CORN NEW YEARLY HIGHS. PRO FARMER 173 YIELD
AUDIO COMMENTARY
Corn posts new highs for the year
Reversals on the cattle charts
Friendly cattle on feed after Trump comments
Pro Farmer says 173 corn yield
Largest difference between tour & USDA ever
Funds long large amount but room to buy
Pro Farmer increased bean production
What to do if you are oversold?
Market doesn’t believe we have huge crop
Can sell $6-7 corn calls for decent money
China buying a lot of soybeans
Corn been straight up since USDA report
This market is largely led by demand
Making new highs when usually make lows. Counter seasonal rallies can be pretty powerful
Great opportunities for protection here
We want to ride the wave higher via options
Do not want to gap higher then close lower
Pro Farmer vs USDA data below audio*
Listen to today’s audio below
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TOUR VS USDA DATA
Pro Farmer: 173.2
Aug USDA: 180.7
Difference: -7.5
Below is a graph that shows the last several year’s difference from the tour vs the final USDA.
Simply by looking at the graph, the tour has a tendency to be lower than final yield, but does that tell the whole story?
Make sure to keep scrolling as we dive deeper into this data.
The last chart I show has the most data and breaks it all down.
This graph shows the last 20 years of the tour vs final USDA.
Average Deviation: Tour vs Final USDA
Here is a chart that shows the data for the last 20 years and how far off the tour has been from the final USDA.
Over the last 20 years, the average deviation has been around 3-4 bushels higher or lower when compared to the final USDA.
Over the last 10 years, Pro Farmer has on average came in 2.5 bpa lower than the final USDA.
Tour vs Aug USDA vs Final USDA:
Since 2014, the tour has correctly pointed in the direction of where final yield came in compared to August in all but two years.
The two years it was wrong on the direction were 2017 and 2023.
Pro Farmer’s 173.2 is -7.5 bpa below the USDA’s 180.7
That would be the largest difference between the tour and the Aug USDA in at least a decade.
Here are some other years where Pro Farmer was more than 5 bpa below the Aug estimate and what happened to final yield.
2019:
Tour -6.2 bpa below Aug USDA
Final USDA was -2 bpa below Aug USDA
2022:
Tour was -7.3 bpa below Aug USDA
Final USDA was -2 bpa below Aug USDA
2025:
Tour was -6.1 bpa below Aug USDA
Final USDA was -2.3 bpa below Aug USDA
So each time the tour has been this far below the USDA’s August number, the final yield has came in lower than in August.
But the final yield did not come all the way down to the Pro Farmer numbers.
Take a look at 2019, 2022, and 2025 on this table for reference.
Here is the tour vs Aug USDA vs final USDA chart.
Want to Talk?
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Email: sfrost@dailymarketminute.com
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GRAINS KNOCKING ON YEARLY HIGHS
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:
Crop Tours: 0:00min
Corn: 1:50min
Corn Charts: 7:00min
Beans: 9:15min
Beans Charts: 11:15min
Wheat Charts: 12:50min
Cattle Charts: 14:20min
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Futures Prices Close
Overview
Corn continues to lead the counter seasonal rally off the back of the Pro Farmer crop tours that continue to show disappointing results.
Corn, soybeans, and wheat are all knocking on the door of their highest prices they've seen all year long. Within striking distance of contract highs in all three as well.
Dec corn is up +45 cents the last week alone, since last week's USDA report.
Let's jump right into the crop tours as this is the main headline that's caught the market's attention.
Crop Tours
The results have been coming in quiet a bit worse than most were expecting.
This has led to the market to starting to question what happens to the balance sheet if yield drops even further. Below the USDA's recent 180.7 bpa. We'll get into this later, but it would make things very interesting.
So far we only have the data for 5 states. They did western Iowa, but the full Iowa results will be out tonight.
Corn:
Below is a chart that shows how the USDA expects each states yield vs last year. Along with how the crop tour expects yield vs last year.
The crop tour has yields lower than the USDA for every single state they've toured so far.
Even states such as Ohio and Indiana where the USDA expects a better yield than last year, the crop tours are showing worse yields than last year.
Soybeans:
The tour has pod counts lower than the USDA expects yield in every state besides from Nebraska.
