Nov 10 Comment - Gains in Grains and Soy on Possible Government Reopening

For the second time in the last two Monday openings, the markets saw dynamic and wildly volatile trade in every market as it appears the US government may be opening sometime this week. The world equity and metal markets rocketed to huge gains while January beans rallied after a slow start on rumors that China was asking for bean bids over the weekend. There are still multiple hurdles to jump for the government to re-open this week, but the USDA November report will be released on Friday to give some much-needed insight into how much yield loss was seen in the late summer drought and rust infestation in parts of the Midwest. Extreme volatility shows no signs of ending as every day and every week, the trade seems to be swinging at another curve ball factor that may have little or massive impact on price direction in 2026.

News and Notes:

• Extreme US cold has set in across the Midwest and Southeast which will thankfully move quickly away with more seasonal temperatures by this weekend. SA weather forecast changes are minimal and continue to be the best starting conditions in SA in years.
• The December daily corn chart is on Page 2 and shows that initial and important support at the 20-DMA (blue line) held and inspired prices to bounce sharply following the overall strength in beans and all other asset classes. The sizing of this chart is a little misleading as it makes the daily moves look larger than they are, but today’s measly 5-cent range and modest 2 +/- cent gains, shows that corn is just an innocent bystander in the big picture.
• River terminal basis levels, interior basis levels, ocean freight rates, and barge availability continue to dispel the rumor that China is actively involved in sourcing cash beans for January delivery from the US. While the futures markets remain strong, the Chinese have not made any officially known purchases of cash beans in the last 2-weeks.
• You can’t have a trading session without an enormous daily range and move in cattle and today set a new high bar for volatility. After trading nearly $3 lower in opening trade, December to August cattle contracts trade up the daily $7.25 limit for a massive 5% daily range with the feeder cattle market also riding the roller coaster with every contract through summer 2026 was limit up their contract limit of $9.25. With the government reopening and stock market surging, the bulls are playing the angles that the $30 (13%) correction in live cattle and $64 (17%) correction in feeders over the last 4-weeks is overdone and President Trump’s threats to lower beef prices will take longer than it takes to sent a few tweets. Retail demand continues to be strong with the cash markets not following the futures.
• Details of the government re-opening started to drift out Sunday night which started with the Senate passing the needed pre-cursor administrative measures. By the close of trade on Monday, nothing else had been accomplished toward an official Senate vote to pass the temporary government funding. There remain many questions about whether the Senate agreement will be passed in a far more contentious House of Representatives. Re-opening the government is much like negotiating with the Chinese, huge egos and trillions of dollars are always at the center of most stalemates.

It would have been impossible to feel comfortable in any market position since the tariff tantrum volatility started in early April. Today’s massive rallies in the equity markets, metal markets, livestock markets and to lesser extent the grain and soy markets following last week’s losses, can give you whiplash and heartburn unlike any amusement park ride. Friday’s USDA report continues to lurk on the horizon of the news of a potential re-opening of the US government and may unintentionally coincide with it on Friday. Most farmers I deal with look forward to finishing harvest to take a deep breath and some much-deserved down time, but this will not be that type of week. Continue to sell rallies.