy with exceptionally warm temperatures. So if we’d see a cold snap here in January, February, really bitter cold across the plains, that could really be something that wakes the market up and causes some short covering. Otherwise, unfortunately, we’re stuck in the mud.”
Feeders Make For the Move Highs
Live and feeder cattle futures closed higher on Tuesday with feeders making more new highs for the move. February live cattle hit chart resistance at yesterday’s high for a second day and retraced under that level. However, Nellinger thinks as long as feeders continue to lead and tfutures will eventually push into new record highs pulling live cattle along.
“I would not have thought that was possible a month ago but I think feeders can lead live cattle. To me it’s all about cash feeder market. You look at the sale barn reports every day. They’re just screaming higher. So I don’t know why that would change in the near term. I think that there’s a chance that feeders push into new all time highs.”
Lean Hog Futures End Mixed
Lean hogs ended mixed after a lower start, once again showing their resilience. After closing higher Monday the market saw some profit taking and hedge pressure initially but powered back with the help of the cattle market. Nellinger says the hogs have also seen fund buying and so that combination is likely to be supportive. However, with summer months above the $100 mark he advises producers to start considering some hedging opportunities.
