Grains are higher early Tuesday, hogs are mostly higher with cattle crashing again.
Soybeans Make New Highs For the Move
DuWayne Bosse with Bolt Marketing says soybeans made new highs for the move and January futures are closing in on $11, while March made fresh highs for the year.
The push continues to come from fund buying as speculative traders are pinning hopes on a China deal being announced this week that contains soybean purchase commitments.
How Much Will China Buy?
The key to how far soybeans can rally is tied to how much China purchases and so far details are vague.
In the last marketing year China bought over 800 million bushels of soybeans from the U.S. but they only have December and January needs as South America has the rest of their supplies covered.
Bosse says that means China may only need around 300 million bushels, which is a far cry from normal. “I see this agreement as a 2026 story,” he says.
Corn Follows Soybeans
Corn futures are following the rally in soybeans but may also be hoping for Chinese business as part of a trade deal.
However, the combination of strong demand and shrinking U.S. yields may be enough to eventually support prices and lower ending stocks.
Corn Fills Gap Area
December corn moved above $4.30 resistance and filled the chart gap left on July 3 at $4.32 3/4. A close above this area on Tuesday will be critical says Bosse to keeping the momentum going on the charts.
Wheat Sees Short Covering
Wheat futures in all three classes are also rallying with soybeans and corn on short covering as the funds were near record short in their combined position before the government shutdown.
The wheat market has also gotten a bit of a push from the announced frameworks with Vietnam and Thailand as they are top 10 wheat customers for the U.S. but also as there are hopes China will buy U.S. wheat as part of a deal.
Cattle Sell Off Continues
The cattle futures opened mixed but quickly saw selling pressure return as funds are liquidating their long positions.
That pushed the deferred feeder cattle futures to limit down the expanded $13.75 limits again.
Cattle Fundamentals Haven’t Changed
The cattle market fundamentals haven’t changed since the selloff began according to Bosse but with President Trump pushing his plan to lower beef prices it has caused speculative traders to head for the door.
News of the meeting with the Mexican Ag Minister in an attempt to get the border reopened to Mexican feeder cattle imports has also cultivated fear in the market as well as reports Brazil’s president has been assured by President Trump they would also reach a deal to lower tariffs, including beef.
Lean Hog Futures Try to Bounce
Lean hog futures are trying to bounce as the market has seen a sharp correction from the contract highs hit a month ago. Bosse says the futures discount to the cash index is supporting the futures are at least holding them up.
He says he’s been surprised the response to a possible China deal has not been more bullish for the market.
