Beans Break Through $12 as China Keeps Buying

Sharply higher grain and soy markets started the overnight session on a combination of extended dryness for the WCB, higher crude oil prices, Chinese demand rumors and technical breakouts all helped fuel the sharp gains before the morning forecasts had some moderation in the heat with better rain chances. Wheat had a key reversal to close lower as the recent spread trade of long wheat and short corn was unwound to hurt wheat and help corn. Morning bean sales to China and Unknown (probably China) were announced with a decent corn sale to Colombia. The weekend developments in the Middle East and the Black Sea are also supportive as the unknowns of world shipping and US weather are adding considerable support to the ongoing Chinese presence in the US export market.

News and Notes:

• The hottest of this week’s temperatures are in place for the west and central Corn Belt before more seasonal temperatures move in later this week. Those areas will remain dry while the ECB has the best chances of rain as the high-pressure dome settles in over the WCB.
• The daily November bean chart is on Page 2 and shows today’s emphatic breakout over the old contract high with an  impressive gap opening. It has been about 3-years since the new crop contract traded an entire session over $12, which is equally impressive. The contract high for the Nov ’26 contract was set in late Dec ’22 at $12.44 and today’s strong close implies that it will be the next target as all significant technical and moving average resistance has been cleared. Today’s close was $12.25 with a daily high at $12.21 ½. The RSI box in the bottom shows this contract has become overbought (69.66 reading) after the $1 rally since the June 15th summer low.
• China’s announced purchase this morning takes their known purchases to just barely 10% of their “trade deal” commitment. China needs to average 36 MBU of beans per week in 2026 to reach that goal. If European corn and wheat yields are as bad as expected, China will be in the market for US grain bushels during harvest.
• After nearly three weeks of continuous losses in cattle, prices bounced sharply today with August feeders up over $6.5 for the session. August live cattle futures are at a deep $22 discount to last week’s live cash trade. Cattle should be finding a very tradable low.
• Weekly crop conditions were both better than expected with corn just down 1% to 67% G/E while beans enjoyed last week’s heat and improved 1% to 66%. The most notable readings were 2-3% increases for both crops in Illinois and Iowa. This will put overnight pressure on prices as the trade was widely expecting 2-3% decreases. The Dakotas were the only major production states to see sharp declines as the N Plains drought and heat was more acute.
• The 2026 bean crop Sales Target was hit in early trade to move the total to 60% sold with previous call option re-ownership to help encourage sales and hopefully add to previous sales. The updated Dec ’26 corn Sales Target $4.82) is just 6-cents above today’s high and easily within a decent rally.

The volatility has returned, and after the bludgeoning of the volatile selling in June, the bullish volatility is a very welcome change of pace. There are several key factors that do not have a quick resolution as the US and Northern Hemisphere forecasts continue to be yield negative while the new consistent trend of near-daily Chinese bean purchases from the US will only be topped if they are mentioned in a few corn purchases. Despite today’s crop ratings bearish surprise, the US crop potential is in decline in many areas, not increasing. The markets are digesting both sides of the issues but the bullish developments in July have not only raised the worst-case scenarios for the “harvest” low price, but it has also added considerable upside from the early year highs on any escalation of world yield loss and demand. Make catch up sales as Dec corn is now up 50-cents +/- since the June 30th low while Nov beans are now $1.04 over the June lows. Although wheat pulled back from new contract highs today, taking out the May high of $7 seems inevitable.