CHINA & SOYBEAN WHIPSAW
MARKET UPDATE
You can scroll to read the usual update as well. As the written version is the exact same as the video.
Timestamps for video:
Overview: 0:00min
Corn: 2:20min
Beans: 5:35min
Wheat: 12:20min
Cattle: 14:00min
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Overview
Grains higher across the board following Friday's post-USDA blood bath.
We had some rollercoaster action in soybeans the last few days.
Friday we closed down -22 cents.
Overnight today, we gapped open lower.
Trading as much as -10 cents lower.
We then went on to rally a massive +45 cents off the lows today.
Closing the day up +33 cents. Which is the largest daily gain of the entire year.
Soybean 15 Minute Chart
So what happened?
Like we talked about Friday, the USDA itself wasn’t bearish. If anything it was neutral to perhaps even a tad friendly.
Production came in lower than expected. US and world carryout both came in lower than expected as well. Yet.. we sold off.
The reason we sold off on Friday was because we received export sales data.
That data disappointed.
As it showed that China had not been buying.
China agreed to buy 12 million metric tons.
The export sales showed that China had only bought a confirmed 332k metric tons.
Which is less than 3% of what they agreed to buy this year with time running out.
There was 616k metric tons to unknown, which "could" be China but isn’t a confirmed number. Which means the maximum number of soybeans China could’ve possibly bought was right arounf 1 million metric tons.
Which is only 8.3% of the 12 million they agreed to buy.
Why did we rally today?
We had a few pieces of news come out.
Last night, Bessent said that we would hopefully have a US and China agreement by Thanksgiving.
This morning, US Ag Secretary Rollins said she was:
"Confident China will buy US soybeans."
She also said:
"We've already just got about 330k tons out, but we'll get there.. we're going to get that deal signed.. and then we're off to the races."
So Friday we sold off because it looked like China hadn’t been buying and traders were worried they wouldn’t be able to meet that 12 million metric tons.
Today we are rallying because optimism of China buying soybeans has returned.
Today we also saw a -100k metric ton sale of soybeans to China cancelled.
The market seems to not care because 100k isn’t really that much when they are suppose to buy 12 million.
Today's Main Takeaways
Corn
Fundamentals:
Today we saw some monster corn export inspections.
This is the 6th best week on record, and the best since 2021.
With zero business to China.
Cleary, corn demand isn’t slowing down.
Here is a seasonal chart from Karen Braun.
We are well above previous years.
Here is another great graphic from the Brock Report.
Corn export inspections are up +72% vs last year.
They are up a massive +116% vs the 5-year average.
Demand is the number one reason you can’t get bearish on the corn market.
We are going to have record production no matter where yield comes in at.
However, export projections are up over +30% compared to the last time we saw record production back in 2023.
I don’t think there is any chance we don’t see yield fall further in January.
Outside of 2019, every time we've seen a yield cut in November it was followed by an even bigger yield cut in January.
The average cut in January the past decade is -3.12 bpa.
The largest we've seen this decade was 2020 and last year. Both saw -3.80 bpa cuts.
The issue is that for us to get a 180 yield, we'd have to see a -6 bpa cut. Which doesn’t usually happen.
As the average cut puts us at 183.
I've shown this chart countless times but I'm still watching this pattern of March-25 vs March-26 corn.
The two years are still tracking pretty closely.
Last year, the real run started in December.
Here is the 5-year seasonal for March corn.
This suggests higher into next year as well.
This seasonal has the top at around $4.80 in February.
We topped at $5.04 in February last year.
For those that think we will continue to track last year's price action, give Jeremey a call as he some options strategies that will perform very well if we do.
Jeremey: (605)250-3863
Technicals:
Dec Corn
The USDA spoiled the breakout we had.
Ultimately, bulls want to hold the red box to keep the short term bias remaining higher. As that would be a standard correction from the recent rally (50-61.8%).
The September correction bottomed at that same 50-61.8% level (orange box).
If we get consective closes above the 200-day, it could spark further upside.
Since we alerted a sell signal and hedge alert at that $4.35 resistance a few weeks ago, our next target to take risk off the table is $4.55
That is 161.8% of the contract low to September rally. Known as the golden fib and a common spot for a 2nd rally to stall.
March Corn
Same story in March corn.
Need to hold the red box ideally.
Break above the 200-day MA and I'd like to think we see further upside.
The next target is $4.73, which is 161.8% of the original rally off contract lows.
Soybeans
Today's Sell Signal & Hedge Alert:
Today we did offically alert our first sell signal since we tapped those yearly highs +80 cents or so ago.
We have been very very patient on selling soybeans this year. This was only our 3rd sell signal since January.
The last two were at the August highs and then a few weeks ago when we hit yearly resistance.
Here is the link in case you missed it: CLICK HERE
Below is a visual of our signals:
Do I think soybeans have more upside? Yes I do.
It simply makes sense to take a little risk off the table following the size of rally we've seen.
Especially if you have DP, basis contracts, or know you are going to have to move soybeans by the end of the year.
If you have more time on your hands, you have more flexibility and do not have to be as proactive as someone who is in one of those scenarios.
Our advice was to do one of the following:
Buy a put. This protects you and gives you a floor while keeping your upside open. If prices go lower, your put makes money. If prices go higher, you only lose out on the cost of your put.
Sell some grain and buy a call. This gives you a worst case scenario while also keeping your upside open. If we go lower, you only lose the cost of your call. If we go higher, your call makes money.
If you do not have a hedge account, you could simply make an incremental sale.
We prefer to use options. Because both of these strategies keep our upside open in the event that prices continue to go higher. My personal bias leans higher so I want to keep my upside open.
I don’t think the top is in. It simply makes sense for most to have some downside protection following a $1.50 rally.
I am not getting carried away here at all. I do not want to be oversold if soybeans go to $12 or higher like I've been stating on each of these signals.
Fundamentals:
Some people are bearish because China hasn’t bought many beans. They think that they won’t.
Some people are bullish because China hasn’t bought many beans. What happens if they do?
If they really are going to buy the amount they agreed to, that means they have a lot of catching up to.
Soybeans have rallied this much on the "rumor" and perception of China buying beans. You can only imagine what happens if they do.
Bears argue, "Why would China buy US soybeans if Brazil's beans are cheaper?"
Which is a valid question. But in the grand scheme of things, soybeans are a small fraction of the deals they are going for. Essentially a drop in the bucket compared to the other deals. Soybeans are a bargaining chip for them to reach other deals.
Then we also have the US supply situation.
If demand is fine, we aren’t swimming in soybeans.
Even with a 53 bpa yield, our carryout is the tightest it's been in 3 years.
Here is a chart that shows you how yield effects carryout.
This uses the current demand projections and does not take into account changes to demand. If supply drops, the USDA will offset some of that loss by cutting demand. It won’t actually be linear.
But this gives you a clear picture at just how tight the room for error really is like we've been talking about all year long.
The other big factor is Brazil.
What happens if they run into a weather issue?
An issue with their crop would have a much larger impact on the world soybean situation than if we had an issue in the US.
If Brazil runs into an issue, that could also force China to have to buy even more soybeans from the US.
A problem in Brazil is one of the ways you could run into an extremely bullish market. Such as $13 to $14 beans. I am not saying that will happen. I am saying that is the possibility IF Brazil has an issue.
We already have the 2nd lowest acres of the last decade here in the US. Things would get very interesting if Brazil ran into a production hiccup.
Here is their outlook for November and December. It does appear to be slightly on the dry and warm side, but too early to call for any sort of scare.
Domestic crush demand is also one of the friendliest factors that seems to be flying under the radar.
Crush demand is +200-300 million bushels more than the last time China bought as many soybeans as they've agreed to buy.
Meaning we have an extra +200-300 million bushels of demand compared to the last time China bought as many soybeans as they've agreed to buy over the next few years.
NOPA crush was phenomenal today.
The October number shattered the record for any month by +10 million bushels.
It was the best October by +28 million bushels. Which is a +12% record for the month.
Technicals:
Jan Beans
The chart looks good.
The reason for the sell signal & hedge alert today was that we hit our first target.
That target was $11.55 as it reclaimed 61.8% of the contract highs.
Our next target is right around $12.00
As the next fib level is the 78.6% level at $12.05
Friday we posted an outside down day. Today we posted an outside up day. Trading below Friday's lows but closing above the highs.
That signal and hedge alert is not us saying to go and try to speculatively short soybeans. I would not speculatively short this market as I see the potential for further upside.
I personally think we have a very solid chance at seeing $12.00.. perhaps even higher.
Here are a few other charts as to why I think $12.00 is very possible.
If you take the entire $1.14 range we were trapped in this year.
Then you add that on top of the point of breakout at $10.87 and our resistance this year.
You get $12.01
($1.14 + $10.87 = $12.01)
We were trapped under that $10.80 to $11.00 resistance for over a year.
When it broke, we had some clear air to the upside.
In the past decade, we've only broken that resistance twice until now.
2016: we ran right to $12.00
2020: we went much higher
If you look at the monthly chart, soybeans really just hardly trade in the $11.00's
We've created virtually zero support or resistance in this range because we never trade in it.
Every time we either run to $12.00 or fall below $11.00
As a matter of fact, every single time soybeans have been below $11.00 and then broke above.. we have never stopped in the $11.00's
We have always went to $12.00 or higher. Every time.
Does it have to happen this time? No of course not, but it is a very compelling argument and I personally think it happens again.
Wheat
Fundamentals:
Wheat caught a nice bid higher today. Erasing the losses from the USDA report.
Fundamentally, there still isn’t much to update here.
We lack a catalyst to go dramatically higher. As ample global production is keeping a lid on us.
But I can’t get bearish at 5-year lows either.
Simply waiting to seize an opportunity.
In the wheat market, that opportunity usually only comes a handful of times a year and doesn’t last long.
India announced they would start exporting wheat again. Which is bearish. As they’ve had restrictions for the last 3 years. They are considering exporting due to ample supplies.
We need a catalyst for some short covering.
Maybe that comes from a technical breakout. Maybe it comes from a fundamental factor.
Some speculate that a brutally cold December forecast could be the spark we need. As it could offer potential winter kill damage with a lack of snow cover. I guess we will have to wait and see.
Regardless, I am not in a hurry to sell a bunch of wheat down here.
Technicals:
Dec Wheat
I still like taking a little risk off the table in the green box.
As that claws back 50-61.8% of the June highs.
The 200-day MA also sits in that box.
The wheat market has really struggled to stay above the 200-day MA for very long.
It's been above it just 3 times since Sep 2024. Each time did not last very long at all.
To the downside, bulls want to hold the orange box.
Dec KC Wheat
For KC our upside target is still that green box to look at taking some risk off the table.
As it gives back 50-61.8% of the June highs.
Cattle
The headlines in cattle are bearish.
We just had Rollins say that beef prices will come down by spring.
As cattle continues to make the headlines and grab attention.
Despite the cleary bearish headlines, the market has held up the last few days and seemed to shrug off the news.
We gapped open lower then got bought strongly today.
So perhaps we could find some support down here and be due for a corrective bounce.
We have a cattle on feed report on Friday.
The estimates have placements down -7.5% vs last year, and the smallest in 3 years.
With marketing also down -7.5% vs last year.
Then they have on feed down -1.8% from last year. At the smallest level in 3 years.
Dec Live Cattle
So far we are finding life at this 200-day MA.
This is a very crucial spot to hold if we want to prevent further downside. As a break below probably sparks more algo selling.
If we do get a corrective bounce, we want to be rewarding the bounce.
If we can reclaim 50-61.8% of the green box that would be a very good place to reward the rally if it comes.
The 50-day MA currently sits in that box as well.
Jan Feeders
We are also hovering and finding support right above the 200-day MA.
I apologize that it's hard to see the 200-day MA. As it just received enough data to become available a few days ago on Jan feeders.
But essentially that is the big spot to hold like in live cattle.
To the upside, if we somehow get a bounce up towards the green box we want to be rewarding the rally if it comes.
As the government is telling you they are actively trying to lower prices.
Past Sell or Protection Signals
Nov 13th: 🌽 🌱
Managing risk in corn & beans ahead of USDA report.
Oct 28th: 🌽
Corn sell signal & hedge alert.
Oct 27th: 🌱
Soybean sell signal & hedge alert.
Oct 13th: 🐮
Cattle sell signal & hedge alert.
Aug 22nd: 🌱
Soybean sell signal & hedge alert.
July 31st: 🐮
Cattle sell signal & hedge alert.
July 10th: 🐮
Cattle sell signal & hedge alert.
CLICK HERE TO VIEW
June 5th: 🐮
Cattle sell signal & hedge alert.
June 2nd: 🌾
MPLS wheat sell signal.
April 10th: 🌽
Old crop corn sell signal.
March 19th: 🐮
Cattle hedge & sell signal.
Feb 18th: 🌽 🌾
Old crop KC wheat & old crop corn signal.
Jan 23rd: 🌽 🌱
Corn & beans old crop sell signal.
CLICK HERE TO VIEW
Jan 15th: 🌽 🌱
Corn & beans hedge alert/sell signal.
Jan 2nd: 🐮
Cattle hedge alert at new all-time highs & target.
Dec 11th: 🌽
Corn sell signal at $4.51 200-day MA
CLICK HERE TO VIEW
Oct 2nd: 🌾
Wheat sell signal at $6.12 target
Sep 30th: 🌽
Corn protection signal at $4.23-26
Sep 27th: 🌱
Soybean sell & protection signal at $10.65
Sep 13th: 🌾
Wheat sell signal at $5.98
May 22nd: 🌾
Wheat sell signal when wheat traded +$7.00
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USDA TOMORROW
AUDIO COMMENTARY
Corn breaking out (chart below)*
Very solid price action in corn & beans
Corn highest since July 4th
Beans post 16-month highs
Risk for USDA bull trap
A lot riding on tomorrows report
Will take until Jan until export sales up to date
Not sure if report will be done properly
Massive trade ranges for this report
All announcements coming at same time as USDA
Bears argue beans fundamentally overvalued
Details on our pre-USDA alert
How to manage your risk here
Using calls to establish minimum prices
When to use a call vs a put?
Soybean nearing next target (chart below)*
USDA estimates below audio*
Listen to today’s audio below
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CHARTS & USDA ESTIMATES
Dec Corn 🌽
We have offically broken above this key resistance we’ve been talking about for months.
As long as the USDA doesn’t spoil the party.. the chart looks poised for more upside.
The level we just broke above was key support from spring. Which was now viewed as resistance. As we rejected there for 2 weeks in a row.
This was also 50% of the Feb highs.
Not only that.. but we closed above the 200-day MA for the first time since June (really for the first time since May).
I will share my next target tomorrow if the USDA doesn’t ruin the break out.
We also have that inverse head and shoulders I’ve been showing since September.
The implied move for this does bring you to $4.70
Jan Beans 🌱
We are approaching our next target of $11.55
That gives back 61.8% of the contract highs
There is also a gap at $11.55 on the active daily continuation chart (scroll for this chart).
Our 2nd target is going to be right about at $12.00
That is the 78.6% level to contract highs and a big psychological level.
I personally think there is a solid chance we will see $12.00 (scroll for my reasoning as to why).
Here is the active daily continuation chart.
When we rolled off the July contract, we left a gap at $11.55
That level perfectly lines up with 61.8% of the contract highs.
So it is our next target which we are quickly approaching.
Here is the weekly chart.
This is why I think soybeans have a great shot at $12.00
When we broke out of that yearly range.. it opened the door to an incredible amount of upside.
Where we rejected all year long was the same spot we rejected in 2015, 2017, and 2018.
The two times we broke above that resistance.. we ran a lot higher.
2016 we ran right to $12.00 before failing there.
2020 we went much higher.
There just simply isn’t any real resistance between $10.80 and $12.00 like we’ve been talking about all year long.
USDA ESTIMATES
We have a massive trade range.
Over 4 bpa in corn yield.
A 500 million range in corn carryout.
A 300 million range in soybean carryout.
A 187 bean carryout would be the tightest in a decade. A 494 bean carryout would be one of the largest of all-time only behind the trade war.
Past Sell or Protection Signals
Nov 13th: 🌽 🌱
Managing risk in corn & beans ahead of USDA report.
Oct 28th: 🌽
Corn sell signal & hedge alert.
Oct 27th: 🌱
Soybean sell signal & hedge alert.
Oct 13th: 🐮
Cattle sell signal & hedge alert.
Aug 22nd: 🌱
Soybean sell signal & hedge alert.
July 31st: 🐮
Cattle sell signal & hedge alert.
July 10th: 🐮
Cattle sell signal & hedge alert.
CLICK HERE TO VIEW
June 5th: 🐮
Cattle sell signal & hedge alert.
June 2nd: 🌾
MPLS wheat sell signal.
April 10th: 🌽
Old crop corn sell signal.
March 19th: 🐮
Cattle hedge & sell signal.
Feb 18th: 🌽 🌾
Old crop KC wheat & old crop corn signal.
Jan 23rd: 🌽 🌱
Corn & beans old crop sell signal.
CLICK HERE TO VIEW
Jan 15th: 🌽 🌱
Corn & beans hedge alert/sell signal.
Jan 2nd: 🐮
Cattle hedge alert at new all-time highs & target.
Dec 11th: 🌽
Corn sell signal at $4.51 200-day MA
CLICK HERE TO VIEW
Oct 2nd: 🌾
Wheat sell signal at $6.12 target
Sep 30th: 🌽
Corn protection signal at $4.23-26
Sep 27th: 🌱
Soybean sell & protection signal at $10.65
Sep 13th: 🌾
Wheat sell signal at $5.98
May 22nd: 🌾
Wheat sell signal when wheat traded +$7.00
Want to Talk?
Our phones are open 24/7 for you guys if you ever need anything or want to discuss your operation.