Again we are seeing similar results here like in corn.
The USDA has yield improving vs last year in Ohio, Indiana, and Illinois. Yet the tour's results are showing lower pod counts in all of them.
Today's Main Takeaways
Corn
Fundamentals:
These tours are sparking a lot of conversation about a yield below 180.7 bpa.
And what happens if yield were to come in lower than that, perhaps in that 175 to 178 range?
A 180.7 bpa yield would still be the 2nd largest yield of all-time.
A 178 yield would be the 3rd largest of all-time.
So a yield below 180 would not be out of the realm of impossible.
If yield gets much lower from here, we simply cannot meet the record demand we've been creating with these low prices the last few years.
We could realistically see one of the largest crops we've ever seen and still run into some bull market conditions simply due to demand.
Our exports have literally doubled since 2022/23.
What happens if yield is sub 180?
Let's throw the numbers into the balance sheet.
For these examples, we will be leaving demand unchanged.
179 yield = 9.20% S/U
178 yield = 8.66% S/U
177 yield = 8.11% S/U
Those are all very bullish scenarios with a sub 10% stocks to use.
Normally, the USDA will try to offset losses in supply with losses in demand.
However, just because we have less supply does not mean that the demand is simply going to disappear.
To justify us losing demand, prices would need to go higher.
Demand isn’t going anywhere unless we have high enough prices to incentive doing so. Prices at these levels are not going to do that.
This record demand needs to be met with supply, or we should go higher.
One very possible thing we could see happen is the USDA bumping up our old crop exports once again.
Let's say they bump them by +100 million.
That alone drops the new crop balance sheet below a 10% S/U even if yield ends up at 180.7 bpa.
Like we've talked about a thousand times.
If you want corn much above $5.00 or so, that stocks to use needs to fall below 10%.
Each bull run has had a below 10% stocks to use.
As we've talked about the last week, we are starting off in a very tight spot.
As of the August USDA, we have the tightest situation for August since 2022.
With the potential to get even tighter if yield doesn’t rise or if the USDA doesn’t find more acres again.
Not only do we have the tight US situation.
Let's not forget the world is the tightest it's been on corn in over a decade.
So the world clearly needs the US to perform. Or we simply can’t meet the global demand.
Highs by Month:
We haven’t shown this chart since May. This shows new crop corns highest price for every single month the last 20 years.
Today we came within a penny of those May highs.
We have not posted our highs for the year in August since 2011 and 2012.
Other things to note, we have never posted our highs in September or October.
The last two bull markets came after we posted our highs in November the year prior. (2020 and 2010).
So if you are looking for an indication we are going a lot higher. Posting new highs into the end of the year has been a good sign.
Yesterday's Alert:
Yesterday we did send out a sell and hedge alert.
This was mostly geared towards those who:
Are behind in their marketing
Are short on time
Lack storage
Need to move off the combine
Our thoughts are still that corn has a ton of upside potential.
So if you are in a comfortable spot in your marketing and don’t need to do anything, we like being plenty patient. As I think we will see more opportunities down the road.
Jeremey talked about this in depth yesterday. But one thing we do NOT want to do is put ourselves in a situation where we are oversold.
We've been in a multi-year bear market. Nothing would be worse than selling everything and having this market go crazy high.
Do we "have" to go massively higher? No. But we have to respect that the potential is there for the first time in a long time. So it makes sense to keep plenty of dry powder in case that does happen, even though, it doesn’t "have" to happen.
But those who are in one of those situations where you need to be more proactive, you can not completely ignore this opportunity.
We are at our highest price we've had all year, heading into harvest.
This has been a phenomenal counter seasonal rally.
They don’t happen that often.
Normally we are posting our lowest price for the year right about now, not our highest price.
If you compare Dec corn over the last several years.
This is the highest price we've seen for today's date since 2022.
Surpassing 2023 and sitting far above both 2024 and 2025.
In yesterday's alert, we covered a few different strategies you could consider.
We always prefer to use options as a tool to lock in a floor or keep your upside open. As using options simply gives you a lot of flexibility in your marketing.
Some of those strategies included puts for downside protection. Selling calls to help pay for the puts. Or selling some cash and re-owning with options.
