October 29 Comment

Nervousness and two-sided volatility were today’s hallmarks as everyone awaits details from tonight’s meeting between President Trump and Chairman Xi regarding the trade deal that was described as “substantial” earlier this week. The front month contracts in corn, beans and wheat were the strongest in the daily trade as farmer selling was noted to cap early gains with accelerated 2026 hedging noted as Nov ’26 beans topped $11 and Dec ’26 corn traded over $4.65. Cattle saw a welcome rebound after the beat down of the last five sessions while another round of all-time highs was another bullish feature today. Expect sharply lower of higher markets at some point overnight as specific trade details could easily spark a “buy the rumor and sell the fact” high volume volatile reaction.

News and Notes:

• Weather in SA continues to lean bearish as there are no concerns for Brazil or Arntine in the next 2-3 weeks. US weather is cold with harvest wrapping up in most of the Midwest.
• The January daily bean chart is on Page 2 and shows this week’s breakout and the gap ($10.63 - $10.70 ¼) left on Sunday night’s opening. The three daily closes and Tuesday’s high ($11.08) are the best weekly trade in 12 ½ months. The last time prices were this high, Brazil was in the middle of a very dry start to their planting and growing season and world supplies were nearly 300 MBU below current levels. Prices ultimately fell $1.38 when Brazil’s weather turned normal and crop improvement turned toward the record yield, they ended up harvesting with subsequent sharp breaks during the development of the potential record US bean BPA yield. The markets are waiting for details on the trade deal with China, but it will need to exceed the most bullish expectations to accelerate the rally.
• Cattle had a sharp reversal rally today after the 5-day slide of $23 in live cattle and the $50 rout in feeder cattle. While futures were falling sharply on news of negotiations for additional beef imports from SA and the seasonal re-opening of the Mexican border for feeder imports, cash trade only fell about $10 while boxed beef prices were flat to higher. The cattle market will remain very volatile and sensitive to potential herd expansion even after this dramatic correction.

• The Federal Reserve cut interest rates by 1/4 point today but indicated that a rate cut in December was not as certain as many bond and equity traders had assumed. After morning rallies to new all-time highs in the Dow, S&P, and the NASDAQ for the 4^th day in a row, the markets sold off sharply after the announcement.

• The 2025 bean Sales Target was hit in the overnight and day trade to wrap up 2025 bean sales for the season. The trade relief rally could not have come at a better time and with plenty of 2026 crop still to sell, any additional China buying related rally will keep those sales over the 2025 sales average.

After another day of exhausting but rewarding trade in all markets, the wildly volatile week may pale in comparison to what we hear tonight about specific details from the US/China trade deal after President Trump and Chairman Xi meet face to face in South Korea. The start of the meeting is 9 pm central, but the overnight trade will be volatile with much higher volume than normal. Please have your orders in with your buyers as any disappointment in total bean purchases will send prices sharply lower while uncertainty and optimism into the meeting could produce the rally to hit your targets. Trade direction into the end of the week, which happens to also be the end of the month, will be almost entirely determined by tonight’s trade pact details.