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CHINA BUYING WHEAT? GRAIN RALLY CONTINUES
AUDIO COMMENTARY
Very volatile day in grains
New highs in beans & wheat
Rumors China buying wheat
China hasn’t bought wheat in over a year
What if China buys corn & wheat?
USDA scheduled for 14th if gov open
Price action looks like China buying beans
Balance sheets change drastically if yield slips like some suggest it could
Sue Martin says much higher beans
How to use stops & puts in beans
Letting soybeans ride higher with a hedge account
Soybeans rarely stop at $11.00’s
There is still black swan risks
Some argue this bean demand just shifted more demand back to Brazil
Who should reward the wheat rally soon?
Corn re-ownership strategy
What to do if you’re forced to sell corn
Still see downside risk in cattle
Wheat breaking out (chart below)*
Soybean targets (chart below)*
Listen to today’s audio below
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CHARTS
Dec Corn 🌽
Still battling this resistance box and our first target of $4.35-40.
Until we break above, it is viewed as resistance.
On the other hand, if we break above, it does open the door higher.
As we have a pretty clear text book inverse head & shoulders pattern as well.
Jan Beans 🌱
Our first target is $11.55
That is the 61.8% retracement to the contract highs from the contract lows. We are above the 50% level, so the next level is the 61.8%.
Our summer highs topped out at the 38.2%.
Our second target is going to be right about at $12.00
That is the 78.6% retracement to the contract highs.
Not only that, but if you were to take the entire range we were trapped in all year, and then added that range to the point of breakout. It spits out $12.00 as well.
The monthly chart also suggests $12.00 as a possible target which we will talk about sometime this week in my video update.
Here is a more simple visual of that range.
We were trapped in a $1.14 range for a year.
We broke out.
If you add $1.14 to the point of breakout, you get $12.00
Dec Wheat 🌾
We got a clear breakout.
As we broke above those Sep highs.
Which should offer more potential upside towards that green box.
That green box is the golden zone. It claws back 50-61.8% of the June highs. The most common spot for prices to revert back to.
Past Sell or Protection Signals
Oct 28th: 🌽
Corn sell signal & hedge alert.
Oct 27th: 🌱
Soybean sell signal & hedge alert.
Oct 13th: 🐮
Cattle sell signal & hedge alert.
Aug 22nd: 🌱
Soybean sell signal & hedge alert.
July 31st: 🐮
Cattle sell signal & hedge alert.
July 10th: 🐮
Cattle sell signal & hedge alert.
CLICK HERE TO VIEW
June 5th: 🐮
Cattle sell signal & hedge alert.
June 2nd: 🌾
MPLS wheat sell signal.
April 10th: 🌽
Old crop corn sell signal.
March 19th: 🐮
Cattle hedge & sell signal.
Feb 18th: 🌽 🌾
Old crop KC wheat & old crop corn signal.
Jan 23rd: 🌽 🌱
Corn & beans old crop sell signal.
CLICK HERE TO VIEW
Jan 15th: 🌽 🌱
Corn & beans hedge alert/sell signal.
Jan 2nd: 🐮
Cattle hedge alert at new all-time highs & target.
Dec 11th: 🌽
Corn sell signal at $4.51 200-day MA
CLICK HERE TO VIEW
Oct 2nd: 🌾
Wheat sell signal at $6.12 target
Sep 30th: 🌽
Corn protection signal at $4.23-26
Sep 27th: 🌱
Soybean sell & protection signal at $10.65
Sep 13th: 🌾
Wheat sell signal at $5.98
May 22nd: 🌾
Wheat sell signal when wheat traded +$7.00
Want to Talk?
Our phones are open 24/7 for you guys if you ever need anything or want to discuss your operation.
Hedge Account
Interested in a hedge account? Use the link below to set up an account or shoot Jeremey a call at (605)295-3100.
WILD DAY. CHINA AGREES TO BUY SOYBEANS
MARKET UPDATE
You can scroll to read the usual update as well. As the written version is the exact same as the video.
Timestamps for video:
Overview: 0:00min
Corn: 2:25min
Beans: 5:25min
Wheat: 10:55min
Cattle: 12:30min
Want to talk about your situation?
(605)295-3100
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Futures Prices Close
Overview
Soybeans higher with corn & wheat trade lower, meanwhile cattle was about unchanged.
Originally, grains were down drastically lower this morning.
Soybeans were down -23 cents at one point.
Corn was down -6 cents at one point.
Last night and into this morning it appeared that the Trump and China meeting was simply a "buy the rumor, sell the fact" event.
As after the meeting we did not get any specific commit numbers out of China.
All Trump said was:
"Purchases of soybeans will start immediately"
"On a scale of 1-10 the meeting with Xi was a 12"
It was also announced that they came to a one-year agreement and that Trump would be dropping tariffs from 57% down to 47%.
He also said he would be visiting China in April.
Now since there wasn’t any specifics announced, soybeans tanked hard last night.
However.. this morning things got pretty interesting.
As we got volume specific news.
Bessent and Rollins announced that China agreed to buy 12 MMT (440 milllion bu) of soybeans this year.
While also buying 25 MMT (920 million bu) of soybeans for the next 3 years.
They also stated we had had come to an agreement with 6 other countries to increase soybean demand by 19 MMT (700 million bu). However, we did not get on details on this. So we have no clue what time period this is over or how it's different from what they already buy.
They also said they would buy US sorghum but no specific details were announced.
While removing tariffs on grains and ag products.
This news resulted in soybeans rallying a massive +40 cents off their lows in just 2 hours.
Here is a 15 minute chart to give you a good visual.
We started off the night slightly higher going into the meeting.
Right after the meeting ended, we dropped -35 cents because details weren’t announced.
Then when this announcement came out that we had specific purchase numbers from China, we ran +40 cents.
So it was a sell fact.. until it wasn’t.
Absolutely wild price action today. Soybeans traded in a +/-44 cent range. The largest trading range in the life of the Jan contract.
We will dive into these China numbers more in the soybean section.
Today's Main Takeaways
Corn
Fundamentals:
Not much to update on corn today.
We are fighting that $4.35 resistance we've been talking about following our sell signal on Tuesday. Which was the first one we've issued since the April rally.
I am going to keep today's corn section on the light side as there isn’t much new.
Here is why you can’t get "super" bullish on corn (not yet anyways).
We do have a massive crop regardless of where yield comes in at.
Even if it drops to 175 bpa, we are still looking at a record.
This is almost entirely due to the utterly massive acres.
As acres this year were record high.
On the flip side, demand is the greatest it has ever been.
Export inspections up to this point in the marketing year are double what they normally are.
The best on record.
We haven’t had actual export data in a while, but based on the last USDA report they are expecting export demand to be the best it's ever been.
So that is why you can’t get too bearish on corn here either.
As I'd like to think record demand should help keep a floor under this market.
At the same time, yield is coming down.
That is a given.
By how much is the bigger question.
And will it take until January for it to be realized due to the government shutdown?
I've shown this chart a lot recently.
This is March-25 vs March-26 corn if you align the harvest lows.
It is still tracking pretty closely.
I can easily see a scenario where corn goes sideways before getting a greater opportunity towards the end of the year or into next.
If we look at a quick seasonal.
Corn has traded lower from Nov 1st to Nov 19th the last 13 of 15 years.
The only years we traded higher was 2024 and 2020.
So seasonally, we are entering a weak time period, but doesn’t have to happen.
Technicals:
Dec Corn
Tuesday we hit that $4.35 target in Dec corn and alerted a sell signal & hedge alert.
Currently we are struggling here. As we've rejected there twice.
This reclaimed 50% of the Feb highs. It was also key support from spring. It is now viewed as resistance until proven otherwise.
If we can bust above this green box, then it could certainly open the door higher. But for now, it is resistance.
Maybe soybeans continue to drag corn higher. If that is the case, I will have my next target out if we break above this green box.
To the downside, if this truly was our local top, we want to hold $4.20. That would be a standard sized correction.
As it gives back 61.8% of the recent rally.
March Corn
If you have JFM delivery, we also hit our target March corn.
$4.50 clawed back exactly 50% of the February highs.
It was also old suppport from spring.
Soybeans
Fundamentals:
Let's dive right into the China news.
They said that China has agreed to buy 12 MMT (440 million bu) of soybeans this year.
Not only that, but they agreed to buy 25 MMT (920 million bu) of soybeans each year for the next 3 years.
Now are these massive numbers? No.
China essentially agreed to buy the same amount of soybeans they had previously been buying the last few years.
Here is a visual of that.
This is assuming they are talking about marketing years, not calendar years. That was not specified.
However, here is the difference.
Crush.
We are crushing more than ever. Our domestic demand is as strong as it's ever been.
So China is going to be roughly the same amount of soybeans they've been buying the last few years.
If you compare the years that resemble the same amount of soybeans China has agreed to buy, crush demand is +200-300 million bushels higher than those years.
So even though this commitment from China isn’t out of this world large, it is still friendly.
We also have far less acres than those years.
China does have a pretty shaky track record or living up to their promises. As they only fulfilled 58% of what they agreed to buy during the phase one trade deal.
However, that might be largely due to how the deal was structured back then.
In the phase one deal China agreed to buy a set dollar amount rather than pure volume. Soybeans were at low prices at the time, but ramped up. So it was harder for them to meet their requirement.
This agreement is far more reasonable and attainable because they are basically just buying what they normally do.
With the domestic demand we have, if Brazil has any weather issues at all, things could get pretty interesting.
Not to mention, we do have the 2nd lowest acres of the last decade.
Which makes the room for error on the balance sheet all that more smaller.
Here is a 2024 vs 2025 yield comparison.
Last year, Oct yield was the same as where the analysts pegged it at earlier this month.
Oct 2024: 53.10
Oct 2025: 53.20 (analyst est)
Last yield, yield fell substantially in Nov and Jan.
Nov 2024: 51.70
Jan 2025: 50.70
We had a similarly dry finish this year.
Odds favor us not getting a yield update until January with the government shutdown.
But what happens if we see a similar drop in yield like last year?
China has agreed to buy their usual amount of soybeans. We have small acres. Crush is at a record. There just isn’t a ton of room for error on the supply side.
I have been preaching this argument for months, but that is why this market has "potential".
Bottom line, this is great news that China is going to buy soybeans.
I mean Chinese demand was by far the biggest concern in this market.
China is only buying about half of what they did last year, but the concern was China wouldn’t be buying at all.
They aren’t buying a crazy amount of soybeans this year, but it should be enough to prevent the balance sheet from getting heavy. While at the same time locking in future sales for the next 3 years.
The next big factors are going to be Brazil's crop. Do they have any production issues? We are soon entering their weather season.
Then where does US yield ultimately come in at?
This market certainly has upside potential.
However, we do still like managing some risk up here if you have not done so yet on our sell signal & hedge alert on Monday.
We have been extremely patient on our soybean sell signals this year. So rewarding a $1.00 rally in some sort of manner makes sense.
Preferably something that keeps your upside open such as puts, or selling your grain then re-owning with a call.
If you don’t have a hedge account, like we said on Monday, we simply like making a few sales up here.
It depends on your situation, so give us a call or text if you want to talk specifics.
(605)295-3100
Regardless, I am definitely still keeping ammo in case this market continues higher. But don’t do nothing on a $1.00 rally and the highest prices we've seen in over a year.
Technicals:
Jan Beans
For starters, we did break out of a year range we'd been trapped in for over a year. Which is a pretty big deal.
My targets are subject to change as this is such a headline driven market right now.
For now, I am eyeing $11.20 then $11.55 if we hit them.
$11.20 gives back 50% of the contract highs from the contract lows.
$11.55 gives back 61.8% of the contract highs from the contract lows.
I think both of those are good spots to further de-risk.
Will we fill that gap we left Sunday?
Hard to say. Rule of thumb is typically that if the gap isn’t filled in 3-4 days then it doesn’t have to be filled.
Continuous Beans
I've been showing this chart for months and talking about how significant a break out of this range could be.
We've been trapped in a small range for nearly 500 days.
We've now broken out of that range.
There is a pretty clear gap of air higher. As on that 2024 sell off, it was hard and fast. Meaning we created zero support between here.
I showed this recently, as well as on social media.
Soybeans absolutely hate trading between $11.00 and $12.00
Does that mean soybeans "have" to go to $12.00? No of course not.
But historically, we very rarely ever trade between these two levels.
Most of the time we run up to $12 or higher, or crash below $11.00.
There have only been a handful of months ever where we've simply traded in the $11.00's.
I think $12.00+ soybeans is a possibility. But I will be managing my risk on the way up as nothing is ever a guarantee.
Wheat
Fundamentals:
Nothing new to update in wheat as has been the case recently.
We still don’t have a true catalyst in this market. But relatively speaking I still view the wheat market as being undervalued here long term.
We are entering a seasonally weak time frame similar to corn.
Wheat has traded lower from Nov 1st to Nov 19th the last 13 of 15 years.
We've only traded higher 4 times since 2004.
However, seasonally wheat was suppose to trade higher in September and cleary that didn’t happen either.
Just something to be aware of here.
Technicals:
Dec Wheat
Outside down today. As we took out yesterday’s highs then closed below yesterday’s lows.
We rejected right at those Sep highs.
That is going to be a big level to break above.
If we can break above, I think we could have room to run towards $5.55-70. Which is where I want to de-risk if we get there.
To the downside, a standard correction would take us as low as $5.09. That is the level we want to hold or it could create more downside.
Dec KC Wheat
Very similar chart to Chicago.
Outside down day today, which is bearish short term.
We rejected right at the Sep highs.
We did just break out of a multi-month downtrend, so that’s nothing to scoff at.
If we can take out the Sep highs, I think we have room to go to $5.45-60
Which gives back 50-61.8% of the June highs.
To the downside, we need to hold $4.95 to keep bias remaining higher.
Cattle
Dec Live Cattle
Inside day for both live and feeders, as the market is pausing searching for a direction.
Remember how massive of support the 50-day had been all year long?
That is now going to be our upside point of interest if we get a bounce.
Since it was incredible support, it could offer pretty stiff resistance.
So that is where we are going to wanting to be looking to reward if we get a rally.
To the downside, I added some retracement levels.
All these are is I measured the top down to where we previously bounced off the 50-day MA at before that big rally.
Earlier this week we touched the 161.8% level before bouncing. If that level fails the next levels of support are on the chart.
For reference, here is a zoomed out look of the 50-day.
Was a floor all year long.
Jan Feeder
We left a massive gap on Monday.
If we are able to crawl up and fill that gap, we should be rewarding the bounce. That is going to be out point of interest if it fills. Gaps do not have to fill, but that is an area to reward if we do.
It is possible that that gap does not get filled, as open interest yesterday indicates that yesterday’s rally was not met with fresh buying.
Similar to live cattle, we bounced at the 161.8% retracement. Failure to hold could drop us to the next levels.
Continuous Feeder
Fundamentally, nothing has actually changed in this market.
We did get reassurance that the border would remain closed for the time being.
But with the government clearly trying to get prices lower, there is still risk in this market.
If the top is truly in, where could we expect to find a bottom?
This is my big picture thinking; it could be months or even years. It won’t happen right away, and doesn’t have to happen at all.
But historically, cattle has found a bottom where it previously found resistance.
The highs from the 90's turned into the floor during the 2000's.
The highs from the 2000's turned into the floor during the 2010's.
So perhaps we find a floor at those highs from last year. Or maybe those highs from 2014.
Testing that level would make sense.
Past Sell or Protection Signals
Oct 28th: 🌽
Corn sell signal & hedge alert.
Oct 27th: 🌱
Soybean sell signal & hedge alert.
Oct 13th: 🐮
Cattle sell signal & hedge alert.
Aug 22nd: 🌱
Soybean sell signal & hedge alert.
July 31st: 🐮
Cattle sell signal & hedge alert.
July 10th: 🐮
Cattle sell signal & hedge alert.
CLICK HERE TO VIEW
June 5th: 🐮
Cattle sell signal & hedge alert.
June 2nd: 🌾
MPLS wheat sell signal.
April 10th: 🌽
Old crop corn sell signal.
March 19th: 🐮
Cattle hedge & sell signal.
Feb 18th: 🌽 🌾
Old crop KC wheat & old crop corn signal.
Jan 23rd: 🌽 🌱
Corn & beans old crop sell signal.
CLICK HERE TO VIEW
Jan 15th: 🌽 🌱
Corn & beans hedge alert/sell signal.
Jan 2nd: 🐮
Cattle hedge alert at new all-time highs & target.
Dec 11th: 🌽
Corn sell signal at $4.51 200-day MA
CLICK HERE TO VIEW
Oct 2nd: 🌾
Wheat sell signal at $6.12 target
Sep 30th: 🌽
Corn protection signal at $4.23-26
Sep 27th: 🌱
Soybean sell & protection signal at $10.65
Sep 13th: 🌾
Wheat sell signal at $5.98
May 22nd: 🌾
Wheat sell signal when wheat traded +$7.00
Want to Talk?
Our phones are open 24/7 for you guys if you ever need anything or want to discuss your operation.
Hedge Account
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GRAINS CONTINUE RUN. TIME TO DE-RISK?
MARKET UPDATE
You can scroll to read the usual update as well. As the written version is the exact same as the video.
Timestamps for video:
Overview: 0:00min
Corn: 1:55min
Beans: 5:15min
Wheat: 11:55min
Cattle: 12:45min
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Futures Prices Close
Overview
Grains higher across the board once again, although we did fade off the early highs. With soybeans closing over -12 cents off their highs.
However, front month soybeans traded to their highest levels in 477 days. While corn traded at it's highest levels since the 4th of July weekend.
The cattle market continues to fall as managed money hits the exit door.
Jan feeders are now down over -55 bucks (-14.5%) in 8 days with Dec live cattle down nearly -22 (-9%). The largest correction we've seen since last year's sell off going into September.
