Markets Continue Lower Tuesday

A few pieces of negative news added to bearish charts to push prices lower again today with beans falling back to fill the chart gap left by the October announcement of the Chinese trade deal that wasn’t. For the first morning in several trading sessions, there were no daily flash bean sales to China announced to further disappoint the demand bulls while the EPA announced that their renewable fuel guidelines will not be released  until early 2026 which only added to the bearish pressure. Crude oil prices fell to their lowest daily close since March of 2021 to add additional bearish pressure on the bio-fuel components of corn, ethanol, bean oil, and beans. Wheat was not spared of its own bad news as China cancelled several previously purchased US wheat cargoes in order to replace them with cheaper world wheat. Add all of today’s bad news to continued non-threatening SA weather and although the markets may be strongly oversold, they can remain that way much longer than it takes for the bulls to mount a reversal rally.

News and Notes:

• The upcoming 30-45 days of key SA weather is starting out with little concern as both Brazil and Argentina are well-watered with no forecasts of stressful temperatures. Record SA  yield per acre and total yield results are in the making.
• The January daily bean chart is on Page 2 and shows today’s success in falling to fill the months old chart gap. The technical traders now have a complete chart, and their only concern may be oversold conditions that could lead to the occasional rally. The 200-DMA is 8 ½ cents below today’s close and with the strong bearish momentum, a test of that price seems likely going into the weekend.
• Big changes to the 2026 crop insurance program rates have been announced with the county endorsement premiums 43% cheaper than last year and almost 65% lower than 2024. Individual coverages will also be cheaper from 13% at the 75% coverage level to 5% at the highest 85% level. The tie between SCO and ARC-County was ended. Your crop insurance agent will earn their commission this year so make sure they know all the changes and can explain the choices, so you buy the correct policies and coverage for each farm. Lower corn and bean prices and more consistent yields in all regions are behind the lower costs.
• While old crop contracts have been under the most pressure recently, the calendar will soon be turning to 2026 and the trade fine tuning estimates on planted acreage this spring. With cotton, rice, sorghum, canola, beans, and corn all at levels below average break evens, it is hard to calculate the upcoming swings in the US acreage matrix, but corn’s increasing annual yield may be the factor that attracts more acres than expected to further temper any bullish summer outlook.
• With all the other noise out of Washington last week, we need to concentrate on the reality of the Farm Bridge Payment program that will be sending out tariff relief payments by the end of February. Please go to the Farmer Bridge Assistance (FBA)website to understand the requirements for sign up (through December 19^th) and the caps ($155,000 per entity and an $900,000 AGI cap) and the other nuances of the program. Thanks for the feedback that many FSA offices have NOT heard anything about this program and have not provided much insight. I feel bad for those individuals who run the local FSA offices, because the government and the USDA are terrible about communicating through the system.

Optimists lean on the old adage that it is always darkest before the dawn, but with the shortest sunlight day of the year coming this Sunday, we may need some help to finish the week before we see more sunlight. Every possible bearish factor that could develop over the last 6-7 months has appeared and stayed around like an uninvited in-law at the holidays. The EPA and China have shown that little demand expansion is on the horizon and even if there was, the choking global supplies would only start a global game of musical chairs for where the bushels are stored. The market is full of certainty right now, but the bulls need uncertainty to gain any footing.