October 28 Comment

Prices rallied from the overnight opening through the early part of the day session before profit taking and aggressive farmer hedging pushed prices back to mid-range for the rest of the volatile, high-volume session. Optimism continues through the trade for Thursday’s APEC meeting between President Trump and Chairman Xi where more specific details of the new trade deal should be released. As of yet, there are no indications in the US cash or basis bean markets that China has been working behind the scenes or through their state buying agency COFCO. Markets and traders need to see more concrete proof that the US/China trade agreement extends past lowered fentanyl tariffs (20% back to10%) and lower port charges. Other markets remain extremely volatile with cattle falling sharply again today but a mid-session rally did allow live cattle to move into positive territory for part of the day while feeder cattle continued to plummet, now having lost over $60 in the last ten trading sessions. Other big moves continue in the equity markets with the Dow, S&P and NASDAQ making new-all-time highs for the third trading session in a row. It is difficult to predict if confirmation of the trade deal will keep the bullish momentum going in the grain, soy, and equity markets, or if it will turn into a whiplash buy the rumor and sell the fact trade on Thursday.

News and Notes:

• The forecast models for both South America and the US continue non-threatening patterns for both with both Argentina and Brazil seeing the best planting/early development weather in years. At some point, the potential of record crops in both countries will have to be factored into new crop 2026 prices.
• The Dec corn daily chart is on Page 2 and shows today’s continued strength and highest close since early July. With 6 1/4-cents between today’s high ($4.35 ¾) and the summer high ($4.42), it would make sense that the technical traders want to test the old high to run out some buy stops and see if they can force a breakout. Any rally to that point should be sold aggressively because this rally is the hope for bean sales, not a yield loss situation for domestic or world corn stocks.
• Crude oil has had an interesting trade lately with prices rebounding back over $62 a barrel before today’s announcement that OPEC+ is expected to raise production by 127,000 barrels a day at their meeting this weekend. OPEC+ normally prefers prices at $65 or higher so the rational behind increases to drive prices back into the mid-$50’s is hard to understand. Either way, expect fuel prices to stay reasonable into the end of the year.
• The Federal Reserve will finish their October meeting on Wednesday and is expected to lower rates by 1/4 point with discussions to have one more 1/4 point cut at their December meeting. The rate of the 1-year bond continues to hover on both sides of 4%, which is the lowest yield in a year. Lower interest rates, record highs in the equity markets and falling energy prices are great additions to the strong rallies the trade deal has produced in the grains and soy markets.
• The 2025 corn Sales Target was hit in late trade at $4.50 March for another 10% sale to push totals to 60%. The 2026 corn Sales target was missed by 3/4 of a cent which makes me nervous and brings back bad memories from missing sales in the 2022 and 2023 rallies by pennies. Please look at the updated Sales Targets for 2025 corn and yesterday’s updated bean targets after those sales. Wheat is also getting close and needs to be part of rewarding this welcome rally.

Even though it is only Tuesday, the action and stress of the week make it feel like we have been trading for weeks. The best way I have found to deal with excessive volatility and how it effects your better judgement is to have your sales orders in with your buyers and do not play the “cancel if close” game thinking your offer is too low. Sell rallies in stages because it is impossible to pick tops. My hope is always that these early sales for 2026 are the worst prices of the year, because $11 bean futures and $4.70 corn futures would help build a better base than we saw in 2024.