Soybeans continue to catch a bid behind trade deal optimism.
As Trump continues to say we are going to strike a deal with China.
As you probably know, over the weekend Bessent claimed China will buy a "substantial" amount of soybeans.
Over the weekend it was also announced that the US and China had come to an early agreement.
We do not know the details of the agreement.
Trump and China are scheduled to meet in 2 days.
There is so much uncertainty in this market.
But right now the market seems to think we are going to get a deal and that China is going to be buying soybeans.
What is the risk?
The clear risk has to be that this is a buy the rumor, sell the fact the type of event.
We rally going into the meeting then sell off once it happens.
Or even worse, if the meeting actually disappoints.
If we do not strike a deal and soybeans are not mentioned at all. That would be worst case scenario for this event.
The odds currently suggest the Government shut down will last 45 days.
It is becoming more and more unlikely that we will not be getting a November USDA report which was originally scheduled for the 10th.
Which means we might have to wait until January to get confirmation that yields are lower.
Today's Main Takeaways
Corn
Todays Sell Signal:
Today we did issue a sell signal and hedge alert.
This was our first one since that April rally.
Here is the link to the signal:
Click Here for Signal
Our generic advise is to simply secure some short term puts to establish a floor in this market if it falls. While keeping your upside open if the market decides it wants to keep running.
If you don’t have a hedge account, then we like simply making a sale between $4.35 and $4.40.
Call us if you have questions or want to talk specifics.
Jeremey: (605)295-3100
I don’t want to get carried away here, but simply a start following a near +50 cent rally.
Fundamentals:
Export demand continues to impress.
We don’t have actual export data due to the shutdown (amount of corn sold).
But we do have export inspections data (the amount of grain that is actually being shipped).
Export inspections are up nearly +60% vs last year.
Up +100% vs the 5-year average.
The best ever up to this point.
Chart from StoneX
Since we don’t have export sales data.
Here is a chart from Karen Braun from a few weeks ago.
At that point, export sales were record high.
The only years that even comes close were back during the last bull run after the phase 1 trade deal with China.
That bull run and record high exports were almost entirely led by China.
We haven’t sold anything to China this year. Yet export demand is that great.
Now I am not holding my breath on China buying US corn.
However.. you have to imagine what would happen to this market if China did buy US corn with our export program already sitting at a record.
So we have record demand.
Not only that.. but yield coming down.
Most are suggesting 180 or lower.
So I mean there are some friendly things going for the corn market.
This market already priced in a 2.3 billion bu carryout and 189 yield.
We probably won’t get confirmation of lower yields until January.
So perhaps we don’t get that serious opportunity until the end of the year and going into next.
Which is exactly what we saw happen last year when the USDA ultimately lowered yield from 183.8 in October to 179.3 come January and we created demand.
Here is a March-25 vs March-26 comparison if you line up the harvest lows.
We've seen some very similar price action.
Technicals:
Today we hit my first target in Dec corn that I've had for the last few months.
Which was $4.35 as it gave back 50% of the February highs.
Not only that, but it was old key support from spring.
It was where this market found a floor before falling off in June.
Often times, old support is going to turn into new resistance.
Hence why we issued a sell signal & hedge alert.
The 200-day MA also sits right here. Which we haven’t closed above since May.
If we break above this level, then it could cause more short covering and further upside.
But for now, it is going to be viewed as resistance and our first point of interest.
If you have JFM delivery, we also hit our target March corn.
$4.50 clawed back exactly 50% of the February highs.
It was also old suppport from spring.
Soybeans
Yesterdays Sell Signal:
Soybeans are at their highest levels in over a year.
This entire rally has been purely based on optimism that we are going to land a deal and China is going to buy soybeans.
So there is definitely risk that the market gets disappointed if the talk between China and Trump disappoints.
Which is why we alerted a sell signal & hedge alert yesterday.
It simply makes sense to at least partially manage your risk at the highest prices you've seen in nearly 500 days. It is hard to just shrug off a move like this and not do anything at all.
Our advice was, and still is, to keep a stop order under this market or grab some short term puts if you have a hedge account.
The purpose of this strategy is to establish a floor if we fall, but to keep your upside open.
For those of you who were forced to sell soybeans, you could look at re-owning with a cheap call option. This locks in your price while maintaining upside potential.
For those who have stuff on DP or basis contracts, you could consider selling your beans and re-owning with a call instead. Again, locking in your price while keeping upside exposure.
If you do not have a hedge account, our advice yesterday was to simply spread out a few sales over the next few days.
I am not getting oversold at these levels or getting carried away.
It just makes sense to manage your risk after this size of rally in just 3 weeks, but what happens if yield is 51.5 and China buys soybeans? The upside potential is there.
Call or text us if you have questions:
Jeremey: (605)295-3100
Nobody has any idea how the meeting with Trump and China will turn out.
Maybe they don’t come to an agreement and soybeans tank.
Maybe China agrees to buy a bunch of soybeans are we run to $12.00 from here.
You have to be in a position where you are comfortable with both scenarios.
Fundamentals:
Here are some balance sheet scenarios.
The first one is our most recent USDA report numbers. That features a 53.5 yield, 1,685 for exports, and a 300 million carryout.
Personally, I don’t think yield is 53.5. So in the 2nd and 3rd example I lowered yield to 52.5
What if China doesn’t buy any soybeans?
In the 2nd example, we cut our exports from 1,685 to 1,400. This brings your carryout to 500 million. Which is a bearish number.
What if China agrees to buy soybeans and our exports are actually currently understated?
In the 3rd example we raised exports from 1,685 to 1,745. That would drop your carryout to 160 million, which is amongst some of the tightest levels ever.
So you can see the possibilities for this market.
If China decides to buy soybeans, there is simply very little room for error on the balance sheet.
That is how you create a bullish scenario in the soybean market.
On the other hand, until we have clear cut proof that China is going to buy a reasonable amount of beans, it makes sense to protect this rally in some manner.
While at the same time keeping some ammo for later in case we run into one of those extremely bullish scenarios off the back of Chinese demand.
Because if yield isn’t quite there, and China buys soybeans, the sky is really the limit for this market.
I've shown this chart countless times. But look at what happens to carryout when you start lowering yield.
This doesn’t account for demand changes, but you can see just how tight the room for error is.
If yield drops, the USDA will automatically cut export demand to offset the losses.
However, if you throw some extra Chinese demand on top of this thing, it could get really interesting.
We had an incredibly dry finish.
Here the is August 1st through September 15th precip ranking.
We have drastically lower acres.
Chinese demand might be all you need to create a recipe for higher prices.
Everyone has been told that China is short around 365 million bushels (10 MMT) of soybeans that they need until Brazil's crop becomes available next year.
Last year, China bought around 800 million bushels.
So even if we are able to secure those needed bushels, it would still be less than last year. But that amount might be enough to prevent the US balance sheet from growing due to other countries stepping up.
If we do get a trade deal done. Does China buy soybeans now? If so, how much? Or do they wait until year?
Maybe this doesn’t turn into a major game changing factor until next year. It is impossible to know today.
We should know this week whether this is the real deal or not.
Technicals:
Jan Beans
We are at our highest levels in over a year.
We did leave a disappointing candle today closing well off the highs.
So we will have to see how we follow it up tomorrow.
If the rally continues, our next target is $11.20 to de-risk a little more.
$11.20 gives back 50% of the contract highs.
The June rally rejected off the 38.2% level at $10.85. The next fib is the 50%.
If we look at the RSI, it is the most overbought it has ever been for this contract.
So that is a reason to be cautious up here.
Continuous Beans
The continuous chart is the most interesting.
This chart shows the contract that has the most volume. So it currently uses Jan beans.
We cleary broke out of the range we've been trapped in all year long.
There is a possible gap of air towards $11.44
Here is a zoomed out look.
$11.44 is the first retracement level up to those 2022 highs.
It is also where the market previously found support.
When the market fell apart last summer, it was fast and hard. Which left no support between here and $11.44. The market simply hasn’t traded between these levels leaving a gap or air.
So the upside potential is certainly there. But we need some cards to fall right between Trump and China.
Here is another look at continuous beans.
This is the monthly chart.
The blue box highlights $11.00 to $12.00
Soybeans very rarely trade in the $11.00's.
Most of the time, we either rally right to $12.00 or come falling down below $11.00. Rarely is the market ever sitting in the $11.00's.
So IF the cards fall right. I don’t see why soybeans couldn’t go to $12.00.
Today we failed to close above $11.00
Wheat
Fundamentals:
The recent wheat rally appears to be mostly short covering and technical buying, following the rest of the grains higher.
There really isn’t any major news.
The market still lacks a true catalyst outside of technical buying and being cheap.
Demand however, does remain very solid.
As export inspections are up +20% vs last year.
The best in at least a decade.
Chart from StoneX
Dec Wheat Technicals:
We finally got that breakout.
If we take out today's highs I think we could have more room to run.
Dec KC Wheat Technicals:
KC also got the break out.
If we take out today's highs we could see more upside.
Cattle
Trump continues to pressure this market.
He once again posted a statement about cattle today.
This price action is purely based on headlines and what Trump has said.
Fundamentally, nothing has changed.
However, when the President says he is actively trying to lower beef prices, it scares the market. Even if it is going to take more than a tweet to fundamentally change the market.
Not too long ago the funds were holding a record large position.
If I were the funds, I would be nervous holding a record-long position with the government saying they will be getting prices lower.
We have been very vocal about keeping protection in this market.
There was news that people from Mexico are visiting DC this week to discuss the potential to open up the border.
I don’t know how far this market will fall. But there are certain things the government can do to continue to add pressure to this market.
Such as re-opening the border or starting to import from Brazil.
Dec Live Cattle:
Not a good look here.
We are now below the 50-day and 100-day MA's.
That 50-day was the must hold level. Failing to hold it sparked even more downside.
If we get a relief bounce, it should be viewed as a hedging opportunity.
Jan Feeder:
Feeders are also below the 100-day and 50-day MA for the very first time in the life of this contract.
I am not going to try and catch a falling knife trying to time a bottom.
Continuous Feeder:
Could the bull run be over?
It's possible, but impossible to know. We probably won’t know until well after the fact.
This has been a large correction. But if you zoom out, we saw about the same size of corrections the last two years.
So still a little early to say the run is 100% over.
The government is trying to lower beef prices, but it won’t happen overnight.
Past Sell or Protection Signals
Oct 28th: 🌽
Corn sell signal & hedge alert.
Oct 27th: 🌱
Soybean sell signal & hedge alert.
Oct 13th: 🐮
Cattle sell signal & hedge alert.
Aug 22nd: 🌱
Soybean sell signal & hedge alert.
July 31st: 🐮
Cattle sell signal & hedge alert.
July 10th: 🐮
Cattle sell signal & hedge alert.
CLICK HERE TO VIEW
June 5th: 🐮
Cattle sell signal & hedge alert.
June 2nd: 🌾
MPLS wheat sell signal.
April 10th: 🌽
Old crop corn sell signal.
March 19th: 🐮
Cattle hedge & sell signal.
Feb 18th: 🌽 🌾
Old crop KC wheat & old crop corn signal.
Jan 23rd: 🌽 🌱
Corn & beans old crop sell signal.
CLICK HERE TO VIEW
Jan 15th: 🌽 🌱
Corn & beans hedge alert/sell signal.
Jan 2nd: 🐮
Cattle hedge alert at new all-time highs & target.
Dec 11th: 🌽
Corn sell signal at $4.51 200-day MA
CLICK HERE TO VIEW
Oct 2nd: 🌾
Wheat sell signal at $6.12 target
Sep 30th: 🌽
Corn protection signal at $4.23-26
Sep 27th: 🌱
Soybean sell & protection signal at $10.65
Sep 13th: 🌾
Wheat sell signal at $5.98
May 22nd: 🌾
Wheat sell signal when wheat traded +$7.00
Want to Talk?
Our phones are open 24/7 for you guys if you ever need anything or want to discuss your operation.
Hedge Account
Interested in a hedge account? Use the link below to set up an account or shoot Jeremey a call at (605)295-3100.
CORN SELL SIGNAL & HEDGE ALERT
This is our first corn sell signal since those April highs.
Who is this sell signal for?
If you have hedge account, our preference is to use a short-term put to see if we can keep going higher while keeping your upside open.
We don’t know if we will get a trade deal and what it will include. You can imagine the upside possibilities if soybeans or even corn is included.
So the proper tool for this sell signal would be to buy a put option. This locks you in a floor if we fall, we keeping your upside open if we rally.
If you do not have a hedge account, we like making some sales here as a start between $4.35 to $4.40 to spread your risk out. Nothing too crazy, but a start.
If you want to talk specifics or have any questions at all give us a call or a text.
Jeremey: (605)295-3100
If you do not have a hedge account and would like one with us click the link below or give Jeremey a call.
Click for Link to Hedge Account
Why are we alerting this?
Dec corn hit our first target of $4.35
$4.35 claws back 50% of those highs from February.
It was also some key support from spring. Old support often becomes new resistance.
We also have the 200-day MA sitting there. Which we haven’t closed above since May.
Above there and we could see some short covering and further upside. But I think $4.35 to $4.40 is a great spot to start to de-risk following a near +50 cent rally as I’ve had this target for months now.
If you have JFM delivery, March-26 corn also tapped our target.
As $4.50 reclaimed 50% of the February highs.
It was also our old support from spring which can often become new resistance.
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Past Sell or Protection Signals
Oct 27th: 🌱
Soybean sell signal & hedge alert.
Oct 13th: 🐮
Cattle sell signal & hedge alert.
Aug 22nd: 🌱
Soybean sell signal & hedge alert.
July 31st: 🐮
Cattle sell signal & hedge alert.
July 10th: 🐮
Cattle sell signal & hedge alert.
CLICK HERE TO VIEW
June 5th: 🐮
Cattle sell signal & hedge alert.
June 2nd: 🌾
MPLS wheat sell signal.
April 10th: 🌽
Old crop corn sell signal.
March 19th: 🐮
Cattle hedge & sell signal.
Feb 18th: 🌽 🌾
Old crop KC wheat & old crop corn signal.
Jan 23rd: 🌽 🌱
Corn & beans old crop sell signal.
CLICK HERE TO VIEW
Jan 15th: 🌽 🌱
Corn & beans hedge alert/sell signal.
Jan 2nd: 🐮
Cattle hedge alert at new all-time highs & target.
Dec 11th: 🌽
Corn sell signal at $4.51 200-day MA
CLICK HERE TO VIEW
Oct 2nd: 🌾
Wheat sell signal at $6.12 target
Sep 30th: 🌽
Corn protection signal at $4.23-26
Sep 27th: 🌱
Soybean sell & protection signal at $10.65
Sep 13th: 🌾
Wheat sell signal at $5.98
May 22nd: 🌾
Wheat sell signal when wheat traded +$7.00
Want to Talk?
Our phones are open 24/7 for you guys if you ever need anything or want to discuss your operation.
Hedge Account
Interested in a hedge account? Use the link below to set up an account or shoot Jeremey a call at (605)295-3100.
GRAINS SOAR WHILE CATTLE BLEEDS
AUDIO COMMENTARY
Feeder limit down again
Trump gets what Trump wants
How to protect profit on cattle puts
Don’t be complacent in marketing
Trump says US and China will make deal
Bessent says China will be “substantial” amount of soybeans
If we get a deal is it built into the market?
There is definitely upside potential in grains
Could the trade deal be a buy the rumor sell the fact event?
More details on our soybean sell signal
Most of you are suppose to reward this rally in some sort of matter
Who should try to hit home runs vs singles
We do not want to chase if we were forced to puke sell
What to do if you do not have a hedge account
Looking for $4.35-40 in corn (chart below)*
What if China buys & yield isn’t there?
No taking risk off the table in wheat
We are still harvesting a huge corn crop
No crop insurance floor is a risk
Beans break out of year range? (chart below)*
Listen to today’s audio below
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CHARTS
Dec Corn 🌽
Still eyeing $4.35 to $4.40 to start to de-risk.
That gives back 50% of the Feb highs.
It is also old key support from spring.
Still have the potential inverse head & shoulders pattern in place.
We tagged the neckline today.
Usually, a break above the neckline indicates more upside.
Jan Beans 🌱
Today we traded at our highest levels we’ve seen all year long.
We like de-risking here as this is where soybeans have failed all year long.
Very very close to breaking out this brutal range we’ve been trapped in for over a year.
If you break out of a range of that magnitude, more often than not it leads to more upside.
I will have my next upside target out once I’m confident this is truly a breakout of the range.
Continuous Soybeans 🌱
Now this chart is more interesting.
We might have just broken out of the range we’ve been trapped in for the last 475 days.
If this is the breakout, we have a clear gap of air towards $11.40
$11.44 gives back 23.6% of the 2022 highs. 23.6% is the first fib level.
The market has also simply just not traded between here and $11.40. As when we sold off, it was hard and fast. So it left a gap of air and not much resistance above these levels.
Here is a weekly continuous chart to give you an even bigger picture view.
This level we are was also resistance from 2016-2018.
If we break above (which we are on the verge of possibly doing) we have the gap of air towards $11.40
Dec Wheat 🌾
Finally got the break out we’ve been waiting for.
Still think we have room to run.
Dec Live Cattle 🐮
Not a good look here.
We talked about for weeks that if we broke below the 50-day MA it could very easily spark more downside. That was the must hold level and we failed to hold it.
We are now right below the 100-day MA. We need back above fast or the algos could sell this thing further.
Past Sell or Protection Signals
Oct 27th: 🌱
Soybean sell signal & hedge alert.
Oct 13th: 🐮
Cattle sell signal & hedge alert.
Aug 22nd: 🌱
Soybean sell signal & hedge alert.
July 31st: 🐮
Cattle sell signal & hedge alert.
July 10th: 🐮
Cattle sell signal & hedge alert.