If you have questions on them, as always please give us a call or a text and we'd be happy to help.
Office: (806)484-1214
Alert: Click Here to View
Dec Corn Chart:
We tapped those highs from May and closed about -3 cents off the highs.
Could we just blast through here? Sure it's possible.
This could also turn into a short term double top.
Considering we just ran +45 in the last week without stopping.
Rallies need to breathe and a pullback would be healthy.
If we get a decent pullback, I think it would be viewed as a good re-ownership opportunity. As I like the idea of owning corn into the end of year.
If the pullback happened right here, I'd be eyeing the $4.75 to $4.80 range for now.
RSI Divergence:
We still have bearish divergence on the RSI.
It doesn’t mean we cannot go higher. Just a reason to have some caution here soon.
Possible Dec Targets:
As for our next targets.
$5.13 is the golden fib from the August lows up to the July highs. Meaning it's 161.8% of that move.
That same level is contract highs.
Beyond that, we open the door up to some higher possibilities.
I'm sure the next targets will change, but one we have out there is the $5.50 range.
$5.56 is the golden fib from the contract lows up to those May highs. Again, the golden fib means it's 161.8% of that move.
Continuous Front Month Chart:
If we look at the continuous charts.
We are running into some possible resistance here as well.
With a simple trend line that marked the 2025 highs and the highs from May.
However, if we crack above that, things get interesting.
Monthly Chart:
Corn tends to be trapped in a $1.00 range.
In the 90's and early 2000's that range was $2.00 to $3.00
From 2014 to 2020 that range was $3.00 to $4.00
Our new range has been $4.00 to $5.00
Each range has turned the prior ceiling into the new floor.
If we break above $5.00 on a front month basis, it would look like we are breaking out the range. It would also be our very first higher high of the entire bear market.
So if we break $5.00, it would be a good sign of things to come when looking at the long term structure.
Soybeans
Fundamentals:
Crush demand is hot.
China is consistently buying. We continue to see flash sales almost daily.
Here is a good graph from GrainStats (@GrainStats on X).
Our soybean sales for next marketing year are their best since 2021/22.
We've talked about this before, but if China ends up fulfilling that goal, the market has not priced that in yet.
The USDA expects exports to be up just +140 million vs last year.
Yet.. China says they are going to be buying +480 million more than last year.
A massive 340 million difference between the two.
The entire US soybean carryout is 320 million bushels.
So we clearly don’t have the supply to fulfill that goal unless we ration demand to non-China destinations.
Prices likely need to go higher to ration demand.
This is one of the biggest bull arguments for soybeans.
South America is going to be the other big wild card.
If we look at the world situation for soybeans, it's not bearish.
it's actually the tightest it's been in several years.
This is with Brazil consistently producing record crop after record crop.
What do you think happens if South America has a hiccup? Things would get awfully interesting for the soybean market.
The world's largest producer continues to put out record crops, yet the global situation continues to get tighter. Because demand is that strong.
I'm no weather guru.
But right now they are saying that this current Super El Niño is the strongest of all-time.
Here's a nice chart from Karen Braun (@kannbwx on X).
This shows the sea surface temperature anomalies.
It's sitting at its warmest levels ever for this time of year.
If we look at how El Niño is expected to affect the world globally.
This map shows how El Niño has historically impacted rainfall from October to March.
It's supposed to lead to dry conditions down in Brazil.
Their weather season starts here soon, in a month or two.
Nov Beans Chart:
We've seen a great rally off that key support and buy zone.
Now to the upside, we broke above that golden zone. Which suggests this is not just a relief rally and that amplifies the odds of us holding those recent lows.
The first big level is of course going to be those recent $12.55 highs, which we are within striking distance of.
If we get a sizeable pullback, the levels I am currently watching are $11.95 to $12.05 if they come.
That would be the golden zone just above peak volume.
It's also the highs from May.
If we break above the recent highs, the next area I am looking to de-risk at is going to be around $13.00
$13.12 is the 161.8% level and golden fib from the recent lows up to those July highs.
Overall I like staying plenty patient in soybean marketing if you're at a comfortable spot and or rewarded those July highs when we talked about taking risk off the table.
Like in corn, we do not want to be oversold simply due to the potential.
