Market Analysis
Vince Boddicker with Farmers Trading Company says grains took the path of least resistance on Wednesday trading lower with a lack of fresh bullish news.
Corn and wheat futures were lower early Wednesday seeing some profit taking after a higher close Tuesday says Darin Newsom, senior market analyst with Barchart.
Darren Frye with Water Street Solutions says the market was adding some geopolitical risk premium with tensions rising in the Black Sea region.
Randy Martinson with Martinson Ag says so far its estimated China purchased 3 MMT but in order for China to keep on pace it would need to buy over 2 MMT a week through the end of 2025.
The entire grain complex saw profit taking Monday after hitting chart resistance according to Allison Thompson with The Money Farm.
Brad Kooima of Kooima Kooima Varilek says he would be more confident about the lows holding in the cattle futures if three factors would turn positive.
The question now is was this just a correction of the oversold status in the cattle markets? While a higher weekly close is positive, Varilek says recoveries often come in three day waves.
DuWayne Bosse with Bolt Marketing says grains staged a surprise rally on news of China soybean buys but farmer selling pressure also subsided ahead of first notice day on Friday.
Hillari Mason with Pro Farmer says farmers had to roll or sell December futures or basis fixed contracts before Wednesday or risk delivery and so most of the commercial positioning is done which will take pressure off the market.
Mike Zuzolo with Global Commodity Analytics says the grain complex also saw some buying interest on the lower U.S. dollar index, which reacted to U.S. economic data.
Jamie Gieseke with Paradigm Futures says the weakness in the grain markets last week and to start this week was tied to liquidation and pricing of basis fixed contracts against December futures before the delivery period starts. Once that’s out of the way what is the next move?
Dave Chatterton with Strategic Farm Marketing says the soybean market is tired of rhetoric and wants to see results in the form of sales to China.
Brad Kooima with Kooima Kooima Varilek says cattle were limit down early Monday on news that Tyson Foods will be closing its Lexington, Neb. beef processing plant on Jan. 20 and the Amarillo, Texas plant will go down to one shift.
Chip Nellinger with Blue Reef Agri-Marketing says the soybean market has corrected its overbought status with the profit taking by the funds so the selling pressure may be over.
Scott Varilek with Kooima Kooima Varilek says the market had been anticipating the tariffs to be lowered on Brazil beef for several days and it was part of the recent selloff in cattle. “So I think a lot of this was already penciled into prices.” he explains.
Jim McCormick with AgMarket.Net says soybeans continue to sell off though as this business has already been priced into the market with the nearly $1.50 rally off the lows.
Grains futures saw sharp losses on Wednesday on profit taking according to Rich Nelson with Allendale, Inc. However, there were several other factors at play.
Kevin Duling with KD Investors says the additional six cargoes of soybeans sold to China were part of the rumored business earlier in the week and have already been priced into the market.
Mike Minor says the agency reported 29 million bushels of soybean purchases Tuesday morning which brings China’s total to from 8% to 12% of the total 12 MMT commitments they’ve made.
Randy Martinson says confirmation of 29 million bushels of soybeans sold to China is already priced into the market after the big rally to 17-month highs in soybeans. So, the market is seeing a traditional “buy to rumor sell the fact” reaction.
Soybean futures closed nearly $.33 higher on the January contract. Craig Turner with StoneX said there was unconfirmed market talk of multiple cargoes of soybeans being sold to China through the Pacific Northwest.
Brad Kooima with Kooima Kooima Varilek says the fear of Brazilian beef tariffs being lowered was part of the selloff in the cattle futures last week. However, Brazil tariffs are still at 66.4% so he says it was already priced into the market.
Arlan Suderman, chief commodities economist with StoneX says USDA only lowered national corn yield .7 bushels per acre to 186 which was a disappointment for the bulls.
Scott Varilek with Kooima Kooima Varilek says the funds continue to liquidate their long positions on the fear of the Mexican border reopening but lower fed cash is also a negative.
Don Roose with U.S. Commodities says corn and soybeans saw chart breakout with fund buying heading into the USDA report on expectations of lower yield but also watching for China buys in the daily export sales.
The grain markets fought off early weakness on Wednesday to close near the highs of the day and stage a strong technical close according to Bryan Doherty, Total Farm Marketing.
DuWayne Bosse with Bolt Marketing says grains are fading the reopening of the government on positioning ahead of USDA’s reports on Friday and the lack of China soybean purchases.
Chuck Shelby with Risk Management Commodities, says grains were mixed positioning ahead of the USDA reports with corn getting some support from lower yields in the average trade estimates.
Vince Boddicker with Farmers Trading Company says soybeans are mostly lower seeing some Turnaround Tuesday profit taking but the grains are also hearing up for the USDA reports Friday.
Sam Hudson with Corn Belt Marketing says part of the rally in the grains was tied to talk of the government possibly reopening this week. That provided a risk on environment for the bulls who have been flying blind with the lack of market data from USDA.