CLICK HERE TO VIEW
June 5th: 🐮
Cattle sell signal & hedge alert.
June 2nd: 🌾
MPLS wheat sell signal.
April 10th: 🌽
Old crop corn sell signal.
March 19th: 🐮
Cattle hedge & sell signal.
Feb 18th: 🌽 🌾
Old crop KC wheat & old crop corn signal.
Jan 23rd: 🌽 🌱
Corn & beans old crop sell signal.
CLICK HERE TO VIEW
Jan 15th: 🌽 🌱
Corn & beans hedge alert/sell signal.
Jan 2nd: 🐮
Cattle hedge alert at new all-time highs & target.
Dec 11th: 🌽
Corn sell signal at $4.51 200-day MA
CLICK HERE TO VIEW
Oct 2nd: 🌾
Wheat sell signal at $6.12 target
Sep 30th: 🌽
Corn protection signal at $4.23-26
Sep 27th: 🌱
Soybean sell & protection signal at $10.65
Sep 13th: 🌾
Wheat sell signal at $5.98
May 22nd: 🌾
Wheat sell signal when wheat traded +$7.00
Want to Talk?
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CATTLE HAMMERED, CALLS VS DP & 2026 SALES?
AUDIO COMMENTARY
Cattle hammered again
Cattle broke major support (chart below)*
Strategies we are using in cattle
Perhaps a little hedge pressure in corn
Simple re-test in corn? (chart below)*
Crop insurance pricing period is going to be over so you will not have a floor anymore. There is a risk in that
Why is basis firming at harvest?
Canada & US trade war escalation
Questions many of you have had
Should you be making any 2026 sales?
Delayed price vs call options
Why options might make more sense than DP
Options are abnormally cheap
Even if prices go lower options could be the better decision than DP because it locks in a floor
How can you capture the carry without locking in the price?
Listen to today’s audio below
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CORN & CATTLE CHART
Dec Live Cattle 🐮
We rejected off that golden fib.
We are now breaking below some pretty critical support.
We broke below the 50-day MA for the first time since April.
This has acted as a complete floor the entire year. The entire run.
It has marked several bottoms.
The only time we broke below was April. We then ultimately came down and tested the 100-day.
This market is still clearly in an uptrend and only at prices seen two weeks ago.
However, breaking below this support is not a good sign as could very well spark additional downside.
I have been talking about the 50-day being our warning sign for months.
Nov Feeder 🐮
We also broke below that critical 50-day MA.
This is pretty much the very first time we’ve broken below in the entire life of this contract.
It could very well spark some more downside.
Dec Corn 🌽
I’m not concerned with the price action in corn today.
It was an inside day meaning we did not trade above yesterday’s highs or below yesterday’s lows.
Yesterday we had a clear breakout above the 61.8% retracement up to the Sep highs as well as a break from the downtrend resistance.
Most of the time (not every time) break above the 61.8% and it tells us we are going to see more upside.
I think today’s pressure could simply be a back test of our previous resistance. As old resistance is now viewed as support.
Past Sell or Protection Signals
Oct 13th: 🐮
Cattle sell signal & hedge alert.
Aug 22nd: 🌱
Soybean sell signal & hedge alert.
July 31st: 🐮
Cattle sell signal & hedge alert.
July 10th: 🐮
Cattle sell signal & hedge alert.
CLICK HERE TO VIEW
June 5th: 🐮
Cattle sell signal & hedge alert.
June 2nd: 🌾
MPLS wheat sell signal.
April 10th: 🌽
Old crop corn sell signal.
March 19th: 🐮
Cattle hedge & sell signal.
Feb 18th: 🌽 🌾
Old crop KC wheat & old crop corn signal.
Jan 23rd: 🌽 🌱
Corn & beans old crop sell signal.
CLICK HERE TO VIEW
Jan 15th: 🌽 🌱
Corn & beans hedge alert/sell signal.
Jan 2nd: 🐮
Cattle hedge alert at new all-time highs & target.
Dec 11th: 🌽
Corn sell signal at $4.51 200-day MA
CLICK HERE TO VIEW
Oct 2nd: 🌾
Wheat sell signal at $6.12 target
Sep 30th: 🌽
Corn protection signal at $4.23-26
Sep 27th: 🌱
Soybean sell & protection signal at $10.65
Sep 13th: 🌾
Wheat sell signal at $5.98
May 22nd: 🌾
Wheat sell signal when wheat traded +$7.00
Want to Talk?
Our phones are open 24/7 for you guys if you ever need anything or want to discuss your operation.
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GRAINS BREAK OUT
MARKET UPDATE
You can scroll to read the usual update as well. As the written version is the exact same as the video.
Timestamps for video:
Overview: 0:00min
Corn: 3:00min
Options vs DP: 5:00min
Beans: 9:10min
Wheat: 14:10min
Cattle: 15:00min
Want to talk about your situation?
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Futures Prices Close
Overview
Great day across the grain markets with the wheat market leading the way higher as soybeans continue to catch a bid from trade deal optimism.
The cattle market was mixed. Feeder cattle led this move higher while live cattle lagged behind. We are now seeing that feeder to fat spread get back in line as live cattle has held up better on this sell off.
Today is a longer update. We go over a ton of charts, targets, the math behind delayed price vs options and what the right move might be in the corn market.
Let's dive right into the news before we jump into the good stuff.
Trump Cattle News
Trump made quiet a few comments yesterday.
The one that stirred the most controversy and upset many was these tweets about the cattle market.
He claimed that he is "the only reason cattle ranchers are doing so well" and that they "have to get their prices down" as the consumer is a big factor.
A few days ago, he said they are going to start importing Argentine beef, but that really doesn’t change anything.
Brazil is the one you have to be worried about. If he removes that tariff on Brazil beef that could add some pressure to this market and be a bearish factor. I believe he is scheduled to meet with Brazil next week, so that is going to be something to watch closely.
Regardless of the tariffs, cattle herds are at their lowest levels of all-time. That is the biggest reason why this market is higher. Supply is the tightest it has ever been.
Yes, the government shut down the Mexican border, amongst other things that helped fuel this rally. But tariffs alone aren’t the reason for the high prices.
There are certainly risks in this market which we'll touch on later.
Trump Soybean News
On a more positive note, yesterday Trump said the following:
"We will make a deal on everything."
"I think we are going to make a deal in soybeans."
Optimism of a deal has been the biggest reason for the recent rally in soybeans.
Gov Shut Down Odds
I've been including this in most of my recent updates, but the betting markets date for the government shut down continues to grow longer.
It is now estimated to last 44 days.
Which puts us well into the middle of November (Nov 14th).
As a reminder, the Nov USDA is suppose to be Nov 10th.
Rate Cuts
I've been talking about this for months and how this could be a potentially friendly factor for the grains.
There is currently an 80% chance we see 3 rate cuts this year.
Rate cuts lead to higher inflation and often higher-priced commodities.
Rate hikes lead to lower inflation and often cheaper commodities.
I've shown this before, but here is a chart that shows corn and soybean prices along with the feds rate cuts & hikes as well as inflation.
Interestingly enough, corn & soybean prices tend to follow inflation higher or lower.
Our last rate hikes marked the top of the bull market in 2022.
Last fall, our first rate cuts since 2020 coincidentally happened right before corn's most sustained rally of the entire bear market.
It does not mean grains "have" to go higher. Maybe it’s simply a coincidence. But you can’t deny the resemblance.
Today's Main Takeaways
Corn
Fundamentals:
I showed this chart on Tuesday but wanted to include it again.
This is March-25 vs March-26 corn if you align our harvest lows.
So far, the two years have seen very similar price action.
Summer sell off.
August harvest low.
Rally off the harvest lows going into September.
Even the size of the rally off the harvest low was almost the exact same size.
Now seeing a correction and stabilization.
The years are not going to follow each other exactly.
But I could see us following a similar path.
Where we don’t get that real opportunity until late 2025 or early 2026.
China News:
There was a headline that said China is receiving too much moisture and that they may be facing a corn shortage due to this.
China is the world's 2nd largest corn producer.
China has not bought any US corn in a very long time.
Their US corn imports have continued to shrink since the phase 1 trade agreement.
The last bull run in corn was largely due to the demand we saw from China buying US corn.
Even with zero business to China, corn demand is at a record.
Surpassing the demand we saw during the last bull run.
Who knows if China will actually buy US corn. They do have large corn stocks they can tap into, but nobody knows how accurate the data actually is.
However, you can only imagine how friendly it would be for this market if China did come in and buy US corn.
I'm obviously not getting my hopes up and betting the house on this happening.
But what if China has to buy US corn? Or what if we sign a trade deal where they agree to buy some corn? We already have record demand without them.
Chart from Karen Braun
Options vs DP
Many of you have asked about DP charges and what you should do.
Here is a good article that Jeremey and Lauren at Texas Hedge Risk put together:
Many farmers face a critical decision. Should they pay DP charges for stored corn, or explore a different strategy?
The answer is clear for most.
You're likely better off with selling corn and re-owning it will call options.
This approach can save you significant money while keeping your upisde potential.
Here is the math behind it:
Assume you are paying 5 cents per month in DP charges. Plus 8% interest on a line of credit.
At $4.50 corn, interest costs run you 3 cents a month.
For a total of 8 cents every month when you combine the DP and interest.
By February 20th, holding corn on DP would cost you 32 cents in total.
Here is an alternative:
March futures are trading at $4.37
The March $4.35 call options cost only 15 cents.
This presents a compelling opportunity.
You could sell your physical corn, buy one call option to protect your upside, and still come out ahead.
Even better.. you could buy two call options for 30 cents.
This 30 cents for the options would still be less than your total carrying costs.
While leaving you with exposure to the upside if we were to rally.
Here is a visual of the strategies and their minimum prices etc.
Now let's compare the outcomes based on various price scenarios.
In this scenario we used $4.00 to $5.65 corn, assuming you must sell by February 20th when the options expire.
This visual comparion reveals a striking difference in outcomes depending on where the market goes.
Here is a table of the outcomes.
The DP strategy simply delivers the futures price minus 32 cents in total carrying costs.
The one call option strategy provides a floor of $4.22 by ($4.37 futures price minus 15 cents for call option). While keeping your upside open.
The double call strategy provides a floor of $4.07 ($4.37 futures price minus 30 cents for both call options). While keeping your upside open by twice as much.
For example, if corn were to rally to $5.05 like we did last year. You would receive $5.47. Which is a full 74 cents above the DP outcome.
So should you pay DP charges?
Probably not in this current environment.
However, this analysis does NOT account for basis appreciation or extreme market moves in either direction.
Remember, you can always make marketing decisions and defer payment until January 1st. The right pricing decision and the right cash flow decision don’t have to align.
The bottom line: If your elevator will improve basis even on DP corn, you might justify paying DP. But right now, options are simply too cheap and DP charges are too expensive to ignore this strategy.
Give us a call or a text if you want to talk through this or have any questions at all.
(605) 295-3100
Technicals:
I really like what I am seeing out of corn.
We finally broke that $4.23 level we had been talking about.
$4.23 clawed back 61.8% of the Sep highs.
That is where most relief bounces fail.
Since we are above that level, it tells us this is no longer seen as just a small bounce. It could very well be the start of something bigger.
More often than not.. it is a sign we are in for some more upside.
Our first target is still $4.35.
That gives back 50% of the Feb highs. It is also old key support from spring, now viewed as resistance.
That is a good spot to start to de-risk.
Soybeans
Fundamentals:
Today it was confirmed that Trump and China are scheduled to meet in exactly a week.
48 hours before those 100% tariffs on China are set to go into effect.
Where this market decides to go will likely stem from what happens between them.
This market continues to trade headlines.
If we strike a deal, there is incredible upside.
If the meeting is a flop, we probably sell off.
One negative headline could very easily kill this rally.
On the other hand, if we do end up making a deal with China and they come in and buy our soybeans.. this market has some insane upside potential.
I have no idea where soybean exports will end at. Rumors are that China is still going to need around 300 million bu of soybeans to meet their needs until Brazil's crop comes online.
Last year China bought 800 million bu from us. So if we secured that 300 million bu worth of demand, we would still be -500 million bu short of last year. But other countries have been stepping up to offset those losses.
If demand is fine, or if China actually buys soybeans. The supply side of the balance sheet is still razor thin.
The chart below is where would carryout would come in at based on different yield numbers while using the current demand numbers the USDA has.
As always, if supply drops, the USDA will lower demand and offset some of the supply loss. So the chart isn’t fully accurate. But you get the idea. No room for error on yield.
That is why this market has potential. What if yield isn’t there? What if China buys soybeans?
Currently, China is placing a pretty big bet on Brazil weather.
If Brazil has any production issues at all, China will almost be forced to come to the US.
It is still too early to be calling for some drastic drought or production problem in Brazil, but the last 30 days have been pretty dry.
Here are maps from Crop Prophet that show Brazil's rainfall based on the percentage of normal.
Last 30 Days: 82% of normal
Last 14 Days: 63% of normal
Technicals:
Nov Beans
Great price action in soybeans.
We broke above $10.37 which was the 61.8% retracement up to those August highs.
Like in corn, when you break above this level, it oftens tells us that this is no longer a relief bounce and indicates there is more upside from here.
Not everytime.. but most of the time.
We also busted above downtrend resistance that marked the August and September highs.
We are now approaching my first target since our sell signal on August 22nd at $10.60
Next Target: $10.48 to $10.52
Why here?
$10.48 is the 78.6% retracement up to the August highs. It is the next fib level after the 61.8% one.
$10.52 is the golden fib (161.8%) of the first rally we saw off the lows. A common spot for a rally to pause.
In my next chart a give a better visual as to how the golden fib is calculated.
Here is how the golden fib target is calculated.
You simply take that first rally we saw, and $10.52 equals 161.8% of that the size of that first rally.
Which is marked with the gray lines.
Jan Beans
Jan beans have almost an idential set up to Nov beans.
We shattered that 61.8% level and downtrend resistance.
That first target is $10.66 to $10.67.
Which is the 78.6% level and the golden fib from the first rally.
Continuous Beans
Here is a big picture look on soybeans.
Right now we running up into the same area where we've found resistance for a now year.
However.. if soybeans ever clear that $10.80 there is a ton of upside.
For starters, the very first retracement level from the 2024 lows up to the 2022 highs is the 23.6% level. Which comes in at $11.44
Not only that.. but we have a gap of air to upside. Where this market has previously found support. That also perfectly lines up with that $11.44 level.
Here is an even bigger picture view.
You can see just how critical of level that $10.80 area is.
We've been trapped there a year. It was also key resistance back in 2017-2018.
This market has pretty much never traded between $10.80 and $11.40
Meaning there is a massive gap of air.
Lastly, here is a close up view.
This market has topped in this area 4 separate times over the past year.
It has been an absolute lid.
Which is why we will be looking to take risk off the table here soon.
But again.. if we ever clear $10.80 it opens the door so much higher to that $11.40 range.
Wheat
Fundamentals:
Like corn, wheat also found some strength due to that China headline about too much moisture.
China also grows a good amount of winter wheat, and their planting is wrapping up here soon. Too much rain are not great for that crop.
Outside of that, the wheat market still lacks a fundamental catalyst.
The charts on the other hand are providing some optimism here.
Dec Wheat Technicals:
Today was the best day for the wheat market in a month.
We now appear to breaking out of this brutal downtrend.
So the chart looks optimistically good here.
If this is truly the start of the turn around, I think we have at least another 25 to 40 cents of upside here.
Dec KC Wheat Technicals:
KC also looks like it is finally seeing a break out.
I see at least 30 cents of upside from here if this is actually the start of the move bulls have been waiting for.
Cattle
We already touched on the Trump news.
We've been very vocal about keeping protection up here at these levels and still like doing so.
Fundamentally nothing has changed in cattle.
But there are several things the government can do to add pressure to this market.
They could remove the Brazil tariffs.
They could re-open the Mexican border.
If your government is flat out telling you that they are trying to lower prices, you need to protect yourself at all-time highs after a historic run.
You do not want to caught with zero protection if this market starts to fade away. If this market tanks and you don’t already have protection, there isn’t much you can do. But you can do something right now.
I am not saying this bull run is over. It just makes sense to protect yourself when your President is telling you lower prices are coming.
Take eggs for example. They wanted lower prices. They got them.
Trump told everyone to buy the stock market on April 9th.
He then paused tariffs, and stocks have exploded higher since he said that.
Whether it is right or wrong, the government can control markets. We can’t control if they are trying to lower beef prices.
The only thing you can control is your risk in this market.
Nov Feeder Chart:
Nov feeders are now in this golden zone box.
Which is 50-61.8% of the recent rally.
This is a pretty big must hold spot.
The 50-day MA also sits right in this box.
Which we are quickly approaching.
If that level gives it, you have to imagine it sparks a leg lower.
The 50-day has acted as a complete floor. If it breaks, I'm sure the algos are going to sell it further.
This is a big spot for bulls to hold.
If we are going to bounce, it needs to be here.
Dec Live Cattle:
Live cattle is holding up better on the sell off.
That is probably because feeders led the rally higher. So they have a larger move to correct.
Like feeders, live cattle is also approaching a must hold spot.
The golden zone and that 50-day MA.
Absolute must hold.
Here is how utterly massive of support the 50-day has been.
It's marked pretty much every bottom.
The one time we broke below was April. It then sparked a sell off down to the 100-day MA.
So if the 50-day fails to hold, one could argue we fall down to the 100-day.
I am not saying cattle is going to fall apart. I am simply stating how crucial of a level we are approaching.
If this market is going to bounce, it has to be soon, or we could very well be in for some larger downside.
Past Sell or Protection Signals
Oct 13th: 🐮
Cattle sell signal & hedge alert.
Aug 22nd: 🌱
Soybean sell signal & hedge alert.
July 31st: 🐮
Cattle sell signal & hedge alert.
