Holiday Week Finishes in the Green

Early strength from a dry 10–14-day outlook for Argentina faded through the session as prices closed mixed but positive for the week. Crude oil prices reversed sharply to add weakness to the raw material sector despite gold and silver posting new all-time highs. Thursday’s closure to celebrate New Year’s Day will chop up another holiday volume week, but with the quickly changing dynamic of US action toward Venezuela, the energy sector could become volatile, and any strength would support corn and beans and the bio-fuel markets.

News and Notes:

• Beans got a late week boost from a 10-14 dry forecast for Argentina, but the ample sub-soil moisture will allow for minimal crop stress unless mid-January forecasts remain dry. Brazil in almost every major production region is in the best shape in years. Corn and bean harvest will commence in early January in the far northern regions of Brazil with the winter safrinha corn crop to begin planting in less than 6-weeks.
• The daily new crop charts for corn, beans and wheat benefited from the Santa Claus rally this week but did not rally far enough to push out of the monthly ranges. Corn is showing the most potential as it rallied after last week’s test of the lower end of the range and the 100 and 200 DMAs ($4.60) to rebound and push above the 20 and 50 DMAs($4.65) with the 6-month highs of $4.73 ½ the next upside target. Beans also bounced early in the week after making new 2-month lows. Both corn and beans are respecting technical support at the 200-DMA. Wheat is a train wreck of a chart as world cash prices continue to fall as Argentina dumps their record wheat harvest.
• Both Argentina’s and Brazil’s crop estimates continue to be in record territory with Argentina’s corn crop expected to be 2.4 BBU +/- while Brazil’s bean crop approaching 6.6 BBU with total SA bean production easily exceeding 8 BBU. Without a hot/dry weather pattern in SA in the next few months, world ag production will again easily outpace global demand. An even distribution of record world ending stocks in corn, beans and wheat will again cap rallies in 2026.
• Crude, diesel, and natural gas (chart Page 2) prices all remain at least in the lower third of the annual range with natural gas prices dropping after the warm Christmas week in the US. Crude and diesel prices have a neutral to bearish fundamental outlook based on President Trump’s wish to keep gas prices low, but a cold finish to the winter will rally natty gas prices. Look at hedging a portion of your 2026 natural gas needs this week.
• With only four business days left in 2025, the original trade deal deadline for China to buy 440 MBU of US beans of December 31^stwill pass, but not without progress. China went the first several months of 2025 without buying any US beans but have purchased over 250 MBU in recent months. It is very different from their pre-Covid levels of buying over 800 MBU of US beans, but the world trade dynamic between China and Brazil and the US and China are much different than 6-7 years ago.
• Weekly Changes: Corn +6 1/4 (March ‘26), +6 1/2 (Dec ‘26), Beans +9 1/2 (Jan ‘26), +14 1/2 (Nov ‘26), Wheat +10 3/4 (July ’26), Crude +8, Diesel -149, Dow +533, US Dollar -554, Cattle -115, Feeder Cattle +58, Hogs +3, Cotton +74, Milk -32 (15.29).

Another holiday interrupted week of trade lies ahead with US markets closed on Thursday for New Year’s Day, hangover treatment and watching football. Very little has changed in the last several weeks since the US trade representatives announced changing deadlines for the Chinese purchase of US beans as South American weather is non-threatening and other world developments lean neutral to bearish prices. The Monday January 12^thUSDA/WASDE report to update the “final” US 2025 crop yield and balance sheets is the biggest event on the horizon as the bulls need the USDA to cut yields to set up a winter rally into SA harvest and US planting. Sunday’s opening calls are mixed to slightly lower following Friday’s failure to extend the Santa Claus rally. Have a great Sunday.