Soybeans ended higher on Thursday with bean oil, while corn and wheat were lower. Livestock ended sharply higher.
Soybeans Rally With Bean Oil on Biofuels News
Soybeans rallied with the bean oil market which surged nearly 200 points on Thursday. John Heinberg with Total Farm Marketing says the rally in bean oil was based on a story from Reuters that EPA would reportedly be releasing the finalized Renewable Volume Obligations or biofuels blending levels under the Renewable Fuels Standard in early March. The levels would be similar to the initial proposal from June which included 5.61 billion gallons for biomass based diesel, up from 3.35 billion in 2025. The story says EPA is now considering a range of 5.2 billion to 5.6 billion gallons, with a downward revision due EPA’s plan to ditch the tax credit penalty on imported biofuels.
However, White House trade adviser Peter Navarro, in aguest column in The Hill newspaper, indicated that imported feedstocks would still see a penalty. He wrote that under the EPA’s Renewable Fuel Standard proposal, biofuels “made from domestic soybean oil receive full credit, while fuels derived from imported oils would receive only half credit – ending the practice of treating foreign and domestic inputs the same and shifting demand decisively toward U.S. crops and processors.”
Soybean Export News Favorable
Soybeans were also supported early by strong weekly exports at 75.8 million bu. and flash sales to China and unknown destinations all totaling 27.6 million bu. mostly old crop. Heinberg says that business is badly needed to help the U.S. catch up on total sales which are running 25% below last year.
Will China Keep Buying Soybeans?
There are also question about whether or not China will continue to buy U.S. soybeans after they hit their 12 MMT quota especially as the Brazilian crop is starting to be harvested and is already at lower prices than the U.S. “Don’t forget where they are supposed to pick up 25 MMT this year, next year. So they get their 12 MMT done and keep buying. That’s something the market’s going to be watching extremely closely.”
He says with Conab reducing the Brazil soybean crop by 1 MMT it reflects some lower yields and maybe the impact of the drier weather earlier in the season. “We’re still also in that key window of finishing out that crop in most regions there. So that’s something maybe the Chinese have been stepping into the market to make sure they’re getting some, you know, ground covered just in case. So a little nervous that some of these late sales like this, they’re scheduled for late spring delivery might could turn into some cancellations if that Brazilian crop stays together.”
NOPA Crush Strong
The December NOPA crush total was also strong at 224.992 million bu. and was slightly above estimates. It was also 8.8% above a year ago. This was also positive for the soybean market. Bean oil stocks were 1.642 billion pounds which was below estimates but 33% above a year ago. “It’s just to know that that domestic crush is going to continue to be a major support point for us on bean demand,” according to Heinberg.
Will Soybeans Hold The Fall Lows?
While soybeans have seen a rally off of the recent lows will the October harvest lows hold? Heinberg is fearful that as the record Brazilian crop gets into the thick of harvest that it may be difficult to hold these levels. Conab pegged the Brazilian soybean crop at 176.12 MMT Thursday morning and while this is 1 MMT below last month, Heinberg says it is still a record and that crop will come to market at lower prices than the U.S. which will weigh on our market.
Corn Fails
Corn futures started higher Thursday but failed, hitting the $4.25 resistance area in the March futures according to Heinberg. “We failed there two days in a row, and then finishing at the bottom end of the trading range today, you know, watch this $4.20. That’s an area that some reason on charts just seems to kind of hold prices. I think if we can close under there through the end of the week, that might be kind of a disappointing close,” he explains. He says rising open interest suggests the funds are pushing the short side of the market in reaction to Monday’s bearish USDA data. He says that could make the market vulnerable to a test of the August lows at $4.10 on the March contract. He is also concerned about a selloff into first notice day for March contracts. “We look at especially as we get into that March basis contract pricing window the end of February. You know, first notice day, we’ve seen some strong selling actually the last four years, from February high to March low, we’ve averaged about a $.63 drop. So that’s an area I’m really going to be watching,” he adds.
The fundamental news that hurt the market was the Rosario Grain Exchange delivering a record corn production estimate for Argentina at 62 MMT. “That’s almost 10 MMT above where the USDA is,” he points out. Meanwhile, Conab left Brazil corn production nearly unchanged at 138.87 MMT. Heinberg says the other disappointment for corn was weekly exports were strong at 44.9 million bu. which is record for this time of year. Plus, USDA also reported flash sales of 10.2 million bu. of corn sold to Mexico and another 19.7 million bu. to unknown destinations, both for the 2025-26 marketing year.
Wheat Falls Under The Weight of Supplies
Wheat futures fell with corn but also under the weight of huge global supplies and no real production issues any where in the world. “Global wheat supplies are running relatively heavy and strong. And, you know, again, we’ve had some concerns regarding what’s going on in the Black Sea region and things happening between Russia, Ukraine. Does that continue to kind of escalate? That could be one of the little underlying factors. Obviously, here in the United States, we’re focusing on what’s happening with the KC wheat crop or the winter wheat crop, you know, in terms of dormancy. And as this crop starts to get through the winter. So those are a couple of things that have been supporting the market here. But again, in the overall supply side of it, that is just the pressure the market has to work through,” Heinberg adds. Weekly exports though were solid at 5.7 million bu. and are now running 16% ahead of a year ago.
2026 Acreage Shifts?
With little to no profitability in any crops what will farmers plant in 2026? Will the drop in corn prices discourage any corn acres or shift those to soybeans? Heinberg isn’t so sure. “I think corn acres could stay at a fairly heavy clip, even though the input costs are so high. Producers just seem to like the reliability of the corn side of the equation. And again, there’s still some potential with the global numbers where they are that anything were to happen to the U.S. crop.”
Cattle Futures See Strong Finish
The live and feeder cattle futures staged a healthy recovery on Thursday. Heinberg says the fed market is consolidating in a range waiting for cash direction and if cash trade but he thinks the market could be disappointed this week. Still he thinks supplies aren’t even at their tightest level yet and so he anticipates the market will eventually push back to the record highs from October of 2025. The question will be when in the first quarter that takes place.
The feeder cattle futures made more new highs for the move still chasing a hot cash market. “Obviously the feeder market continues to be red hot. Cash prices at the sale barn continue to be very, very supportive. Throwing cheap corn on top of that
brings those input costs down as well.”
Lean Hog Futures See Chart Breakout
Lean hog futures were higher and the summer months scored new contract highs for a second day. But Heinberg says even the nearby contracts saw a chart breakout above trend line resistance areas. He says while there is some technical buying, the $10 jump in negotiated cash on Wednesday supported the nearby futures, while the back months got help from talk of disease. “At the same time when you get these quick moves in the hog market, they like to quickly go the other way with V or V bottom type operations. So obviously some the producer needs to be focused on those summer months. A move back to $110 on June or July would be an area we want to put a floor in,” he says.