July 10th: 🐮
Cattle sell signal & hedge alert.
CLICK HERE TO VIEW
June 5th: 🐮
Cattle sell signal & hedge alert.
June 2nd: 🌾
MPLS wheat sell signal.
April 10th: 🌽
Old crop corn sell signal.
March 19th: 🐮
Cattle hedge & sell signal.
Feb 18th: 🌽 🌾
Old crop KC wheat & old crop corn signal.
Jan 23rd: 🌽 🌱
Corn & beans old crop sell signal.
CLICK HERE TO VIEW
Jan 15th: 🌽 🌱
Corn & beans hedge alert/sell signal.
Jan 2nd: 🐮
Cattle hedge alert at new all-time highs & target.
Dec 11th: 🌽
Corn sell signal at $4.51 200-day MA
CLICK HERE TO VIEW
Oct 2nd: 🌾
Wheat sell signal at $6.12 target
Sep 30th: 🌽
Corn protection signal at $4.23-26
Sep 27th: 🌱
Soybean sell & protection signal at $10.65
Sep 13th: 🌾
Wheat sell signal at $5.98
May 22nd: 🌾
Wheat sell signal when wheat traded +$7.00
Want to Talk?
Our phones are open 24/7 for you guys if you ever need anything or want to discuss your operation.
Hedge Account
Interested in a hedge account? Use the link below to set up an account or shoot Jeremey a call at (605)295-3100.
TRUMP WANTS LOWER BEEF & CHINA DEAL
AUDIO COMMENTARY
Trump wants to lower beef prices
Why not have puts at all-time highs?
Don’t be completely exposed in cattle
Trump says China tariffs won’t last
Trump will meet with China
Corn needs above $4.23 (chart below)*
Wheat possibly turning around (chart below)*
I still think wheat is a steal down here
Gap lower and limit down in cattle
Sounds like won’t have Nov USDA report
What happens if we don’t have an idea of where yield is at until January?
Demand feels really strong
Options cheap for protection or re-owning
If you have corn on DP
Being careful with certain elevator tools
If you’re upset with locked in basis
If a buyer is trying to get you on a basis contract
Have a plan for basis contracts
Cattle, corn, & wheat charts below*
Listen to today’s audio below
Want to talk? (605)295-3100
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CHARTS
Dec Corn 🌽
Still not out of the woods just yet.
We have not closed above the 61.8% retracement of this sell off yet, rejecting there back to back days now.
If we close above, most of the time it would suggest we are headed higher.
Big spot to break above.
Nov Feeder 🐮
We hit that target zone.
We now have a gap from today’s gap lower.
A standard correction would take us to that blue box. 50-61.8% of the recent rally.
The 50-day MA and wedge resistance (now possible support) also sit right in that box as well.
We don’t have to go that low, but that will be a point of interest if we get there.
Dec Live 🐮
Tapped the golden fib yesterday.
Unlike feeder, we filled that gap. So we do not have one.
Point of interest is the blue box.
It is the golden zone, the 50-day and previous point of break out (trendline) also sit right there.
Dec Wheat 🌾
Wheat looks pretty good here.
On the verge of a potential breakout, but no confirmation yet. Fingers crossed.
If we break out, I think we have at least roughly 40 cents higher.
Past Sell or Protection Signals
Oct 13th: 🐮
Cattle sell signal & hedge alert.
Aug 22nd: 🌱
Soybean sell signal & hedge alert.
July 31st: 🐮
Cattle sell signal & hedge alert.
July 10th: 🐮
Cattle sell signal & hedge alert.
CLICK HERE TO VIEW
June 5th: 🐮
Cattle sell signal & hedge alert.
June 2nd: 🌾
MPLS wheat sell signal.
April 10th: 🌽
Old crop corn sell signal.
March 19th: 🐮
Cattle hedge & sell signal.
Feb 18th: 🌽 🌾
Old crop KC wheat & old crop corn signal.
Jan 23rd: 🌽 🌱
Corn & beans old crop sell signal.
CLICK HERE TO VIEW
Jan 15th: 🌽 🌱
Corn & beans hedge alert/sell signal.
Jan 2nd: 🐮
Cattle hedge alert at new all-time highs & target.
Dec 11th: 🌽
Corn sell signal at $4.51 200-day MA
CLICK HERE TO VIEW
Oct 2nd: 🌾
Wheat sell signal at $6.12 target
Sep 30th: 🌽
Corn protection signal at $4.23-26
Sep 27th: 🌱
Soybean sell & protection signal at $10.65
Sep 13th: 🌾
Wheat sell signal at $5.98
May 22nd: 🌾
Wheat sell signal when wheat traded +$7.00
Want to Talk?
Our phones are open 24/7 for you guys if you ever need anything or want to discuss your operation.
Hedge Account
Interested in a hedge account? Use the link below to set up an account or shoot Jeremey a call at (605)295-3100.
TRUMP & CHINA BLOOD BATH
AUDIO COMMENTARY
Blood bath in grains & stocks
Cattle showing strength amidst weakness
Trump says he will cancel China meeting
Grains still flying blind with shutdown
Wheat struggles to find catalyst
Feeder cattle reached target (chart below)*
Like having hedges on cattle up here & rolling up puts
How to capture the cattle rally with puts
How to manage margin risk in cattle
You have to be proactive in soybeans
You have to have a plan if we don’t get trade deal
Spreads & basis been firming
Wheat will take off eventually, it just might not be when you want it to
Soybeans reject exactly off 61.8% (chart below)*
What to do if you know you have to deliver
If you want to capture the carry
Why you want a hedge account vs an elevator when aiming to capture the carry
Biggest weather bet ever on Brazil this year
Listen to today’s audio below
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CATTLE & SOYBEAN CHART
Nov Beans 🌱
We failed exactly at that critical spot we’ve been talking about for a few weeks.
We reclaimed 61.8% of the sell off before rejecting hard.
This is the most common spot for a relief bounce to end.
Both the summer bounced failed at this same level before heading lower.
Risk is lower until we break above the purple box.
Honestly, I wouldn’t be surprised if we went and posted one final leg lower, but doesn’t have to happen.
This is why one last leg lower would not surprise me. I’ve been showing this chart for a while as well.
The summer sell off featured a 5 wave move.
Up until two days ago, we only had 4 waves.
So we could definitely see that 5 wave make a new low.
Again, this doesn’t “have” to happen. But it’s definitely possible.
Nov Feeder 🐮
We almost touched that target at 377. Right up against it.
This is the golden fib from the bottom of the pennatn up to those late Sep highs.
It is a common spot for a 2nd rally to pause.
Will share target #2 if we break above this one.
Dec Live 🐮
Live finally followed feeders and got a breakout.
The chart looks pretty solid here. We did not post new ATHs but posted a new high close.
Since we got the breakout, we could potentially go and post new highs.
If we do, one target I have is the golden fib at 248.
Past Sell or Protection Signals
Aug 22nd: 🌱
Soybean sell signal & hedge alert.
July 31st: 🐮
Cattle sell signal & hedge alert.
July 10th: 🐮
Cattle sell signal & hedge alert.
CLICK HERE TO VIEW
June 5th: 🐮
Cattle sell signal & hedge alert.
June 2nd: 🌾
MPLS wheat sell signal.
April 10th: 🌽
Old crop corn sell signal.
March 19th: 🐮
Cattle hedge & sell signal.
Feb 18th: 🌽 🌾
Old crop KC wheat & old crop corn signal.
Jan 23rd: 🌽 🌱
Corn & beans old crop sell signal.
CLICK HERE TO VIEW
Jan 15th: 🌽 🌱
Corn & beans hedge alert/sell signal.
Jan 2nd: 🐮
Cattle hedge alert at new all-time highs & target.
Dec 11th: 🌽
Corn sell signal at $4.51 200-day MA
CLICK HERE TO VIEW
Oct 2nd: 🌾
Wheat sell signal at $6.12 target
Sep 30th: 🌽
Corn protection signal at $4.23-26
Sep 27th: 🌱
Soybean sell & protection signal at $10.65
Sep 13th: 🌾
Wheat sell signal at $5.98
May 22nd: 🌾
Wheat sell signal when wheat traded +$7.00
Want to Talk?
Our phones are open 24/7 for you guys if you ever need anything or want to discuss your operation.
Hedge Account
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SPECIFIC SITUATIONS YOU MIGHT BE IN
AUDIO COMMENTARY
Cattle new all-time high (target below audio)*
Live cattle haven’t broke out yet (chart below)*
What to do with cattle
Divergence between feeder & live cattle
Money wants to keep flowing in stocks & cattle
Don’t short cattle, hedge cattle
Flying blind on data in grain markets
Beans at major decision point (chart below)*
Wheat still coiling in wedge (chart below)*
I am waiting for a rally in wheat. Usually, every 3-4 months wheat provides an opportunity
Specific situations you might be in
If you have soybeans that you have to haul because yields are better than expected, just don’t strike out. Spread out that risk. Don’t chase home runs
What to do if you don’t have any storage
What to do if you have excess bushels
Should you be re-owning corn? If so, how?
What to do if you are forced to sell your corn
Why you should spread your risk out
Cattle, beans & wheat charts below audio*
Listen to today’s audio below
Want to talk? (605)295-3100
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Starting next week you will not get future updates or our next signal.
CHART BREAKDOWNS
Nov Beans 🌱
We are RIGHT at the decision point.
This is where we find out if this bounce is simply a relief bounce, or the start of a larger rally.
If we are going to reject, it should be here.
If we close above the purple box, more often than not it would be an indication we are headed higher.
The top of the purple box reclaims 61.8% of the sell off. The most common spot for a relief bounce to reject.
So we should know soon what decision the market makes.
Nov Feeder 🐮
We broke out of this bullish pennant pattern we have been talking about.
Posting fresh all-time highs.
We continue to find life at the 50-day MA. It’s been an absolute floor the entire bull run.
The 50-day MA is going to be your warning sign this market is ready to roll over. Until then, you can’t help but lean higher.
The golden fib is at 377. I think that’s a reasonable target.
The golden fib equals 161.8% of the rally we saw from the bottom of the pennant to that late Sep top. I outlined this with the gray lines.
If we hit there, I think that will be a great opportunity to de-risk.
Dec Live 🐮
Live cattle is different than feeder.
We have not broken out of this recent downtrend yet.
If we break out, it should result in all-time highs like we saw in feeder.
Just like feeder, the warning sign is going to be the 50-day MA. If that ever breaks it could cause the flood gates to open much lower.
Dec Wheat 🌾
We are still coiling in this falling wedge.
Personally my bias still leans towards a break out.
If the break out comes, I think we should have room to run to $5.45
It hasn’t mattered yet, but we’ve been printing bullish divergence since August.
Prices are making new lows.
The RSI is not.
A sign downside momentum is getting weaker.
Past Sell or Protection Signals
Aug 22nd: 🌱
Soybean sell signal & hedge alert.
July 31st: 🐮
Cattle sell signal & hedge alert.
July 10th: 🐮
Cattle sell signal & hedge alert.
CLICK HERE TO VIEW
June 5th: 🐮
Cattle sell signal & hedge alert.
June 2nd: 🌾
MPLS wheat sell signal.
April 10th: 🌽
Old crop corn sell signal.
March 19th: 🐮
Cattle hedge & sell signal.
Feb 18th: 🌽 🌾
Old crop KC wheat & old crop corn signal.
Jan 23rd: 🌽 🌱
Corn & beans old crop sell signal.
CLICK HERE TO VIEW
Jan 15th: 🌽 🌱
Corn & beans hedge alert/sell signal.
Jan 2nd: 🐮
Cattle hedge alert at new all-time highs & target.
Dec 11th: 🌽
Corn sell signal at $4.51 200-day MA
CLICK HERE TO VIEW
Oct 2nd: 🌾
Wheat sell signal at $6.12 target
Sep 30th: 🌽
Corn protection signal at $4.23-26
Sep 27th: 🌱
Soybean sell & protection signal at $10.65
Sep 13th: 🌾
Wheat sell signal at $5.98
May 22nd: 🌾
Wheat sell signal when wheat traded +$7.00
Want to Talk?
Our phones are open 24/7 for you guys if you ever need anything or want to discuss your operation.
Hedge Account
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CORN SITUATION & CATTLE BREAK OUT?
MARKET UPDATE
You can scroll to read the usual update as well. As the written version is the exact same as the video.
Timestamps for video:
Overview: 0:00min
Corn: 1:25min
Bean: 5:35min
Wheat: 9:25min
Cattle: 10:40min
Want to talk about your situation?
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Futures Prices Close
Overview
Grains mixed with soybeans leading the way higher on optimism of trade aid, while the wheat market leads the way lower.
Meanwhile, the cattle market bounces right at some crucial support off the back of screwworm news and no trade deal between Brazil and the US.
Thursday was supposed to be the October USDA report. That is not happening.
This is now day 7 of the government shutdown.
However, despite there not being a report. The analysts still provided their estimates for the report.
Corn Yield: 185 (186.7 in Sep)
Bean Yield: 53.2 (53.5 in Sep)
Chart from Allendale
Corn Carryout: 2.231 (2.110 in Sep)
Bean Carryout: 0.299 (0.300 in Sep)
Wheat Carryout: 0.875 (0.844 in Sep)
Corn stocks are projected to be higher due to that quarterly stocks report. Where the USDA was +200 million too high on their old crop feed demand numbers, which automaically got added to the new crop balance sheet in the form of beginning stocks.
Chart from Allendale
Today's Main Takeaways
Corn
Despite harvest ramping up fast, sitting around 30% complete based on the estimates. The corn market isn’t seeing any major harvest pressure.
The market is definitely aware that yield is smaller, some think it could be drastically smaller. Hence why we are hanging in there.
From a pure fundamental standpoint, you could argue corn should be heading lower.
I mean we are looking at a 2.2 to 2.3 billion bu carryout.
Which would peg out stocks to use ratio at some pretty high levels.
Given the extra acres, even if yield dropped to 180 and you left demand unchanged, it would still only print around an 11% stocks to use which isn’t super bearish, but it's not crazy bullish by any means either.
Here is the rough current balance sheet vs with a 180 yield and no demand changes.
Here is what that 11% would look like compared to other years.
Way less burdensome than the current projections, still not out of this world bullish.
We have to keep in mind, that even if yield falls. The USDA will also be taking feed & residual demand back which could offset some of this.
However, on the other hand. The only marketing year that saw over a +2 billion carryout over in recent memory was 2023/2024.
The 2023/2024 marketing year ran from Sep 2023 to August 2024.
If you look at prices during this time frame, we only spent a handful of weeks below $4.00.
Which was last August before we went on that run.
So the point is, does corn really have to venture below $4.00 by a wide margin if at all?
Given the record acres.. we are going to have record corn production no matter where yield comes in at.
Even if yield is 175 we are still going to have a record production number.
However.. we have been creating a demand monster for the last year.
2023 was our record production year.
In 2023, exports were 2,150 million bushels.
The current estimate for this year is 2,975 million.
A near 50% increase.
So we have record supply, but we also have record demand offseting that supply.
Here is a good chart from Karen Braun I showed last week.
Look at our exports compared to 2023. Up to this point, we are nearly double what we were then.
Despite the huge crops out of both the US and Brazil, the world situation is still one of the tightest in years.
The tightest in 13 years.
The world still needs corn.
Now the biggest risk in this corn market has to be a post-October insurance sell-off. That would be the worst-case scenario to end the year.
If we look at the seasonal patterns, the 5-year suggests a possible grind the higher the rest of the year. That is what has happened on average over the last 5 years.
However, both the 10 and 15 year patterns suggest a top in October, followed by an end of year sell off.
The most recent example of this was 2023.
That is the one year during that 5-year seasonal window where we did not grind higher the rest of the year.
We sold off in late October and never looked back.
The red line is 2023.
Technicals:
Pretty simple chart in Dec corn.
We had a failed breakout today. Rejecting right off this newly formed downward trend.
If we get the breakout above, it should spark a leg higher.
Target is still $4.35 to de-risk.
We still have an interesting potential inverse head & shoulders pattern.
Which in nature, is considered bullish.
Soybeans
Fundamentals:
Soybeans saw a boost today because the market is anticipating a trade aid package.
There isn’t a ton of news for the market to trade, so any positive news here helps support the market.
Why is this a supportive factor?
Mainly because it could keep some bushels off the market.
Prices aren’t great to begin with. Basis is awful in plenty of areas because we aren’t seeing any business to China. So this aid might help farmers hold on and not dump as much supply into the market.
However, trade aid does make it seem like the government isn’t extremely confident about a trade deal coming to boost prices relatively soon.
It might be quiet here for the next few weeks.
We don’t have the USDA report. China and Trump aren’t scheduled to talk until the end of the month. So the market does not have much to digest and trade on.
Little fundamental changes can lead to quiet markets.
It's mostly a waiting game here in soybeans. We always get a nice boost on these trade deal talks, then sell off after the meeting because it didn’t lead to anything. So you really can’t get overly excited unless this meeting actually materially changes something.
Long term you do have to be somewhat optimistic on how a trade deal could impact things. Short term is the concern given that we've already missed a good chunk of our prime shipping window.
I still find it hard to imagine that yield is going to be +2 bpa higher than anything we've seen before.
As a reminder, we did just one one of the driest finishes on record.
Here is the precip rankings from Aug 1st to Sep 15th.
Technicals:
We rejected right at this golden zone retracement box.
As we reclaimed 61.8% of the recent sell off.
This is a normal size for a correctional bounce. So unless you break above that box, this bounce is seen as nothing more than a usual relief bounce. Meaning the risk is still lower.
If we break above the box, most of the time it would suggest we've put in our lows. As it would no longer be a standard-sized relief bounce in a broader correction.
I'm also cautious here because we could see a similar pattern play out like we did earlier this summer unless we break that box I mentioned above.
