Corn and soybeans saw slight gains Thursday, wheat ended mixed. Cattle and hogs soared.
Soybeans Held Support a Second Day
Soybean futures traded two-sided but managed to hold key chart support for a second day and ended slightly higher. Mark Schultz with Northstar Commodity says the $10.80 level has been strong support and he thinks it held with the help of more daily export sales. USDA announced private exporters had sold 9.7 million bu. of soybeans to China and 8.3 million bu. of soybeans to unknown destinations for 2025-26.
Schultz says corrections in the market are healthy if they uncover demand. “what you’re finding is you’re finding actual buying taking place. So that is a good sign. Flash sales this week right now leaning towards about 40 million bushels of beans sold. So I would suspect next week’s export sales are going to probably be somewhere in that 50 to maybe 60 million bushel range and that helps soybeans exports to start catching up. Now, we got a lot of making up to do. We’re some 470 million bushels behind on the sales pace versus the same pace a year ago, but at least it’s starting to pick up a little bit.
China Export Sales Totals Rising
This week China has bought 14.7 million bu. of U.S. soybeans which confirms a portion of the 11 to 13 cargoes of China sales that have been rumored. Schultz says export sales to China continue to slowly add up. “Well, I would guess they’re going to start hovering into that three to four or five million metric ton purchase is where i think they get to you get some unknowns in here too. So that could be China as well. We just don’t know that but I would say if I had to make an assumption my assumption would be yes that would be China. But anyway you cut with China its big purchases and that helps the market,” he says.
The key for the market moving ahead will be how much of the trade agreement China fulfills. “It’s a function of does
this trade agreement that we have verbally agreed to with China do they hold up their end of the bargain if they do then I think the business will get done and we will eventually when it’s all done at the end of the calendar year we will meet or exceed what USDA is projecting for exports,” he says.
At the same time China sold nearly 400,000 MT of soybeans out of the reserve and he thinks that is bullish because they are making room for U.S. soybeans.
Conab Lowers Brazil Soybean Crop
Conab lowered Brazilian soybean production by 550,000 MT to 177.12 MMT, citing some planting issues last month. However, that is still a record 6.5 billion bu. of soybeans that will compete with the U.S. in just a few month at lower prices in the export market. Conab left corn production unchanged at 139 MMT.
Corn End Higher, Still Range Bound
Corn futures were slightly higher seeing some short covering and corrective buying but also helped by higher soybeans and meal, plus another 7.3 million bu. of export business to unknown destinations on a flash sale. Delayed export sales for the week of Nov. 13 were at 93.7 million bu. which put total commitments at 1.603 billion bu. up 30% from last year.
However, even with the strong demand corn continues to be range bound. “So it’s basically a big sideways. In the big picture, I still think you need the weekly close above $4.50 on March corn to suggest that maybe we’re doing a little bit of a breakout to the upside, and I believe we are going to continue to grind higher,” he says. However, any rally above that level is likely to be capped by a pick up in farmer selling.
Wheat Ends Mixed
Wheat futures ended mixed with March hard red winter wheat down a penny and unable to get much help from higher corn and soybeans and the weaker dollar. Schultz says the story continues to be too much wheat in the world.
Cattle Soar on Sharply Higher Cash Trade
Cattle futures gapped higher on the opening in both live and feeder cattle futures and made new highs for this move. Schultz says the market was pushed by sharply higher cash trade which developed in Nebraska at mostly $355 dressed, up $12 from last weeks weighted average and live sales in the West were at $230. Kansas also saw some light trade at $230, up $6.
January feeder cattle got above the $340 resistance area and 50% retracement mark, while February live cattle were stopped out just below the 100-day moving average. However, it was still a strong technical performance.
Can Cattle Continue to Rally?
Schultz says live cattle futures have recovered nearly $25 in a 12 trading days and may need to pause for the time being. He is also concerned that boxed beef values have slide and the Choice cutouts are under the $360 level which has put packer margins firmly in the red again. This may curb their ability to pay more for cash after this week.
“The beef cutout price has been slowly but surely trending down. So we’ve got the box beef closing yesterday below $360 on the choice. That $360, there’s some pretty good support there. We break that and we close again tomorrow below $360. It opens a door to move down towards $330 on the box beef. And each time box beef goes down and cash goes on up or future stay where they’re at, these packer margins are gonna go from being in the black a week ago to quickly moving in to anywhere from $80 to $120 per head in the red,” he explains.
Lean Hog Futures Also Higher
Lean hog futures were also higher and made new highs for the move on Thursday further confirming a seasonal low. The cash market has been starting to grind higher and cutous were also up to $98 which is evidence the seasonal cash low is in and demand has picked up. Schultz says the other factor that is supporting the market is disease concerns as more outbreaks of PRRS are being reported in integrator barns.
