Mixed Closes on Solid Old Crop Bean Bounce

After Tuesday’s comatose reaction to the December USDA report, the markets tried to push lower in early trade before a decent bounce in old crop beans helped prices finish mixed. The grains moved slightly lower in another dragging two-sided session for corn which kept both old and new corn prices stuck in the middle of the month-old ranges. As details were released about the Farm Bridge Payment program that promises checks for US farmers and crops effected by the trade war, the trade is now considering how to position into year-end in a world ag landscape that is over supplied with too many acres in both SA and soon to be in the US to further aggravate a three year old problem.

News and Notes:

• The first Polar Vortex of the season is descending on the upper and central Midwest this weekend with brutally cold sub-zero temperatures through early next week. A major snow event is not associated with this front, but some snow is expected throughout the Midwest next week. A quick warm up is forecast heading into Christmas. SA weather remains perfect with a perfect mix of rain and sunshine into the end of the year. This forecast confirms WASDE’s record expectations for Brazil and Argentina’s yields this spring.
• The Farm Bridge Payment Estimates are on Page 2 with more information in the next bullet point. The ongoing cycle of disrupted trade by government policy and low grain, soy and cotton prices is driving the USDA to send out these payments. The bottom line for these payments is that they will not make any operation rich, but they will help balance the 2025 books and help clean up the outstanding debt to lenders. The balancing of the 2025 loans will lead directly into the re-starting of the 2026 loan cycle to help finish pre-pay season and provide cash and lines of credit for the start of planting this spring.
• Eligibility requirements for the Farm Bridge Payment (FBP) is any operator “actively engaged” in planting cotton, corn, wheat, beans, and other crops. Adjusted Gross Income level of $900,000 will be part of the qualification criteria. The per entity cap is up to $155,000 per farm, which is consistent with prior program guidelines.
• To begin the application process, gather your 2025 acreage reports and head to your local FSA office by DECEMBER 19^th. Questions can be directed to farmerbridge@usda.gov.

• The Federal Reserve cut rates by 1/4 point to cap the 2025 meetings after 3 cuts this year. The follow up commentary by Federal Reserve President Powell gave some confidence to the equity trader’s that the Federal Reserve is not a the end of the rate cuts for a long-time, but that the outlook for the US economy is positive for 2026.
• A flash sales announcement this morning had China as a bean buyer of 5 MBU with another 12 MBU sold to Unknown destinations. January bean prices fell to new 6-week lows in early trade before prices bounced to post modest gains. The funds are still holding a sizable net long position in a market with no Chinese trade deal and expectations of a record SA crop with harvest starting in less than 6-weeks. Today’s bounce was more technical than fundamental, and any further strength needs to be rewarded to finish old crop sales. The $1.07 rally after the “misleading” Chinese trade deal breakthrough, is now a distant memory with the gap left from the breakout still the downside target

The bean market has shown us that computer-based trading models that only follow headlines and make purchases or sales on single words in tweets or press releases have a serious flaw. While the markets rallied and several major systems continued to buy beans while grateful farmers should have been active sellers during the rally. With the reality of a government that is more interested in sending out checks to buy votes for an election 11-months away, than finding ways to expand world demand for US ag production, the upside for all US ag products is limited. The 3-year agony of negative margins will continue well into 2026 without a severe weather problem in the next 6-8 weeks in SA or an unexpected delay in the FBP checks that cuts US planted acres by 5-6 MA between corn and beans.