Often times, markets move in 5 waves.
The summer sell off saw 5 waves.
So far we only have 4.
Both the 2nd and 4th wave on the summer sell off rejected the 61.8% level. The level we are are currently battling.
This doesn’t have to happen at all. I just can’t be confident in this market until we clear the purple box. It's a big spot.
I've shown this chart recently as well.
Soybeans have traded in one of the smallest & longest ranges we've ever seen.
Trapped between $9.60 and $10.80 for 427 days now. Essentially sideways for over a year.
Finding support at our trade war resistance. While finding resistance where we did in 2016-2018.
Soybeans absolutely hate trading in the $11.00's. Which is marked with the blue box.
We either rally to $12 or break into the $10.00's.
My bias leans towards the belief that $9.60 is our new long term floor. But if you ever broke below that level things could get ugly.
On the other hand, if we ever take out $10.80 the chart is completely open to the upside.
There are so many unknowns in this market. But if we strike a deal with China, this chart has so much room to run long term.
Wheat
Fundamentals:
Very little fresh news in wheat.
Seasonally, this is the time of the year where wheat tries to buy some acres but has struggled to find a catalyst to move higher.
We certainly aren’t buying extra acres here.
We just have an ample amount of supply around the world and no real concerns anywhere.
On the bright side, our exports are fantastic. Some of the best demand we've seen in years. Which doesn’t have to lead to higher prices right now, but is one way you can chew into the carryout and paint a friendly situation here in the US.
It's just a waiting game in wheat. Being patient for opportunities. They just might not come as soon as any of us would like.
Dec Wheat Technicals:
We continue to trickle lower. But I personally still think we are coiling for a move higher.
Still trapped in this falling wedge. Waiting for the breakout.
If the breakout comes, I think we could reasonably run to $5.45.
Which gives back 38.2% of the June highs and is old support.
Dec KC Wheat Technicals:
Pretty similar to Chicago.
Coiling in this wedge pattern.
If the breakout comes, a reasonable target would be $5.35 which is old support and 38.2% of the June highs.
Cattle
We had a few pieces of news that's been supporting cattle.
First was that there was another screwworm case in northern Mexico.
It looks like someone knew this info was coming because the market rallied before this came out. But it looks like the border isn’t re-opening soon.
We also had the news that Trump and Brazil did not come to a trade agreement. So the tariffs remain on Brazil beef.
As Trump and Brazil spoke for the first time since he added 50% tariffs on Brazil's beef.
Brazil is the #1 beef exporter in the world. This 50% tariff means that their beef gets priced out of the market.
These pieces of news came at a pretty perfect spot on the charts. Right at critical support.
Oct Feeder Chart:
We were sitting in a wedge pattern and got the breakout today.
That is a pretty friendly sign and suggests we could go print new highs.
If we post new highs, we have a potential target of 377.
That is the golden fib from the bottom of the wedge up the previous end of Sep high (outlined on the chart).
(If you are new, the golden fib means it equals 161.8% of the prior move).
This is a common spot for a 2nd rally to pause.
To the downside, the biggest thing to watch is the 50-day MA. That is a must hold spot and will be our warning sign that this market is truly experiencing a larger correction.
The 50-day has acted as an absolute floor in this market.
If it breaks, it could open the door much lower.
The downside target would be to give back 50-61.8% of the entire rally since June. Which is also where the 100-day MA sits.
They always say the trend is your friend. Until the 50-day gives out, you have to lean higher.
Dec Live Cattle:
Live has not had the breakout that feeders have had.
However, we bounced EXACTLY where we needed to.
Right off that 50-day MA.
This market has bounced there countless times. The only time we broke below it was back in April. We then proceeded to fall to the 100-day.
So the 50-day is still the must hold spot and warning sign. If it gives out, it could open the floor gates lower.
But so far we've continued to hold.
Past Sell or Protection Signals
Aug 22nd: 🌱
Soybean sell signal & hedge alert.
July 31st: 🐮
Cattle sell signal & hedge alert.
July 10th: 🐮
Cattle sell signal & hedge alert.
CLICK HERE TO VIEW
June 5th: 🐮
Cattle sell signal & hedge alert.
June 2nd: 🌾
MPLS wheat sell signal.
April 10th: 🌽
Old crop corn sell signal.
March 19th: 🐮
Cattle hedge & sell signal.
Feb 18th: 🌽 🌾
Old crop KC wheat & old crop corn signal.
Jan 23rd: 🌽 🌱
Corn & beans old crop sell signal.
CLICK HERE TO VIEW
Jan 15th: 🌽 🌱
Corn & beans hedge alert/sell signal.
Jan 2nd: 🐮
Cattle hedge alert at new all-time highs & target.
Dec 11th: 🌽
Corn sell signal at $4.51 200-day MA
CLICK HERE TO VIEW
Oct 2nd: 🌾
Wheat sell signal at $6.12 target
Sep 30th: 🌽
Corn protection signal at $4.23-26
Sep 27th: 🌱
Soybean sell & protection signal at $10.65
Sep 13th: 🌾
Wheat sell signal at $5.98
May 22nd: 🌾
Wheat sell signal when wheat traded +$7.00
Want to Talk?
Our phones are open 24/7 for you guys if you ever need anything or want to discuss your operation.
Hedge Account
Interested in a hedge account? Use the link below to set up an account or shoot Jeremey a call at (605)295-3100.
USDA & CORN TRUTH FINALLY EXPLAINED
MARKET UPDATE
You can scroll to read the usual update as well. As the written version is the exact same as the video.
Timestamps for video:
USDA: 0:00min
Corn: 4:15min
Beans: 7:10min
Wheat: 9:00min
Cattle: 10:45min
Want to talk about your situation?
(605)295-3100
USDA Sale Ends Tonight
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Futures Prices Close
Overview
Grains lower across the board with today's USDA report.
Today we had the quarterly stocks, which is our final old crop balance sheets, along with wheat production.
The report provided a bearish surprise in both corn & wheat.
Old crop corn stocks came in above expectations due to a cut to feed & residul demand.
Old crop wheat stocks also came in above expectations due to finding extra winter wheat acres.
Meanwhile, the report was essentially neutral for soybeans with no major changes made.
Let's dive right into the report and what it means..
Corn Truth Finally Explained
As expected, this was bearish for corn.
Here is the numbers in case you missed them.
Corn came in +200 million higher than estimates.
Wheat was +80 million higher than estimates.
Beans were just under the estimates.
The USDA found an extra +200 million bushels of old crop corn.
This change in old crop did NOT come from last year's crop being bigger. They left production virutally unchanged.
The USDA dropped old crop feed & residual demand by almost -200 million. Which is where the entirety of this change came from.
We had said all week that this was the biggest risk for this report. Because this market simply never traded like we had a sub 9% stocks to use ratio or a 1.3 billion bushel carryout.
So almost everyone expected that this report would provide an explanation as to why corn performed so poorly the last year despite the supposedly friendly balance sheet. That is exactly what we got.
The market has been hinting at us for months that this crop was never at a 1.3 billion carryout.
Instead, it was actually at 1.5 billion.
Instead of an 8.7% stocks to use ratio. It was actually over 10%.
Here is the final old crop balance sheet with the new updated numbers vs what it looked like before this report.
Old Crop Before Report
Final Old Crop Balance Sheet
Here is a good visual from Karen Braun that shows how corn stocks changed from the Sep WASDE to the Sep Stocks Report.
This was the 2nd biggest upside change in decades. Only behind 2010.
Here is a visual of the stocks to use ratio over the years.
Which includes new crop with the fresh 2.3 billion carryout, along with old crop before & after this report.
There is a big difference between being below 9% and being over 10%.
But at least we partially know why this corn market never traded like it should have.
A sub 9% stocks to use ratio indicates a full blown bull market, but it was never actually true.
What does this mean for new crop corn?
Not only did we find +200 million bushels of old crop corn, but it automatically carries over to new crop and adds another +200 million bushels of supply to the new crop balance sheet.
As this gets added to "beginning stocks".
So instead of a 2.1 billion bushel carryout, this now gives us a whopping 2.3 billion bushel carryout without making any other changes.
(2.1 billion + 200 million = 2.3 billion)
Here is a visual of carryout the last few years.
2.3 is a pretty bearish number.
This 2.3 is not set in stone, as the USDA can make some other changes by the next report.
But purely using their numbers from the Sep WASDE report, while adding this extra supply leaves you with 2.3 billion.
Government Shut Down?
I just wanted to mention this quickly.
There is an 87% chance that the government will shut down today according to the betting markets.
If this happens, we may or may not get the October USDA report. As the USDA is a government agency.
The USDA report is scheduled for October 9th. However, I believe they compile the data during the first week of October.
Today's Main Takeaways
Corn
The corn market continues to have bearish surprise after bearish surprise thrown at it.
We had more acres TWICE.
A record yield.
Now more stocks.
This report was not friendly for corn at all. It makes it that much harder to paint a friendly situation.
But.. the market was expecting this to a certain extent. This corn market has battled through some incredibly bearish headlines.
Here is what I mean when I say this makes it even that much harder to paint a bullish scenario in corn.
Here is the current balance sheet from the Sep WASDE, with the added beginning stocks once again for reference.
Without changing anything else, we now have a 2.3 billion bushel carryout.
Now here is what the balance sheet would’ve looked like if you hadn’t added that extra +200 million bushels of supply and if yield fell all the way down to 180 bpa.
Cuts to demand would’ve offset some of this, but without changing demand it would’ve resulted in a carryout of 1.5 and a stocks to use ratio below 10%.
180 Yield Before This Report (New Crop)
Now instead.. since we have an extra +200 million.. if yield dropped to 180 it would only result in a carryout of 1.7 with a near 11% stocks to use ratio. Which isn’t super bullish.
This is without changing demand.
If yield gets cut, the USDA is almost certainly going to be cutting some of those lofty demand numbers as well.
180 Yield After This Report (New Crop)
Most believe feed demand is at least +200 million too high.
After all.. they did just cut our old crop feed & residual demand by -200 million as well.
If that is the case, there is a possible scenario where we wind up with a 180 yield and still have a near 2 billion bushel carryout.
In this scenario we dropped yield to 180 and cut feed demand by -200 million. It results in a carryout of 1.9 billion.
This is why this extra supply it makes it even harder to eat into that carryout.
180 Yield With -200 Million Feed & Residual
Am I super bearish corn here? No of course not.
I still think our harvest lows are in and that this market has priced in a lot of bearishness.
We have had 3 very bearish corn reports in a row, and the corn market has held in there.
However, it is incredibly hard to paint some mega bullish scenario in corn unless yield somehow winds up in the realm of 175.
Short term we do also still have to deal with that harvest pressure.
Dec Corn Chart:
Despite the bearish numbers, we didn’t have that awful of price action. Only down -6 cents on the day.
Currently we are right at this cluster of support and bounce nicely off the lows today.
Break below and we could test that red box.
We need to hold that red box to keep an upward bias. That is the golden zone retracement of the entire rally off of contract lows.
Soybeans
This USDA report virtually made zero changes to the soybean situation.
We still have zero business to China.
The biggest question is.. will our losses in demand offset the possible losses in supply?
If China truly stays away, it would take an immense cut to yield to offset that type of demand loss.
China is the wild card.
Seasonally this is soybeans weakest time of the year as well.
Nov Beans Chart:
We posted new lows for the move today and are now very cleary below that must hold spot. Which was the 61.8% retracement down to the lows.
This tell us that this sell off is probably something bigger.
Where could we post our lows?
I could easily see us falling down to the $9.90 range.
That is about where that trendline comes in that marked the last 3 major bottoms in this market.
That is where I would potentially look at some re-ownership strategies.
What Should You Do With Beans?
There are a few different strategies you can use in soybeans.
We have a massive carry in this market. The market is telling you to simply store soybeans and caputure that carry.
Another possible strategy would to simply sell soybeans off the combine and re-own with a call option, as this is cheaper than storage & interest costs.
Implied volatility for soybeans are at some historically low levels. This means options are cheap because the market isn’t expecting big moves.
However, with the 2nd option you could give up a lot of basis potential.
Give us a call or text if you have questions or want specific advice tailored to you: (605)295-3100
Wheat
The report was bearish for wheat just like corn.
Winter wheat surprised high. Winter wheat production is now up almost +4% vs last year.
We saw spring wheat also surprise high, but spring wheat production is still down over -8% compared to last year.
The interesting thing about this report is that the production increase came almost entirely from more acres. As the USDA left yield unchanged.
They added +450k of harvested acres to Texas with overall winter wheat acres jumping by +773k. Which was an unpredictable surprise.
This report was bearish no doubt.
This was the 2nd largest increase to production we have seen in this report in over 20 years.
However, I still have a hard time getting overly bearish at $5.00 wheat.
Despite selling off today, the charts didn’t create any damange and are still in tact.
Seasonally this is still the time of year where we usually find some life.
I am still being patient waiting for an opportunity.
Dec Chicago Chart:
We are right back down to the bottom of this channel once again.
This is where we have continued to bounce for months, so I would like to think we continue to defend it.
This falling wedge pattern is starting to get pretty tight.
Bulls want to see us bust of out this wedge higher to get some momentum.
Despite posting contract lows once again.. the RSI once again did not post a new low.
We continue to show bullish divergence on the RSI and have been showing this for weeks now.
Dec KC Wheat Chart:
KC wheat also sitting in this falling wedge pattern.
Waiting for a direction and decision to be made.
Bulls watching for a breakout.
Cattle
Continous Feeder Chart:
When front month feeders rolled from Sep to Oct, we left a roll gap at 364.
Oct Feeder Chart:
If we look at Oct feeder, that 364 level would also challenge those recent highs.
If we break above that level it is probably a sign we're going to go post new contract highs.
To the downside, need to hold the red box or we could very easily drop down to the blue one.
Feeder Monthly Chart:
This was our first month where we traded lower for the month since all the way back in October of last year.
Nearly an entire year without a single red month.
We could easily go and post new highs in this market.
But that doesn’t mean I am not going to be managing my risk up here.
I am still very cautious up here.
If we look at open interest, it has been droppping by a large amount.
Open interest is the total number of long or short positions in the market. Basically, market participants have been leaving.
If you pair this with cattle posting it's first month lower in a year, it definitely makes me all that more cautious up here.
The funds have also been jumping out of those record-long positions.
They are now holding their smallest long position since last year.
Past Sell or Protection Signals
Aug 22nd: 🌱
Soybean sell signal & hedge alert.
July 31st: 🐮
Cattle sell signal & hedge alert.
July 10th: 🐮
Cattle sell signal & hedge alert.
CLICK HERE TO VIEW
June 5th: 🐮
Cattle sell signal & hedge alert.
June 2nd: 🌾
MPLS wheat sell signal.
April 10th: 🌽
Old crop corn sell signal.
March 19th: 🐮
Cattle hedge & sell signal.
Feb 18th: 🌽 🌾
Old crop KC wheat & old crop corn signal.
Jan 23rd: 🌽 🌱
Corn & beans old crop sell signal.
CLICK HERE TO VIEW
Jan 15th: 🌽 🌱
Corn & beans hedge alert/sell signal.
Jan 2nd: 🐮
Cattle hedge alert at new all-time highs & target.
Dec 11th: 🌽
Corn sell signal at $4.51 200-day MA
CLICK HERE TO VIEW
Oct 2nd: 🌾
Wheat sell signal at $6.12 target
Sep 30th: 🌽
Corn protection signal at $4.23-26
Sep 27th: 🌱
Soybean sell & protection signal at $10.65
Sep 13th: 🌾
Wheat sell signal at $5.98
May 22nd: 🌾
Wheat sell signal when wheat traded +$7.00
Want to Talk?
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WILL NEXT WEEKS USDA EXPLAIN POOR CORN PRICES?
AUDIO COMMENTARY
Quarterly stocks report on Tuesday
Wheat production on Tuesday
Some years this report is a yawn, sometimes it brings big surprises
Could this USDA report explain the poor prices we saw this year?
Report could tell us if last years crop was bigger
I don’t think it’s realistic that they put the crop smaller, because basis and everything does not indicate that
This report offers more downside risk than upside
We had a 1.3 carryout, no invert, and no basis firm. This market did not trade like a 1.3 billion bu carryout
Some should be buying puts that cover you the next month
How to establish a “free” floor with calls & puts
Longer term I see upside, but short term why do we have to go higher heading into harvest?
Soybeans don’t tend to move as much as corn does on this report
Whenever we get something done with China, we will have a friendly soybean situation
What happens if there is a hiccup in SA’s crop?
Wheat higher from today 15 years in a row
If buyers realize you don’t have a plan, they can use that to their advantage
Listen to today’s audio below
Want to talk ? (605)295-3100
Your free trial has ended
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Past Sell or Protection Signals
Aug 22nd: 🌱
Soybean sell signal & hedge alert.
July 31st: 🐮
Cattle sell signal & hedge alert.
July 10th: 🐮
Cattle sell signal & hedge alert.
CLICK HERE TO VIEW
June 5th: 🐮
Cattle sell signal & hedge alert.
June 2nd: 🌾
MPLS wheat sell signal.
April 10th: 🌽
Old crop corn sell signal.
March 19th: 🐮
Cattle hedge & sell signal.
Feb 18th: 🌽 🌾
Old crop KC wheat & old crop corn signal.
Jan 23rd: 🌽 🌱
Corn & beans old crop sell signal.
CLICK HERE TO VIEW
Jan 15th: 🌽 🌱
Corn & beans hedge alert/sell signal.
Jan 2nd: 🐮
Cattle hedge alert at new all-time highs & target.
