Grains were mostly higher, except for corn. Cattle closed mixed with hogs higher.
Wheat Leads
Wheat futures made new highs for the move in all three classes with soft red winter wheat closing above the 200-day moving average. Sam Hudson with Corn Belt Marketing says the wheat market is seeing fund short covering but is some risk premium is also being added. “You’ve had a few production concerns, not only in the U .S. but in the Black Sea region, on top of plenty of, you know, tensions and geopolitical risks across the Middle East. And sometimes that’s just a driver to get people to the sidelines in general.”
Can Wheat Build on the Rally?
However, Hudson doesn’t think that means wheat can stage a much bigger rally. “I don’t know that I’m sitting here thinking that funds have to turn around and go long to wheat market, though.” He thinks in the market will need to clear the $5.80 to $6.09 range first. “When I look at weekly and some of the longer term charts, that probably signals that something else has changed, a definitive change. And with that being said, you don’t just have to look at the, you know, the price of these other
grains, if that’s the case. I just not expecting that here at this moment.”
Corn Can’t Follow Wheat: Why?
Even with the strong day in wheat, corn did not follow the wheat market. Hudson says this is farmer selling tied to first notice day and the delivery period coming up for the March contracts next Friday, plus option expiration this Friday.
“You’re forcing the longs to the sideline. We still had a lot of open interest piled up into that. And we actually tried the chart resistance here a couple times here over the past few weeks or up around the $4.30 to $4.35 zone and the the market just, you know, stalled out and couldn’t overcome that. I almost wonder once you get March off the board, if you can’t go out and take, you know, go back up and take those highs out, especially if the soybean market continues its gains.”
He says through late January and the beginning of part of February, it’s very difficult to move grain. “And so you still have a lot out here just on the cash side on the front and it still needs to be delivered. And that could even carry over into the May contract as well.” He is hopeful it won’t be a bloodbath like the corn market saw at the end of February last year.
USDA Ag Outlook Forum Lowers Corn Acreage
Corn also ignored the 4.8 million acre decrease projected for 2026 plantings at the USDA Ag Outlook Forum Thursday morning. Hudson thinks that number is realistic but he doesn’t put a lot of weight into it yet. " I would say the 94 million number is probably on the low side of what we should expect. And part of the reason I say that is because it’s so dry everywhere, I still think it right now as it sits, if nothing changes, you’re still looking at a historically low level of prevent plant, which is just more acres in general. I think the issue you get into is if you can’t hit 94, now you really have to have a big yield or you got to cut demand somehow. And the only way we can do that is with higher prices. So everything has got to be a pencil for the time being. But whether it’s 94 or 94.5 or 95, the yield is still going to need to be North of 180 for this market to, you know, avoid getting stocks to usage too low.”
USDA also used a 183 bu. per acre yield, which is 3.5 bu. under last year. Hudson expected USDA to use somewhere around 184. “You know, again, similarly with the acres, as long as you’re between 183 and 185 starting out, it almost doesn’t even really matter. I think we have to recognize what it takes to get, you know, yields like we had last year, though. And if you have fewer acres to do it on, now you have to have even higher yield yet in some of those spots. So I think you’ve got to have your ears perked up with as strong as the demand is. I mean, right now we’re using about 1.6 billion bushels more than the crop we even raised last year. And so if you have to peel back anything on the supply side anytime this summer. Not only will you have to do that, but you may actually have to boost some of our demand figures that going into it that we’re already seeing paces being beat.”
USDA lowered ending stocks to 1.8 billion bu. but Hudson thinks there is risk of that number being lowered with the way exports have performed.
Soybeans Make Fresh Highs on Demand
Soybeans made new highs for the move with bean oil hitting new contract highs. Hudson says the market is pricing in ideas of increased China export demand and improved demand for bean oil for biofuels.