Continuous Front Month Chart:
If we look at this chart, $12.50 is a major level.
It's right where we recently failed.
It's the highs from 2024.
It's the lows from 2023.
So a clear area of key resistance. If we break above it should result in further upside.
There is still an unfilled gap right around $13.00 as well.
The long term structure in soybeans remains pretty bullish purely looking at the chart.
Wheat
Dec KC Wheat Chart:
Currently battling those July highs.
If we happened to get a decent pullback here, the area I'd look for a bounce is $7.40 to $7.48.
Which is the golden zone and peak volume.
On the other hand, if we can bust above these July highs I have a target of $8.40 to $8.50
Which would be the implied move from this cup and handle pattern we are sitting in.
It would also be the 161.8% move from the recent lows up to the July highs.
Weekly KC:
The weekly chart looks great.
It appears that we are finally breaking above that major $7.50 resistance on the continuous chart.
That level marked the recent highs.
It was the highs from May earlier this year.
It was the highs from 2024.
It was the lows from both 2023 and 2022.
Lastly, it was the highs from 2021.
So it's been a very clear area of support and resistance countless times.
Breaking above this could very well lead to further upside.
MPLS Wheat:
We've clawed back exactly 61.8% of the sell off. This is an important level.
If we can break above this level, could run towards the highs.
We are sitting in a cup and handle pattern just like the rest of the wheat complex.
If we break above the highs, the golden fib sits at $8.15
(Sorry for the different chart. My usual software I use for charting doesn’t include MPLS wheat)
Cattle
Oct Live Chart:
Still trying to cling on to must hold support here.
The 61.8% retracement down to the November lows.
If we lose this level, it could very easily open the door to get another leg lower.
We are showing some bullish divergence on the RSI still. Prices made new lows. Yet the RSI did not.
So that could be a potential sign we're losing some downside momentum here for now.
Oct Feeders Chart:
Same story here.
Fighting to hold that key level. We really want to see us hold this 61.8% retracement.
Like in live cattle, we are showing some bullish divergence. So we could be due for a bounce here at key support.
Want to Talk?
Our phones are open 24/7 for you guys if you ever need anything or want to discuss your operation.
Jeremey & Office: (806)484-1214
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Email: sfrost@dailymarketminute.com
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WEIGHING GRAINS UPSIDE VS DOWNSIDE POTENTIAL
AUDIO COMMENTARY & CHART VIDEO
Don’t miss future updates or signals
Good moves in row crops today
SoDak tour results less than last year
Tour today is in areas that aren’t as good
Crop conditions dropped in corn & beans
Export demand remains great
Bean oil stocks below expected
US soybeans are cheaper than Brazil soybeans for the first time in a long time
How to utilize options in marketing
Get puts when we are higher not lower
More upside potential vs downside?
Fundamentals are shifting friendlier
Corn situation far different than last year
Soybean China situation is very interesting
Big potential is there for the first time in a while
Should you make sales or not?
Balance upside vs downside with probabilities
A lot of talk about flooding
If you are undersold do what you should do
Don’t do everything in one day
I am staying away from sales for next years crop until I have inputs locked in or if we get to levels that have more downside risk than opportunity
Video chart update below audio*
Listen to today’s audio below
Want to talk?
Office: (806)484-1214
QUICK CHART VIDEO
Here is a quick 5min video where I run through the corn, soybeans, and wheat charts.
If you would rather read, I put together a written version below the video as well.
WRITTEN VERSION:
Nov Soybeans 🌱
We're seeing a picture perfect bounce off that key support and "buy zone" we've been heavily discussing the last few weeks.
Why here?
For starters, this was the 61.8% level down to the lows from June lows. The most common retracement.
That same level was the highs from March. So we were able to turn that old ceiling into our new floor. Just like we saw happen in the past.
On the June sell off, we turned the old November highs into our new lows.
We also had a volume gap lower, meaning if we did not hold this level, we were likely going to drop quiet a bit lower. Meaning it was a sink or swim level with an area of invalidation.
This was also the exact 1 to 1 move from the June sell off.
Meaning this sell off was the exact same size as the one from June. Down to the penny actually.
Now what?
We are approaching some "possible" resistance.
