Grains, cattle and cotton markets ended lower on Friday, with hogs higher.
Soybeans Tank Pulling Down Grains
The soybean market collapsed on Friday ending 16 cents lower on the March contract and made new lows for the move. Soyebans were also down another 29 cents for the week, building on the previous week’s bearish key weekly reversal. Shawn Hackett with Hackett Financial Advisors says part of the pressure was technical selling but the market is also starting to trade the big crop potential in South America. Brazil has been receiving good rains the last couple of weeks and so dry areas have been shrinking and while CONAB lowered their soybean production estimate slightly they still pegged it at a record 177.12 MMT.
Soybean Market Also Doubtful About Slow Exports
The soybean market fell despite additional flash sales of 4.85 million bu. of soybeans sold to China for 2025-26. That puts China’s total for the week at 19.5 million bu. and total business at 129 million bu. or 3.5 MMT. Some firms are estimating China’s accumulated buying at up to 7 MMT with unknown destinations added in. However, soybean exports are still running nearly 40% behind last year and accumulated shipments are 45% behind.
Hackett says the market is coming to the realization that even if China buys the whole 12 MMT it may not be enough for the U.S. to meet USDA’s 1.635 billion bu. export target. “I think there’s great trepidation that we’re going to make the targets. And if we do make the targets, maybe we make the targets later on than the year, not now,” he says.
Biofuels Policy Uncertain: EPA to Delay RFS RVOs
Soybeans, soybean oil and corn also saw pressure as Reuters on Friday reported that the decision on the Renewable Fuels Standard Renewable Volume Obligations for 2026 and 2027 is likely to be punted into next year, extending the uncertainty regarding biofuels policy for U.S. farmers and the agricultural sector. The delay raises expectations that the administration will attempt to strike a broad agreement between rival oil and agricultural interests – a tough task, the report said. The EPA told Reuters it was still reviewing public comments on volume requirements, offering no guidance on timing.
Uncertainty over biofuel demand has been seen as a headwind for corn and the soy complex says Hackett. Domestic demand for soybeans, pushed by record crush pace, is picking up some of the slack from lost exports. Still, biodiesel and renewable diesel production has slowed due to the uncertainty over biofuels policy. This includes the Renewable Fuels Standard blending mandates for 2026 and 2027. Plus EPA’s proposal to penalize imports of biofuels and foreign feed stock by only allocating a half RIN may be delayed for two years.
“One of the really, really important features of what was supposed to be this rearrangement of the rules was that we were going to not allow used cooking palm oil to come in carte blanche and be able to compete with bean oil. We were
going to try to make it to where we would be using most or as much of domestic produced bean oil to make renewable diesel. Then all of a sudden, it seemed like the rules changed and they’re going to allow these supplies to come in again, hurting demand for domestic bean oil, which defeats the whole purpose of trying to find other sources of demand, not just Chinese exports,” he explains.
How Low Do Soybean Prices Fall?
While the January contract took out long term support on the charts Friday at $10.80 and closed below that area. Hackett says the March soybean contract has chart support around $10.75. If that level is taken out it is possible the market could fall further. “We could probably take the March contract down maybe the $10.50 area, you know, on a technical basis. And then I think we might spend some time there until we can get a better handle on what we just mentioned about the rules of engagement for renewable diesel and making sure this big crop actually, you know, comes in on time in March in South America,” he adds.
Does Corn Get Pulled Down with Soybeans?
Corn closed nearly 6 cents lower on the March contract Friday following soybeans. So, if soybeans continue to fall will corn follow? Not necessarily, according to Hackett. He says corn can trade independently and has a better demand story than soybeans. He is also looking for USDA to cut yield in the final crop production report in January.
Will Corn Ending Stocks Get Under 2 Billion Bushels?
Hackett says with record export demand and lower yield he’s optimistic corn ending stocks can fall below 2 billion bu. “Oh, I think we’re going to get way below 2 billion bushels. I mean, if you think about where the USDA is now, let’s say they were to come down to 178 to 180 bu. and you have demand what it is. I mean, you easily get yourself in that 1.5 to 1.7 billion bushel carryout range,” he adds.
Wheat Plagued By Lack of Weather Problems
USDA confirmed the large global supplies in the WASDE on Tuesday and a 3. 5 MMT increase in global carryout as many countries had record crop projections. Argentina raised their production estimate another 2.2 MMT Friday to a record 27.7 MMT crop. And Hackett says there are just no weather problems to get the market excited.
Glimmer of Hope for Cotton?
The cotton market has not been able to catch a break in 2025 and one of the main culprits has been the lack of China export demand. Hackett says that could change in 2026, not because of the China trade framework, but because of qualitative easing announced by the FOMC this week. That could finally stimulate the kind of demand needed to support a correction in the cotton market.
He says, “While everyone focuses on interest rates and what they do with interest rates this past meeting, the more important feature is they’ve left quantitative tightening and they’ve instilled and begun a new round of quantitative easing. That is printing money, buying one to three year treasury bills, pumping money into the system. And that money typically increases flash sales coming in from cotton exports for the U.S. and that could get the cotton market to firm up those ending stocks and those balance sheets.”
Cattle Futures See Healthy Correction
Cattle futures saw some corrective selling on Friday which Hackett says was no surprise as the market was overbought. Futures have corrected over 50% off the lows on short covering, extremely cold weather and cash strength. Fed cash prices were up another $6 this week in the South at $230.
Can the Recovery in Cattle Continue?
However, Hackett says those factors are priced in and with boxed beef values weakening from the highs he doesn’t think the market can retest the record high futures prices hit in mid-October. “I think $235 as a reference point on the April contract is as high as the market can go. I don’t think we’re going back to the all -time highs. I don’t see anything that says demand is going to be robust enough to do that.”