He explains, “I mean, you know, again, we kind of started the ball rolling again with all these Chinese headlines with some meetings upcoming here in April. And hopefully we can hold those gains at least between now and then and then see how those meetings go. But the biofuels optimism is still there. You know, we talked about the ag forum numbers. The USDA seems a little bit more apt to project a little bit more demand on that side of the coin. And I think we have to continue to expect that. Our crush numbers that we got this week are running 11% ahead of last year’s numbers thus far, and USDA is still only forecasting 5% increase. And so it’s good to see them going out there and boosting that a little bit, but it feels like they got some catching up to do on this year’s balance sheet to start out with.”
Soybeans to Test November Highs?
With China on holiday until March 3 will the market will not be seeing any flash sales to confirm the added 8 MMT of business that is expected. Are proof of those sales what the market will need to retest last November’s highs? Hudson says, “Well, I think that’s possible, but they’re already within shouting distance. I’m not so sure we can’t do it, you know, anyways. Funds aren’t necessarily at a record length. You know, another 20, 30 cents to push higher after what we’ve seen. I don’t think it would be too much work for the market. But to get beyond that, I think, will. And I think the risk for the producer side is that these talks fall apart. And then you see a correction in that soybean market right ahead or right during springtime where we go to plant. And so if anyone’s making those decisions to plant more soybeans, you’ve got to be able to protect that.”
What is Hudson’s advice regarding hedging new crop soybeans? He says, “Soybeans are looking at that pricing dynamic as you’re already going to have Brazil ready to raise another bean crop. But there’s really no one there to stand to reproduce a corn crop if we screw that up. So I think it’s a little bit easier to start getting your feet wet with any hedges if those margins are there for you or you’re making decisions based on that.”
USDA Raises Soybean Acreage in Forum
USDA raised soybean acreage nearly 4 million acres in the Ag Outlook Forum to 85 million acres, but left ending stocks nearly flat at 355 million bu. This is a good illustration of just how much demand is improving the outlook. “And they used trend line yield of 53 bu. per acre which is the same as the final yield from last season. And still what’s very surprising to me, Michelle, is the way that, you know, the three core principal crop acres being at 224 million. It’s slightly less than last year. But to
see us, you know, planting that many collective acres with the margins that we’re seeing out here just, it doesn’t really make sense. I think some of this has been an insurance and government payment driven. And I guess we see how all this pans
out here over the next few years, depending on what prices do, probably more importantly, the inputs.”
Cattle Await Cash News, COF
Live cattle futures were slightly higher but are still trading under the Feb. highs. Hudson says the market is waiting for fresh news from the cash market or the Cattle on Feed Report. “And the fact that we haven’t had any real tumultuous headlines like we were seeing back in that, you know, October, November, December time frame. The market’s been much more stable. I think that’s good for everybody included. It just kind of lets things fall into place and let you know where you are and where you need to be as opposed to just wondering where you’re going to be tomorrow. We’ll see what the Cattle on Feed report says. But, you know, one thing to keep an eye on here going into spring as the temperatures warm up is just, you know, what these prices of cuts do as grilling season starts to approach us and what we can expect to see on the demand side all the way around. I think that ties right into the pork and poultry markets as well.”
Hudson is in the camp that the market will eventually retest the all-time highs from October, the timing is up for debate. “I don’t know how long lived it’ll be, though. And, you know, I hate to go out here and say this, but it seems like at some point you’ve got to, you know, find some sort of plateau here because you can’t rebuild a herd in one year. But I think the problem we’ll have moving forward is when we realize we’ve started down that road, you know, made good strides. And then we find out there’s still a lot of animals south of the border that maybe they’ve gotten used to having around. And so I think that’s going to be kind of a new normal for this market, but I just don’t know what that looks like yet.”
Hogs Up For a Third Day
The lean hog futures saw short covering again and were up for a third day. “Maybe some bottom picking. You know, we’ve had a pretty good drop since we made a double top on the highs in those April and May charts. Not saying you couldn’t break through those lows and flush them again, but it feels like enough damage has been done for the time being, especially if the cattle market is going to hold its own.”
