Happy Veterans Day and Thank You for Your Service!

The Tuesday trade was a choppy, low volume affair with mixed closes as another day went by without confirmation of Chinese bean purchases. Without cash sources confirming the bean sales that rallied the markets last week, the bulls are feeling some nerves heading not Friday’s first USDA yield update in two-months. The daily trade into Friday’s report is not expected to be much different than today’s unless some positive Chinese export news is released.

News and Notes:

• The US Midwest, Delta and ECB will see a quick warm-up after another wintry night that saw the coldest early November temperatures since 1976. Our dogs (nor I) liked this morning’s 20-degree walk. SA weather remains ideal with a warm, dry week ahead for Argentina after recent heavy rains while Brazil continues to see a mostly perfect mixture of sun, rain, and temperatures. Brazil’s planting progress is a little below average at 64% for beans and 72% for first crop corn.
• The November daily bean chart is on Page 2, and I condensed it to just the 14 trading sessions to the rally since the potential trade deal with China was announced. The 77-cent rally has now settled into a comfortable 30-cent range ($11.08-$11.37) waiting on confirmation of cash sales to China (absent so far this week) to press higher and/or a sharp cut in yield in Friday’s USDA report to spark a larger breakout toward $11.50 or above. Conversely, if both factors go the bears direction, the gap (blue box) left by the gap higher opening on October 27^th from $10.63 to $10.70 ¼ will be the initial downside target with a solid layer of support  from $10.47 ¾ to $10.59 ½ by the 200-DMA (red line), 100-DMA (pink) and the 50-DMA (green). The downside risk is becoming much larger than the upside potential moving into Friday’s report.
• The Iowa gubernatorial race may be a great litmus test for big ag states trying to slow the rise of farmland values driven by foreign and out of state non-ag related buyers. Democratic Candidate Rob Sand proposed higher taxes on out-of-state property owners. For the last decade, the trend has been non-Iowans buying ground and public property records indicate that roughly 50% of all of Iowa’s farm ground is owned by out-of-state owners. In 2022 alone, 25% of all farmland sold was sold for investment property to huge private pension funds and other deep pocketed investors.
• What weekly bean shipment records that are available showed last week’s shipments were 54% behind the same week last year and continued to fall further and further behind. If China does not step in and begin purchasing the 350-400 MBU in the trade agreement, the USDA will be forced at some point in the first quarter of 2026 to slash the US exports and add every bushel to ending stocks.
• By recent standards, today’s cattle trade was boring despite the follow-through buying from Monday’s limit up gains. With only $3 daily ranges and modest $1.25-$1.35 losses in live but $2.65 gains in feeder cattle, the market continues to trade nervously waiting on tweets from Washington.

The market moving news this week is concentrating on Chinese trade follow through and Friday’s USDA yield report. My concern is that beans cannot find enough buyers to break out for a new higher leg and that a normal USDA slow walk-in cutting yields into the January report will spook the recent bulls for the potential of an ugly correction after the report. Corn and wheat would be pulled lower as well and corn may have its own problem if the USDA does not cut yield down to the 183 average trade estimate. Have all catch-up sales made before the Friday 11 am cdt release and call if you have any questions about a budgeted re-ownership strategy if missing out on any rallies into year-end worries you.