Slow Day Waiting on Chinese Purchase Confirmations

Turnaround Tuesday did not feature much of a turnaround, but it was a much calmer trading session with all three markets little changed in a drifting two-sided trade. Confirmation from the USDA of a small Chinese bean purchase tempered an overnight rally with the demand bulls now counting on confirmation in the 3-day reporting window. Other news was limited but the US equity markets were sharply lower during the session before some value buyers took advantage of the recent sharp break. The flood of USDA report data will continue every morning with the trade closely watching the daily and weekly export news to put the missing pieces of the grain and soy puzzle together.

News and Notes:

• There is no domestic or world weather issue to take focus off the trade and export news. One surprise regarding weather was the initial US winter wheat crop rating at 45% was below estimates and below last year. Despite good rain and generally good planting conditions, the crop is not going into dormancy in great shape.
• The daily December 2025 chart is on Page 2 and shows the volatile two-sided pullback from last week’s highs at $4.73 ½ and the difficulty that prices are having accelerating the month-long rally above the harvest top and the summer breakdown at $4.71. The 20-DMA (blue line at $4.66) is the first level of support with last week’s high the upside resistance. Corn has been a stubborn follower to beans during the post-trade deal trade because China is not buying corn and the yields reported last Friday do not set up much upside unless the USDA cuts yield to 183 or below in their January yield update.
• Now that the USDA has opened the flood gates on the backlog of report releases, there is plenty to sort through every day. The USDA updated harvest progress this morning and showed corn harvest at 91% complete with beans 95% shelled. Both are slightly behind 2024, but the long warm dry fall allowed for better dry down and cost control and the larger yields take an extra minute to harvest. This last portion of harvest (1.5 BBU of corn and 210 MBU of beans) is always the hardest to get in a bin as space fills up quickly during a record crop.
• As the layers of the trade deal with China are pulled back, one important thing is the lower tariffs on crop inputs out of China (except potash) have led to lower input prices heading into the winter pre-pay season. Please check with your input salesperson and begin to put together a plan for 2026 as Dec '26 corn is at $4.70 and Nov '26 beans at $11.26 are 35-cents and $1 above where new crop 2025 prices were a year ago today. There may not be the profitablity you are looking for but these are both key factors to take a look at now that harvest is complete.

• Upcoming decisions from the EPA and the Supreme Court could loom large on prices once the decisions are made. The EPA still has to decide on small refinery exemptions (SRE’s) which is expected in the next week, while the Supreme Court is deciding on the legality of President Trump’s tariffs. The Supreme Court sets its own timeline, but the decision should be before year-end.

October and November have been an extremely volatile months in every market as the grain and soy markets continue to move higher on a trade deal with China and government data releases showing better exports than expected during the shutdown. Other asset classes like livestock, precious metals and equities have gone the other direction with livestock down nearly 15%, silver and gold down 10% with the major equity indexes fearing a valuation bubble down over 6% just in the last week. It is great to see the rallies in our markets, but late fall rallies always present their own problems as earlier sales at lower levels frustrate everyone and cut into the already thin margins. All of this volatility is now driven more by the massive amount of speculative fund computer trading that makes routine moves much larger than fundamentals would suggest. Continue to sell these rallies as another round of asset re-allocation is probably coming before the end of the year and the pendulum can swing against us just as quickly as it swung for us. One key thing to remember if you want to stay bullish beans is that our beans are prices nearly $2.50 a bushel over Brazil’s offers, which means China made a deal to spend almost $1 BILLION dollars on beans to end the tariff war. This will not last very long.