Grains Rally Against the Tide as the China Question Looms

The grain and soy markets moved higher again today with corn and wheat following beans strength after the surprise sales agreement announcement to China. Today’s gains are even more impressive considering that every other major market, from equities to energy, were down sharply again today as investor selling is accelerating citing concern over US employment numbers and general uneasiness following the massive rallies in those markets over the last several months. Friday sets up another end of week session that will be closely watched as our markets normally cannot trade independently from a major outside market swoon for too long and to see if farmer selling caps the rallies.

News and Notes:

• Improving rain totals and coverage in Argentina on areas where their corn crop was stressed is not part of the market conversation today, but there is no weather story in SA to add to the bullish demand news. US weather will remain seasonal into mid-February.
• The March daily corn chart is on Page 2 and shows the hard-fought gains since the January 12^th report that pushes prices back into the lower end of the 4-month range. The funds remain short but have to be closely watching this counter-seasonal rally to protect their 2026 gains. Initial overhead technical resistance is at the 50 (green line), 100 (pink) and 200 (black) day moving averages from $4.37 ½ to $4.41 ¼. If old crop futures contracts can reclaim all of the January USDA report losses, the bulls will have to be impressed with themselves and have momentum on their side.
• The Sales Target for 2025 corn hit today with another 10% sale against the March contract. This takes sales to 80% complete for old crop corn. Corn prices have rallied 15 cents since the devastating January USDA report lows. Please see the updated Sales Targets on Page 2.
• Also consider pricing some old crop beans as prices rallied and stopped just short of this week’s high and are 75-cents higher than the January lows. Please call me with questions as this week’s trade developments are presenting some opportunities for re-ownership in corn and floors in beans.
• Weekly export sales were disappointing, with none of the markets above estimates with most on the low end. Corn’s strong sales week, 2-weeks ago, has not been repeated and shows that world buyers are becoming more patient with $4.25 March futures the trigger area for purchases. Technical rallies have their own forces, but corn cannot rally in a vacuum of good charts and slowing sales.
• Front month live and feeder cattle had their biggest daily losses since late October as a flood of selling moved across every other market besides the grains and soy. Wednesday’s trade filled the gaps left from the avalanche of three limit down days and chart gaps from October when President Trump took aim at high beef prices which opened the door for some profit taking from the $40 rally since Thanksgiving in April live cattle. Friday’s trade will be interesting if today’s ugly reversal scares more late arriving bulls out of the door ahead of the weekend.

The questions for the bulls and bears moving forward is do you believe China agreed to buy another 280 MBU of beans? Is this just another announcement by Trump on an event that may take months or years to accomplish? Deciphering Trump talk and China action have been the biggest contributors to volatility since the tariff and trade war started last April. The bears are pointing toward a lack of confirmation from the cash market that China is looking for beans and if they were, they would be buying them from Brazil at a $1 + a bushel discount. The bulls argue that China ultimately did buy the 440 MBU that were announced in October (35% shipped to date) and if they follow through on the new totals, it will significantly change the US bean balance sheet in 2026. It would also start an acreage battle this spring, where corn will not lose more than the 5 MA of normal rotation while beans may need more than 5 MA of swapped corn acres to meet that demand. There will be quick decisions and volatility, but there will not be a quick answer to the above questions. Continue to sell rallies (unexpected or not) to continue the good habit of planning and then executing your marketing plan.