System-Wide Selling Hits Grains as Markets Reprice Risk

Almost every market took on a very defensive posture heading into the weekend as President Trump’s announcement of Kevin Warsh as the new Federal Reserve Chairman sparked a massive selloff in the precious metals which bled over into the equity markets and as losses and margin calls mounted, the grain and soy markets were also a victim of the system wide selling. While this administration’s support for voluntary year-round E-15 sales sparked a continuation of the recent rally, farmer selling accelerated late week as roads cleared after last weekend’s record winter storm. With the books closed on January, February will feature the normal acceleration of preparation for spring planting along with the expected receipt of the USDA’s Farmer Assistance Payments to help (hopefully) close the books on 2025 obligations and set up another crop year.

News and Notes:

• Late week rain in Argentina and consistent forecasts that have early February returning to normal precipitation and temperatures, the key month ahead for SA crop development will get off to a better start. Despite the sharp drop in Argentina’s corn crop ratings from the recent stress, a good end to the growing season in Argentina and Brazil will assure more record crops with Argentina’s corn crop significantly higher than last year’s drought-stricken crop. The US will again see Arctic temperatures through early next week, but a return to more seasonal weather is forecast late next week.
• The daily new crop charts are on Page 2 and they all three share the bearish pattern of lower highs and lower lows while corn and beans cannot breakthrough significant overhead resistance. Funds are short in all three markets with their smallest position in beans. February is historically bearish without a SA weather problem, so the continued bearish trends are expected to continue through the month.
• An important part of the recent strong export demand has been a steadily falling US Dollar which allows foreign buyers currencies to but more US bushels for less. With President Trump’s announcement of Kevin Warsh as the new Fed Chairman, the US Dollar rallied sharply on Friday as Warsh is not seen as a “Yes Man” for President Trump’s wish for lower interest rates and is an inflation fighter which could mean less rate cuts in 2026. Regardless of what Chair Warsh does, the US debt will eclipse $40 TRILLION this year which remains the problem neither party wants to solve.
• The most bullish story last week was President Trump’s vocal support of year-round E-15, which is great, but falls far short of mandating it. Following Trump’s speech in Iowa, it was announced the Rural Domestic Energy Council was formed in the House of Representatives to craft a bill making year-round E-15 mandatory, which could increase corn used for ethanol over 1.5 BBU. The committee has a February 15^thdeadline to craft a bill, which President Trump said he would sign if passed and gets to his desk. In between year-round E-15 and the potential for more support for the Sustainable Aviation Fuel industry, increasing domestic demand would be a major solution for growing world competition.
• Weekly Changes: Corn -2 (March ‘26), +3/4 (Dec ‘26), Beans – 2 1/2 (May ‘26), - 2 1/4 (Nov ‘26), Wheat + 4 3/4 (July ’26), Crude +395, Diesel +1454, Dow -255, US Dollar -545, Cattle +95, Feeder Cattle +10, Hogs -110, Cotton -64, Milk +17 (15.45).

While there is no historic relationship between the precious metal markets and corn and beans, when major world markets get rocked like the metals, equities, and currencies did on Friday, there is a strong ripple effect that infects other non-correlated markets. The recent rallies were appreciated, but overhead technical resistance and farmers still holding significant bushel totals on farm, the rallies were rewarded which helped stop the rally. Things I am looking for in February are yield totals from expanding SA harvest, and toward the end of the month the March corn and bean futures first notice date that should force even more farmer selling on rolled or hedged bushels, regardless of price level. To cap the month the USDA Ag Outlook Forum will release their early US planted acreage and yield estimates for the 2026 crops, which usually causes traders some heartburn. After Friday’s system wide meltdown, early calls are mixed to lower with the hope our markets can separate themselves from other more effected markets. Have a great weekend.