Dec 11th: 🌽
Corn sell signal at $4.51 200-day MA
CLICK HERE TO VIEW
Oct 2nd: 🌾
Wheat sell signal at $6.12 target
Sep 30th: 🌽
Corn protection signal at $4.23-26
Sep 27th: 🌱
Soybean sell & protection signal at $10.65
Sep 13th: 🌾
Wheat sell signal at $5.98
May 22nd: 🌾
Wheat sell signal when wheat traded +$7.00
Want to Talk?
Our phones are open 24/7 for you guys if you ever need anything or want to discuss your operation.
Hedge Account
Interested in a hedge account? Use the link below to set up an account or shoot Jeremey a call at (605)295-3100.
ARGY TAXES REAPPLIED. HOW MUCH SUPPLY TO OFFSET DEMAND?
MARKET UPDATE
You can scroll to read the usual update as well. As the written version is the exact same as the video.
Timestamps for video:
Argy, China, Trump News: 0:00min
Exports: 2:45min
Seasonals: 4:00min
Corn: 4:45min
Beans: 8:15min
Wheat: 11:40min
Cattle: 13:05min
Want to talk about your situation?
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You will not receive our next signal or future updates
Lock in our harvest sale before its over
Futures Prices Close
Overview
Decent day for the grains as the wheat market catches a bid while the cattle market takes a hit.
Earlier this morning all the grains were decently higher, but both corn & soybeans faded off the early highs.
This first story is probably the biggest reason for the strength.
Argy News
This was the biggest news today and had the grains higher this morning.
Argentina's cut to their export tax is already over after just 3 days. As export tax is back on for the grains but still on for beef.
The terms of this cut to export tax on grains were that the cuts remained until October 31st or if grain/oilseed export sales reached the $7 billion cap.
They already met that $7 billion cap so taxes have been re-applied.
Sources say that China bought around 90 million bushels of soybeans from Argentina while taxes were cut.
So we undoubtedly lost some business there.
However, we probably won’t be seeing much more business out of Argentina now.
The reason that Argentina did the tax cuts was to generate some cash and help boost their economy.
As the Argentina Peso has lost -99% of it's value compared to the US Dollar in the past decade, and lost -30% of it's value this year alone. Despite getting a +10% bounce this week due to all of this news.
The US has now announced they are going to extend a $20 billion currency swap line to Argentina, and also buy Argentina's bonds.
Essentially, they are lending $20 billion USD to Argentina. Argentina can then use that money to help stabilize it's economy. Later on, Argentina is then suppose to swap the money back to the US.
By the US doing this, yes we are helping support one of our biggest competitors. But by giving them money, does that now help keep their exports closed for longer now? Potentially helping China come to the table if Argy is closed for business. Who knows, but something to think about.
China News
On Monday, China expressed that they were possibly interested in buying US soybeans.
They signaled that they could buy US soybeans ahead of bigger trade talks "IF" the tariffs were dropped.
On the export market, US soybeans are cheaper than Brazil. But the tariffs are making Brazil beans cheaper than US ones. So China continues to stay away.
Basically, China says they will only buy our beans if we lift the tariffs.
Trump News
Trump announced that US farms will receive some of the proceeds from tariff revenues.
He said:
"Farmers are going to hurt for a little while, until the tariffs kick in to their benefit."
"Ultimately, the farmers are going to be making a fortune."
This does kind of sound like he is not expecting a deal to be struck with China soon, as he makes it sound like the tariffs are here to stay and China essentially said they won’t buy soybeans until the tariffs go away.
Exports
Corn 🌽
We now have RECORD corn exports.
We have offically passed 2021.
The craziest part is that in 2021, China accounted for nearly 50% of all of these exports.
We haven’t sold a penny to China this year.
Chart from Karen Braun
Corn is +5% ahead of the USDA's estimates.
Those estimates already seemed pretty large to begin with, but we are now surpassing them.
Needless to say, corn demand remains phenomenonal.
Many have tried to argue that corn export estimates are too high, but based on this, you can’t really make that argument yet.
The USDA has some lofty expectations, but we are continuing to impress.
I think the bigger question mark for corn demand is going to be the feed and residual. Not exports.
Chart from Robert McClure on X
Soybeans 🌱
Soybeans exports on the other hand remain well below expectations.
Demand everywhere outside of China has been great, but it's hard to make up for the lack of China.
As soybean exports are -19% behind the USDA's expectations.
We are almost certainly going to see the USDA lower their export projections for soybeans.
Chart from Robert McClure on X
Wheat 🌾
Wheat demand remains great along with corn demand.
Well ahead of the USDA's current projections.
Chart from Robert McClure on X
Seasonals Update
Corn 🌽
5 Year:
We've followed this one very close this year. It marked the exact bottom and rally thus far. It has us grinding higher the rest of the year.
10 Year:
This one says we make our highs in October before grinding sideways.
Beans 🌱
5 Year:
Typically we carve out lows in early to mid-October before rallying into November. Which typically coincides with some South America production uncertainty.
Wheat 🌾
The 5, 10, and 15 year seasonal all say we head higher from here.
All of them have us posting our local top in mid-October.
Today's Main Takeaways
Corn
Demand is amazing.
Yield is getting smaller, some say perhaps drastically smaller.
However, the only reason you can’t get super bullish on this corn market (not yet anyways) is because we are going to have record production even if that yield falls short.
Here is a chart that shows corn production over the years, along with where production would be based on different yield scenarios.
Even if yield fell all the way down to 175, we would still print a record production number given the massive acres.
The current estimates have us being rougly +1.5 billion bushels higher than our previous record in 2023.
That is how big our production is.
However, on the bright side, demand is also the strongest it has ever been. So this helps offset that.
Production is indeed getting smaller.
We've already priced in a massive crop.
So you can’t really get bearish corn here either.
Normally, we are suppose to struggle to rally throughout harvest.
However, once harvest is out of the way and once we get into that January report where I am sure yield is going to be smaller, you do have to wonder where the ceiling is in this corn market.
Here are a few balance sheet scenarios, without changing demand numbers.
Arlan Suderman says this crop is between 178 to 182, and would be surprised if it was bigger but not smaller.
So here is what those potential balance sheets could look like. As always, demand will be cut to offset some of these losses. But it gives you an idea.
Here is the current balance sheet for reference:
182:
It would put our stocks to use ratio around 10.5% to 11% depending on how much they drop demand.
With a 1.7 billion bushel carryout.
That still isn’t exactly bullish, but it's not sub $4 corn bearish.
180:
Here is where things get a little more interesting.
It drops our carryout to 1.5 billion.
Again, this is barring demand changes. If the USDA drops demand by a -100 million then you simply add +100 million to our carry out and get 1.6 billion instead.
It drops our stocks to use ratio below 10%, which is considered bullish.
178:
Now this could potentially paint a bullish situation in the corn market.
This drops carryout down to 1.3 billion.
Dropping our stocks to use ratio to nearly 8%.
In this scenario, even if the USDA dropped feed demand by -200 million our stocks to use would still be below 10% (check 2nd chart for this).
So a 178 could give you a bullish scenario even if demand estimates are too high.
Daily Dec Chart:
Still planning on de-risking at $4.35
That gives back 50% of the Feb highs and is key support from spring.
No damange has been done to this chart. We are simply consolidating above previous resistance. Old resistance is new support.
The price action is pretty similar to what we saw before that last bullish pennant breakout. As before that breakout we consolidated right at old resistance as well.
Short term I'd like to see us hold this newly formed trend and that blue support box. If the box breaks we probably make a leg lower.
Soybeans
The soybean market is struggling to make a decision.
Does the potential loss in supply make up for the possible loss in demand?
China is the wild card.
Most are saying that exports for soybeans could drop by -300 to -400 million if China refuses to come to the table.
Currently, our exports are behind by -19%. If we continued this pace, exports would end up short by -320 million.
So let's dive into how this impacts the balance sheet and how much supply loss it would take to truly offset these demand losses if we see them.
For this experiment, we are cutting exports by -300 million and only changing yield.
Here is the current balance sheet for reference:
53.5 Yield:
With the loss in exports, this would sky rocket our carryout to 600 million vs the current 300 million.
Our carryout would double.
We had a 300 million carryout. We lost -300 million demand. Which results in a 600 million carryout.
Now that is very bearish.
It would be the highest since the trade war.
52 Yield:
Carryout would still be almost 500 million.
Still very bearish.
51 Yield:
Carryout is 400 million.
That isn’t crazy trade war bearish, but is still far from being super friendly.
For reference, our final carryout the last two years was around 350 million.
50 Yield:
Carryout would remain roughly the same as it is today with a 53.5 yield.
So if exports are cut by -300 million, it would take a 50 bpa yield to offset those losses in demand.
Leaving our balance sheet about where it is at today.
Which is the tightest in 3 years, but still not considered out of this world bullish.
51 Yield & No Demand Change:
Now here is the balance sheet if demand wasn’t dropped at all and yield came in at 51.
It becomes virtually non-existent. Which would be very bullish.
However, there is no chance the USDA doesn’t lower exports to some extent.
The bigger question is by how much?
Here is what all of those examples look like compared to other years.
This is why there is so much uncertainty in this market, and why you could argue for $9 or $12 soybeans and no one would call you crazy for either argument.
If China actually doesn’t buy any soybeans at all, we could be in trouble.
But if demand isn’t actually in trouble and our yield isn’t as big as advertised, there is a realistic path for this thing to get incredibly tight.
Daily Nov Chart:
Soybeans still hovering right at this 61.8% level at $10.12
This is where the market makes a decision. We either bounce and this is it for the sell off, or we make another leg lower.
If we take out Tuesday's low, I could easily see us testing the $9.90 level. Which is where that trendline that marked the last 3 major bottoms is at.
That is where I would look at some potential re-ownership strategies if we get there.
For now, I am waiting to see what decision the market makes here at this critical spot.
Wheat
Nothing to update fundamentally on the wheat market.
However, I am really liking what I am seeing on the charts.
Daily Chicago:
We are once again bouncing at the bottom of this massive channel like we have done a dozen times.
Now sitting in somewhat of a falling wedge pattern.
Today we did post an outside up day, where we took out yesterday’s lows but closed above yesterday’s highs.
That is seen as a positive sign.
If we zoom in here, I am still watching the $5.35 level.
I think if we break above there, it sparks a leg higher. If we break above, I'd be confident we finally posted our lows.
The chart looks promising but we need to break that level for confirmation.
First point of interest after that is $5.49
On Monday I talked about how we were showing some massive bullish divergence the past few weeks.
We posted new contract lows on Monday, but once again the RSI posted another higher high.
This tells us the downside momentum is getting weaker, not stronger.
Daily KC Wheat:
KC looks pretty good here as well.
Also sitting in a bigger picture wedge pattern.
Need to see us take out those highs from last week to say we found our true bottom.
After that our first point of interest is $5.40
Like Chicago, on Monday we printed some clear bullish divergence.
Cattle
Our partner Lauren of Texas Hedge specializes in the cattle market, and has more fundamental knowledge in this market than I do. Here is what she had to say:
Thoughts from Lauren Urbanczyk of Texas Hedge:
Feeder were limit up on Monday based on the secretary of ag saying that relief was coming to American ranchers to rebuild the beef herd, since cattle supply is historically low.
The market took this and ran with it as rumors of a stimulus package was coming for heffer retention. However, it was then confirmed today by the secretary of ag that there is no stimulus coming for cattle ranchers in the form of heffer rettenion.
So the market gave back all of it's early gains from earlier this week. Beef has struggled as we seasonally get a September pullback. So a lot of this is following the seasonals.
This situation was kind of a buy the rumor sell the fact situation. As the market digested the rumors to realize they were just rumors.
We have cash trading -$3 lower in Texas, and in some instances -$5 lower in Kansas. So a weaker tone to the markets to the cash side and to beef. We are starting to see the futures give away.
Both live and feeder cattle are about flat on the week. So tomorrow’s price action will important to see if we get higher weekly closes or not.
Oct Feeder:
Earlier this week we bounced right in the golden zone where we needed to.
On the recent bounce, we rejected right off the 78.6% retracement up to the contract highs (the 61.8% level is more common, but this bounce was overextended)
The most common correction pattern is an "ABC".
So the must hold spot here is the red box. If the red box fails to hold, we could easily get a broader correction down to the blue one. Which is the golden zone of the entire rally since June.
If we drop into the blue box, that is where I would potentially consider some re-ownership strategies.
We still like having protection up here.
Oct Live:
Very similar chart to feeder. Except on the recent rally we rejected right off the 61.8% level we talked about on Monday. Which is where we needed to close above to be more confident we'd go test the highs.
Area to hold is the red box.
If it fails, we could easily get that bigger correction towards the blue box.
Past Sell or Protection Signals
Aug 22nd: 🌱
Soybean sell signal & hedge alert.
July 31st: 🐮
Cattle sell signal & hedge alert.
July 10th: 🐮
Cattle sell signal & hedge alert.
CLICK HERE TO VIEW
June 5th: 🐮
Cattle sell signal & hedge alert.
June 2nd: 🌾
MPLS wheat sell signal.
April 10th: 🌽
Old crop corn sell signal.
March 19th: 🐮
Cattle hedge & sell signal.
Feb 18th: 🌽 🌾
Old crop KC wheat & old crop corn signal.
Jan 23rd: 🌽 🌱
Corn & beans old crop sell signal.
CLICK HERE TO VIEW
Jan 15th: 🌽 🌱
Corn & beans hedge alert/sell signal.
Jan 2nd: 🐮
Cattle hedge alert at new all-time highs & target.
Dec 11th: 🌽
Corn sell signal at $4.51 200-day MA
CLICK HERE TO VIEW
Oct 2nd: 🌾
Wheat sell signal at $6.12 target
Sep 30th: 🌽
Corn protection signal at $4.23-26
Sep 27th: 🌱
Soybean sell & protection signal at $10.65
Sep 13th: 🌾
Wheat sell signal at $5.98
May 22nd: 🌾
Wheat sell signal when wheat traded +$7.00
Want to Talk?
Our phones are open 24/7 for you guys if you ever need anything or want to discuss your operation.
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WHEN WILL CORN DEMAND TRAIN SLOW DOWN?
AUDIO COMMENTARY
Still have caution in cattle
Don’t be exposed to margin in cattle
Waiting for next weeks big USDA report
Most I hear have yield less than last year
Demand is a big wild card
US soybeans could supply others who originally were getting supply from SA
Corn demand still remains salty
China is putting big bets on SA crops
Interest rates going lower
Things get interesting if yield drops
Like getting feed needs covered
The market says sell the carry
Don’t love taking grain to town at harvest
Where is bean bottom? (chart below)*
Listen to today’s audio below
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SOYBEAN CHART
Nov Beans 🌱
I’ve had this blue box as the must hold spot on the chart since we alerted that sell signal at the top.
This bottom of the box gives back 61.8% of the entire rally off $9.80. Breaking below tells us that this sell off is more than a simple correction.
This could still be a potential bear trap as we haven’t fully busted below this level, but if we close below yesterday’s lows it likely opens the door lower.
That $9.90 area would be an area of interest. That trendline that marked all 3 major bottoms in this market this year. That is where I would start to look at some re-owning strategies etc.
Past Sell or Protection Signals
Aug 22nd: 🌱
Soybean sell signal & hedge alert.
July 31st: 🐮
Cattle sell signal & hedge alert.
July 10th: 🐮
Cattle sell signal & hedge alert.
CLICK HERE TO VIEW
June 5th: 🐮
Cattle sell signal & hedge alert.
June 2nd: 🌾
MPLS wheat sell signal.
April 10th: 🌽
Old crop corn sell signal.
March 19th: 🐮
Cattle hedge & sell signal.
Feb 18th: 🌽 🌾
Old crop KC wheat & old crop corn signal.
Jan 23rd: 🌽 🌱
Corn & beans old crop sell signal.
CLICK HERE TO VIEW
Jan 15th: 🌽 🌱
Corn & beans hedge alert/sell signal.
Jan 2nd: 🐮
Cattle hedge alert at new all-time highs & target.
Dec 11th: 🌽
Corn sell signal at $4.51 200-day MA
CLICK HERE TO VIEW
Oct 2nd: 🌾
Wheat sell signal at $6.12 target
Sep 30th: 🌽
Corn protection signal at $4.23-26
Sep 27th: 🌱
Soybean sell & protection signal at $10.65
Sep 13th: 🌾
Wheat sell signal at $5.98
May 22nd: 🌾
Wheat sell signal when wheat traded +$7.00
Want to Talk?
Our phones are open 24/7 for you guys if you ever need anything or want to discuss your operation.
Hedge Account
Interested in a hedge account? Use the link below to set up an account or shoot Jeremey a call at (605)295-3100.
EFFECTS OF DEMAND & BEANS AT CRUCIAL SPOT
AUDIO COMMENTARY
Very crucial spot in soybeans (chart below)*
Soybeans have major upside potential and downside risk
There is a lot riding on South America weather soon
The effects of the Argy tax cuts
Long term demand picture
Crops are definitely smaller
How high we go depends on demand
2011 comparisons floating around
Still close to corn signal (chart below)*
Still believe wheat has upside (chart below)*
Do funds want to jump behind China story or lack of supply story in soybeans?
Have a game plan for basis contracts
Seasonals say soybeans go lower short term
Be proactive if you’re in a corner
Listen to today’s audio below
Want to talk? (605)295-3100
GRAIN CHARTS
Dec Corn 🌽
Bouncing at some support here in this blue box. Getting a re-test after the bullish pennant breakout. Would like to see us hold the blue box.
Target is still $4.35 as has been for weeks now.
Nov Beans 🌱
Soybeans fighting for their life. Trying to hang on to this must hold spot.
$10.12 gives back 61.8% of the rally off $9.80
Today we bounced +7 cents off the the lows and closed right at that 61.8% level.
Either we bounce right now, or if we close back below $10.12 we have a gap of air to the downside towards the $9.90 range.
Very very important spot here.
Dec Wheat 🌾
Bouncing right at the bottom of this channel once again.
