October 30 Comment

Lower tariffs, better access to the world’s best AI computer chips from US based Nvidia and bean sales were the drivers of the massive overnight and daily market swings in everything from the equities to the bean complex. With promising steps toward a less  contentious political and trade relationship with China, the speculative and end user communities can move into the end of the year with some additional certainty, maybe. The week and month will end with everyone trying to let the dust settle on fact and fiction from today’s news while continuing to weigh the expanding acreage and great early growing conditions in Brazil and Argentina.

News and Notes:

• The coldest weather of the season has descended on the Midwest along with a cold rain and northern snow. The unseasonable cold will slow the final stages of harvest. SA weather remains consistently great from N Brazil to Argentina with a great mixture of sun and rain for early development.
• The December daily corn chart is on Page 2 and shows the difficulty of the bulls to push through the stiff overhead resistance at the 200-DMA and the bottom of the top end of the summer highs. The chart does not give me an overwhelming sense of confidence that the funds alone can push prices into a new higher range as world demand remains relatively flat compared to expectations while US and world stocks are more than ample and do not support higher prices without a growing season problem in SA in January and February.
• The cattle market continues to see wild daily swings on strong cutout markets but fears that President Trump turns his attention to lowering cattle prices now that the trade battle with China is mostly negotiated and done. Expect more crazy volatility in all the markets as everyone from the funds to the end users have to reset and get comfortable with the new trade landscape.
• Today’s rally in old crop beans and losses in 2026 new crop beans shows that farmer hedging has moved on to next years crop. Although some of the volume can be attributed to bull spreading by the funds, the reality is that new crop 2026 prices do not need to rally to motivate Brazil to expand acres even further. Rabobank expect Brazil’s planted acreage for corn to increase 2.2% to 54.8 MA while bean acres are expected to increase by 2% to 120.6 MA. Curiously, their total corn yield is called lower by 3.5% to 5.4 BBU while total bean yield is expected to increase by 3% to 6.5 BBU. Considering how good of a start Brazil’s crops are off to so far, these totals will add significantly to world stocks.
• Details of the trade deal with China continue to slowly leak into the market with some news conflicting with early news and China not agreeing on some of the larger details that favor the US. The weekly wrap up this weekend will try to sort the facts from the fiction, but with President Trump now back in the US after a successful trip to APEC, it would be nice for the markets to settle down for a few days.

Getting up in the middle of the night to check on the latest market movement and fallout from the trade talks has been this week’s pattern and I need a nap. The wildly volatile trade last night showed a greater level of uncertainty than certainty and when the trade decided on a strategy during the day session, they did not make new daily highs or lows after an unpredictable night with a 44-cent range in Jan beans but just 9 ½ cents in Dec ’25 corn. This highlights that the trade deal is all about upcoming bean sales with nothing to help either corn or wheat. Continue to make sales on rallies but today’s sharp reversals and losses in both corn and wheat are going to make me reconsider my Sales Targets for both, especially having come so close this week with no sales. The scars from near misses of pennies that cost dollars in 2023 and 2024 need to remind everyone that stubbornness and fear of missing a larger rally need to be controlled in volatile markets.