Volatility Takes a Breather, but the Headlines Aren’t Done Yet

The markets traded lower into the weekend but finished with gains for the week after a wild week of unexpected trade announcements. February is usually one of the calmer months if there is no SA weather problem, but this administration remains hard at work for the US farmer and to build trust with the rural voters heading into a critical mid-term election cycle later this year. With Washington realizing that more foreign and domestic demand is the easiest way to reduce stocks and increase prices, the trade and bio-fuel teams remain hard at work. Friday’s late announcement on increased beef imports from Argentina will get additional attention next week as the markets react to that news and another strong weekend of Brazilian harvest and non-threatening weather into mid-February.

News and Notes:

- The rain for the driest areas of Argentina and S Brazil continues this weekend with increased coverage and totals forecast for next week. Brazil’s major bean producing province Mato Gosso is harvesting at t record pace with their safrinha corn planting also record fast. Just like the US, the faster and earlier the corn crop goes in, the better yield potential it holds. Mother Nature has been very kind to Brazilian production for the last 3-years, and this year is continuing the trend.

- The daily old and new crop corn and bean charts are on Page 2, and I wanted to highlight March corn’s ability to claw back half of the January USDA report losses and climb back into the lower portion of the post-harvest to January range. December is showing a little more life because the bean deal announcement with China would create an unexpected battle for US acres. The bean charts are very similar to each other with a bullish breakout from the head and shoulders pattern. $11 is a big psychological price hurdle, and notable farmer selling has been noted in the last 3-days where prices ticked over $11 where beans are profitable enough with normal yields. The funds were caught flatfooted when Trump announced the Chinese bean purchase agreement which caused significant short covering. All four charts are turning more bullish for the first time in months.

- After Friday’s market closes President Trump signed an executive order for US beef imports from Argentina with reduced tariffs. The order is $800 million for 200 million pounds to be split in the next 4-quarters. The cattle industry is understandably upset as prices for both live and feeder cattle futures are expected to open lower on Monday. In between a potential JBS processing plant strike in Colorado and ongoing screwworm uncertainty, the cattle markets are showing resiliency in the face of all this news, but the volatility is hard to stomach.

- February begins the revenue-based insurance price discovery and after one week, the average price for December corn is $4.5750 with November beans at $10.8690.

- Weekly Changes: Corn +2 (March ‘26), +1 3/4 (Dec ‘26), Beans +51 3/4 (May ‘26), +14 1/4 (Nov ‘26), Wheat -6 1/2 (July ’26), Crude -131, Diesel -768, Dow +1197, US Dollar +647, Cattle +190, Feeder Cattle +715, Hogs +13, Cotton -211, Milk -7 (15.38).

This administrations flair for the dramatic is unlike any other our markets have ever seen and this week’s surprise trade announcements with China for more bean sales and Argentina for more beef purchases are keeping the markets volatile and the traders on our toes. In between this week’s Chinese and Indian trade announcements, 45Z optimism and subsequent bean rally, the cattle market will take center stage on Monday. The trade deal with China (if fully realized and confirmed by China) would dramatically shift potential US planted acres this spring to add to the ongoing uncertainty and volatility. The one certain next week is that Brazil’s bean harvest will continue rolling along with their cash offers $1-$1.50 below ours while this week’s corn rally took US corn from the cheapest price in the market. For anyone interested in taking an affordable path to re-ownership going into this uncertain spring, please call me for a few ideas. Have a great weekend.