We are still showing some very clear massive bullish divergence.
The level to watch is still $5.35.
If we clear that level we can be confident we are ready to turn higher.
Past Sell or Protection Signals
Aug 22nd: 🌱
Soybean sell signal & hedge alert.
July 31st: 🐮
Cattle sell signal & hedge alert.
July 10th: 🐮
Cattle sell signal & hedge alert.
CLICK HERE TO VIEW
June 5th: 🐮
Cattle sell signal & hedge alert.
June 2nd: 🌾
MPLS wheat sell signal.
April 10th: 🌽
Old crop corn sell signal.
March 19th: 🐮
Cattle hedge & sell signal.
Feb 18th: 🌽 🌾
Old crop KC wheat & old crop corn signal.
Jan 23rd: 🌽 🌱
Corn & beans old crop sell signal.
CLICK HERE TO VIEW
Jan 15th: 🌽 🌱
Corn & beans hedge alert/sell signal.
Jan 2nd: 🐮
Cattle hedge alert at new all-time highs & target.
Dec 11th: 🌽
Corn sell signal at $4.51 200-day MA
CLICK HERE TO VIEW
Oct 2nd: 🌾
Wheat sell signal at $6.12 target
Sep 30th: 🌽
Corn protection signal at $4.23-26
Sep 27th: 🌱
Soybean sell & protection signal at $10.65
Sep 13th: 🌾
Wheat sell signal at $5.98
May 22nd: 🌾
Wheat sell signal when wheat traded +$7.00
Want to Talk?
Our phones are open 24/7 for you guys if you ever need anything or want to discuss your operation.
Hedge Account
Interested in a hedge account? Use the link below to set up an account or shoot Jeremey a call at (605)295-3100.
ARGY NEWS BLOOD BATH
MARKET UPDATE
You can scroll to read the usual update as well. As the written version is the exact same as the video.
Timestamps for video:
Argy News: 0:00min
Trump & China: 2:30min
Dollar & Demand: 3:25min
Corn: 4:25min
Beans: 7:00min
Wheat: 11:05min
Cattle: 13:10min
Want to talk about your situation?
(605)295-3100
Your free trial has ended..
Don’t miss our next sell signal or future updates. Lock in our harvest sale so you’re ready for the next opportunity
Futures Prices Close
Overview
Blood bath in the grains to start the week. Soybeans and wheat we were hit hard while corn actually showed some nice resilience.
Meanwhile the cattle market continues to bounce in the golden zone off the back of screw worm news and a neutral to friendly cattle on feed report (we'll talk more about this in the cattle section).
Why the sell off in grains?
Some news caught the market off guard this morning. The news was that Argentina is removing export taxes on all grains until October 31st.
Before today, export tax for them was 9.5% on corn and wheat, and 26% on soybeans. It is now zero.
Why is this a big deal?
It essentially floods the market with cheaper product. Because this lowers the cost of exporting for Argentina, and incentivizes them to ramp up their exports. Pushing more supply to the market and adding competitive pressure to US exports.
More competition for our exports is bad for our prices. Because less exports results in more supply here at home.
Why did Argentina do this?
Normally, when they export, they are taxed every time they sent product out of the country. Which cuts into profits. Removing this tax now lets them keep more money for their product.
Removing this encourages farmers to sell their grain and bring more cash into their economy.
They want to help their economy because the value of the Argentina Peso is down -99% vs the US Dollar in the last 10 years.
Essentially, Argentina is hoping that this will accelerate exports and help stabilize their economy.
Argentina farmers are holding on to a lot of grain because they think selling now won’t give them enough money. This tax cut might help a little bit, but it is probably only a temporary fix to a bigger issue.
In 2023, Argentina inflation hit 300% and their inflation rate was above 25% per month.
Since then it has fallen down to 2% a month or 34% a year. Which is an improvement, but compared to the US we have a 2% yearly inflation target.
I'm not sure how negative of effect this is actually going to have on our exports. The tax cut is only for a month, and a lot of times the intial reaction to news can often be worse than the actual effects.
However, for soybeans specifically, having Argentina that much more competitive during prime shipping season isn’t friendly. Especially given China is already avoiding the US.
China & Trump
We talked about this in yesterday’s audio, but this was the biggest reason for the weakness on Friday in soybeans.
On Friday, soybeans were up +10 cents at one point during the call.
Immediately after the call we sold off and then closed down -12 cents because the call Trump and China had was a disappointment to say the least.
I mentioned last week that I thought it would be a nothing burger for ag and be mostly about TikTok. Which it was.
Their call mentioned absolutely nothing about soybeans.
Trump also mentioned that he wouldn’t be visiting China until early next year.
However, Trump did say he will meet with China's President in South Korea on October 31st.
The current trade truce deadline between the China and US is on Nov 10th.
So perhaps we get some good news then.
The issue is that if no progress is made until early next year, we would miss prime time shipping season.
US Dollar & Demand
I don’t believe there is a true correlation to the US dollar and grain prices.
Often times people will say "the wheat market is down because the dollar is higher today".
Well that just isn’t the case. If it was, wheat should’ve been posting an enormous rally. Cleary it hasn’t.
Here is the US dollar performance vs the wheat market performance the past few years.
Really no correlation. Especially this year.
Despite this, a weaker US dollar is in fact friendly for the grains. It just isn’t a day to day correlation.
A weaker dollar makes us that much more competitive on exports and helps boost demand.
The US dollar is on track for one of it's weakest years in decades.
(2025 is in black)*
Corn and wheat demand are also posting some of their strongest export numbers in years.
For example wheat exports are up +21% vs last year.
They are the strongest compared to expectations in 12 years.
Chart from Karen Braun
Today's Main Takeaways
Corn
The first thing I wanted to talk about in corn today was StoneX's Arlan Suderman.
In Market to Market last week, he was asked where he truly thinks this crop is at.
His Answer: 178 to 182
He said:
"I wouldn’t be surprised if it was lower than that, but I would be surprised if it was higher than that."
Arlan is the same person many were upset with just a few months ago because his yield survey model had a 188 corn yield back in August.
It's pretty clear this crop is getting smaller.
August StoneX Survey
Even if yield is 180 or so, we are still going to have a record crop and record acres.
Which makes it hard for corn to simply run away here, especially heading into harvest. We just saw a +40 cent rally ahead of harvest and normally it’s hard to rally through out harvest.
Now despite the fact we will have record production no matter how you cut the pie, this isn’t anything new.
The market is aware of this and has been pricing this in for months.
This market already priced in a near 190 yield.
The day the USDA gave us a 188.8 yield and added +1 billion bushels of supply to the balance sheet marked the exact lows in this market.
Because it was priced in.
Now although the record acres and production might make it hard to see dramatically higher corn here in the short term, that doesn’t mean we have to be bearish corn.
There really isn’t a reason to be overly bearish when the market already priced in about as bearish of a scenario you could paint.
The farther out you look at corn, the more friendly the possible situation becomes.
I mean do you really think we will keep 98 million acres of corn next year?
This comes after creating some massive demand down here.
Final Thoughts:
I have a hard time thinking corn is going to be a runaway train short term here.
We have too much supply to get overly bullish, but we have strong enough demand to not be bearish. With a crop that is getting smaller, not larger, after pricing in a massive yield just a month ago.
I still think the harvest lows are in and I remain optimistic looking towards next year.
Ready to take advantage of opportunities when they come.
Daily Dec Chart:
Corn was the bright spot in grains today.
We closed slightly lower but well off the early lows.
We are essentially just back testing this small range from the beginning of the month (blue box).
My current game plan is still to de-risk at $4.35
That is 50% of the Feb highs and key support from spring.
Soybeans
Soybeans got hit with back to back bearish headlines.
First the lack of a China deal Friday and then the Argentina tax cut this morning.
Soybeans are now down over -50 cents from the recent highs and have given back the entire rally that the USDA report gave us after dropping acres.
The soybean market is a tricky one to navigate here.
On one hand, we still have zero beans sold to China. You can’t get overly bullish until we know whether our export program is in jeopardy or not.
On the other hand, it's hard to get too bearish knowing that our supply is getting smaller with not a ton of room for error.
Basically, the exact opposite story in corn. Corn has too much supply but amazing demand. Beans have a potential supply problem, but not enough demand.
You could realistically make an argument that soybeans could be $9 or $12 by this same time next year, and both arguments could be valid.
On a big picture scale, soybeans have traded completely sideways for a year now.
Trapped in an +/- 80 cent range since last year.
This is the longest and smallest range we've seen in a very long time.
There are so many unknowns and possibilities in this market, and the direction has yet to be decided.
The funds positioning in this market paints a good picture as to how much uncertainty there is in this market.
The funds haven’t been too long or too short this market the entire year, they keep flip flopping right around an even position.
Here is a chart from Ag Yield that shows the funds position and the funds open interest.
Their position has gone sideways (Blue).
At the same time, open interest has declined sizeably (Orange).
Basically, the funds don’t even know what to do with this market.
No one really knows whether China is going to come to the table or not. That is the risk in this market.
If China continues to refuse, then we could see more downside.
If China buys, the soybean balance sheet could get awfully tight as yield is getting smaller on a balance sheet that can’t afford to lose supply given the smaller acres.
One potential wild card coming up soon is going to be Brazil.
Will they get a production scare? And if they do, will that be enough to spook China buyers to come the US if they don’t think Brazil's crop will be as big as they expected?
There are so many unknowns in this market.
I've been showing the 5-year seasonal for a few weeks now and how this is seasonally a weak time frame.
Here is all of the seasonals combined.
Seasonally, we are selling off right on schedule. As this is often our weakest time frame of the year.
Usually that bottom then comes around the first week of October.
Daily Nov Chart:
Soybeans are now below $10.12 which is the 61.8% retracement of the entire rally off of $9.80
We closed today at $10.11, just one penny below the must hold level.
Either this is a bull trap and we bounce right now, or we are headed lower.
We should know tomorrow.
This level is a must hold spot. If we close below $10.12 again, then this sell off is no longer viewed as correctional. It is seen as something bigger.
We have a gap of air lower down to that trend that marked multiple bottoms in this market. So if we break below here, that is the next point of interest.
One other thing I am seeing here.
Today we closed right at the 1 to 1 move lower from the first sell off after the August highs. (Marked with purple arrows)
Meaning that this 4 day sell now equals exactly the size of that first sell off we saw.
If you remember back at the $9.80 lows, we found our bottom at the 1 to 1 move lower from the previous sell off as well.
As that mid-July to August sell off equaled the same size as the sell off we saw after the 4th of July. (Marked with blue arrows)
This is a must hold spot.
Wheat
Nothing fresh fundamentally in the wheat market, as wheat continues to do what wheat always does.
I do think that we would’ve found our lows if it hadn’t been for the Argentina news spooking the market.
The most friendly factor in wheat has been demand. It continues to surpass expectations.
This is a bullish long term factor, but the wheat market just lacks that one catalyst to really push this market higher.
Although we lack a defining catalyst, I can’t get bearish wheat down at these levels.
Seasonally wheat still carves out lows here.
Seasonal lows played out pretty perfectly in both the corn & soybean market this year.
I'd like to think wheat eventually catches a bid here as well at a time where it should, but time will telll.
Corn 5 Year Seasonal
Beans 5 Year Seasonal
Daily Chicago:
We had that falling wedge breakout, but then rejected right at key resistance.
That $5.35 level if going to be a major level to break above.
As I have been saying for a few weeks, if we break above that level that is going to be our sign saying that this market is finally ready to head higher.
We are now sitting right back down at the bottom of this channel.
This is where this market has bounced a dozen times before. Hopefully we do it once again.
Chicago wheat is still showing massive bullish divergence like it has been for a few weeks now.
We posted yet another round of contract lows, yet the RSI continues to post higher highs.
Daily KC Wheat:
We failed the breakout of the downward channel (pink lines).
Still sitting in a large wedge pattern.
Bounced right at some support today.
If we take out last week's highs I think that'll be our indication the low is in.
KC wheat is also now showing bullish divergence on the RSI as well.
We posted new lows, meanwhile the RSI did not.
Cattle
Impressive day for cattle off the back of few different pieces of news.
The biggest reason for the strength was screw worm news.
The story that is going around is that an 8 month old calf started in the southern Mexico area (which is an area known to be effected withs crew worm) was brought up to a feed yard roughly 70 miles away from the Texas border. The calf then tested positive for screw worm.
This is now the most northern detection of the screwworm during this outbreak.
Some think that the last few weeks of weakness was partly due to speculation that they would talk about reopening the border.
This news further delays the border re-opening, and it doesn’t appear like it will happen soon.
The other piece of news was the cattle on feed report.
The report wasn’t super bullish or bearish. As it came in around expectations.
But the report still told us there is a tight situation.
Placements are down -10% vs 2024, and are the lowest in 10 years.
Marketing numbers are down -14% vs 2024, and are the lowest on record since the series began in 1996.
Here is the numbers vs the estimates:
Here is a state by state breakdown of placements vs 2024.
Only two states are higher compared to last year.
There is a supply problem in this market. But that problem is also known.
The biggest question in this market is, when is this problem finally priced in?
Eventually, this market will turn lower once it is priced in. It's just hard to say exactly when that will be.
Oct Feeder:
Feeders look pretty good here.
We bounced perfectly in the golden zone from those August 1st lows. Right where we needed to.
We now reclaimed over 61.8% of this sell off. So odds favor us now going to test those highs again.
If not, the must hold spot is the red box.
I still like keeping downside protection up here via puts for most of you.
Let's say we go and post new highs.
We would more than likely be showing some serious bearish divergence.
With prices making new highs but the RSI not.
Unless the RSI goes and posts a new high as well.
Something to keep an eye on moving forward if we post new highs.
Oct Live:
Live cattle also bounced right in the golden zone perfectly.
We closed right at the 61.8% retracement of the recent sell off. So we need one more push to say we are going to test the highs.
The must hold spot is going to be the red box for now.
Past Sell or Protection Signals
Aug 22nd: 🌱
Soybean sell signal & hedge alert.
July 31st: 🐮
Cattle sell signal & hedge alert.
July 10th: 🐮
Cattle sell signal & hedge alert.
CLICK HERE TO VIEW
June 5th: 🐮
Cattle sell signal & hedge alert.
June 2nd: 🌾
MPLS wheat sell signal.
April 10th: 🌽
Old crop corn sell signal.
March 19th: 🐮
Cattle hedge & sell signal.
Feb 18th: 🌽 🌾
Old crop KC wheat & old crop corn signal.
Jan 23rd: 🌽 🌱
Corn & beans old crop sell signal.
CLICK HERE TO VIEW
Jan 15th: 🌽 🌱
Corn & beans hedge alert/sell signal.
Jan 2nd: 🐮
Cattle hedge alert at new all-time highs & target.
Dec 11th: 🌽
Corn sell signal at $4.51 200-day MA
CLICK HERE TO VIEW
Oct 2nd: 🌾
Wheat sell signal at $6.12 target
Sep 30th: 🌽
Corn protection signal at $4.23-26
Sep 27th: 🌱
Soybean sell & protection signal at $10.65
Sep 13th: 🌾
Wheat sell signal at $5.98
May 22nd: 🌾
Wheat sell signal when wheat traded +$7.00
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WHAT TO EXPECT HEADING INTO HARVEST
AUDIO COMMENTARY
Beans down hard on lack of China deal
Will supply loss offset demand loss in beans?
What will the US dollar do?
Watching harvest results
No major damage on charts
Bias leans higher in wheat still
Wheat isn’t suppose to be sold this time of year
Do your basis diligence
Have we given the funds a story yet?
More rate drops in the future. Could this help give the funds a reason to stop selling?
Could see a similar story as last year
Could see sideways action for a month or two before we get opportunities
Corn is the only one close to a sell signal
Beans at must hold level (chart below)*
Listen to today’s audio below
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SOYBEAN CHART
Nov Beans 🌱
Soybeans are now right above a major must hold level.
$10.12 to $10.22
This blue box retraces 50-61.8% of the entire +80 cent rally off the lows.
We can fall all the way down to the bottom of the box and this entire sell off could still be viewed as a simple correction.
Bulls need to hold that box, or this sell off is no longer viewed as a simple correction. It is likely something bigger if it breaks.
Below this box we do also have a gap of air lower towards that trendline that has marked some pretty significant lows in this market several times.
Past Sell or Protection Signals
Aug 22nd: 🌱
Soybean sell signal & hedge alert.
July 31st: 🐮
Cattle sell signal & hedge alert.
July 10th: 🐮
Cattle sell signal & hedge alert.
CLICK HERE TO VIEW
June 5th: 🐮
Cattle sell signal & hedge alert.
June 2nd: 🌾
MPLS wheat sell signal.
April 10th: 🌽
Old crop corn sell signal.
March 19th: 🐮
Cattle hedge & sell signal.
Feb 18th: 🌽 🌾
Old crop KC wheat & old crop corn signal.
Jan 23rd: 🌽 🌱
Corn & beans old crop sell signal.
CLICK HERE TO VIEW
Jan 15th: 🌽 🌱
Corn & beans hedge alert/sell signal.
Jan 2nd: 🐮
Cattle hedge alert at new all-time highs & target.
Dec 11th: 🌽
Corn sell signal at $4.51 200-day MA
CLICK HERE TO VIEW
Oct 2nd: 🌾
Wheat sell signal at $6.12 target
Sep 30th: 🌽
Corn protection signal at $4.23-26
Sep 27th: 🌱
Soybean sell & protection signal at $10.65
Sep 13th: 🌾
Wheat sell signal at $5.98
May 22nd: 🌾
Wheat sell signal when wheat traded +$7.00
Want to Talk?
Our phones are open 24/7 for you guys if you ever need anything or want to discuss your operation.
Hedge Account
Interested in a hedge account? Use the link below to set up an account or shoot Jeremey a call at (605)295-3100.