We've now clawed back 50-61.8% of this entire sell off from July.
So this would be a common area to stall, but we do not have to. This will be a big level to watch here short term.
If we break above, the next resistance is going to be those highs.
If we get a pullback, I think it would be viewed as a good opportunity. Perhaps a re-test of that peak volume. I'll have exact levels if we actually get a pullback.
As for a longer term target.
If we are able to break the recent July highs.
I have a target of $13.00 to $13.10.
That $13.10 level is the 161.8% move from the recent lows up to the July highs. A common continuation target.
One last thing to note is that the indicators are friendly.
The MACD is crossing bullish for the first time since those June lows.
This is not a perfect indicator, as none are.
But the last several times we saw a bullish cross did lead to further upside.
Dec Corn 🌽
We are right up against those highs from July.
So this is clearly going to be a big level.
If we are able to break above, then the next target is of course those highs from March and May.
If we get a rejection here, a reasonable spot to get a bounce would be between $4.70 to $4.75. Which would give back 50-61.8% of the recent little rally we've had.
That same area would line up with those April lows and several highs from last year.
There is also a volume shelf that sits there.
I am not saying we have to get a pullback down to there. I am just saying if we get a rejection here, that would be an area that may offer an opportunity if it comes.
As for a big picture target.
I have a target that sits at $5.13 if we are able to break above both the July and May highs.
That's the 161.8% (golden fib) from the recent lows up to the July highs.
That same level is the contract highs.
The MACD crossed bullish for the first time since the June lows. Suggesting momentum is higher.
However, one thing to note is that if we take out these July highs we might have some bearish divergence on the RSI.
As prices could post new highs, while the RSI does not.
So it would not be the worst idea to reward this high time frame resistance if it happens and we post new highs and bearish divergence.
Bearish divergence marked the May highs.
Dec KC Wheat 🌾
We blasted off that volume shelf and launch pad we had been talking about.
We are now up near some possible resistance here and those highs from July.
If we are able to bust through and post new highs, I have a target of $8.40 to $8.50
Which would be the golden fib and the implied move from this cup and handle pattern we have. But for this to be vaild, we of course need to post new highs.
That target is also subject to change, but is my long term target for now.
Dec Chicago 🌾
We bounced right in that golden zone where we wanted to see us find a bottom. Also sitting in a potential cup and handle pattern here as well.
Chicago is at some resistance here.
We've clawed back 50-61.8% of the entire sell off.
This same level is peak volume. So we could struggle here.
However, if we break above, the next resistance is those highs.
Want to Talk?
Our phones are open 24/7 for you guys if you ever need anything or want to discuss your operation.
Jeremey & Office: (806)484-1214
Sebastian: (605)280-1186
Email: sfrost@dailymarketminute.com
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DOES THE USDA CHANGE ANYTHING?
MARKET UPDATE
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Here is extended access to our USDA sale
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: 2:55min
Beans: 10:00min
Wheat: 14:35min
Cattle: 16:10min
Want to talk?
Office: (806)484-1214
Futures Prices Close
Overview
Grains on the weak side following yesterday's strong move with the USDA report. As today corn gave back a good portion of yesterday’s rally, meanwhile soybeans and wheat were just fractionally lower.
Yesterday was Dec corn's strongest day of the entire year. It was actually the first time this contract has ever traded +20 cents higher on a single day.
So being unable to follow up that move is disappointing, but seeing some weakness following the strongest day of the year isn’t a surprise or reason for concern.
USDA
We covered the report in yesterday’s audio, but today we are going to do a deeper dive into what some of this could potentially mean moving forward especially for corn.
Balance Sheet Changes
Corn Balance Sheet:
First I wanted to look at corn.
Here is the balance sheet changes.
Red = Bearish Change
Green = Bullish Change
Yellow = No Change
First off we got that yield drop from 183 to 180.7 bpa.
However, we also saw them bump acres by +1.4 million.
So this led to nearly a wash on the supply side.
Despite that big yield drop, our total production actually increased just slightly by +13 million bushels. Because the extra acres more than offset the yield cut.
So why did the balance sheet get tighter if we actually gained more production?
Well that would be due to demand.
The USDA raised old crop exports by +75 million. As a result, the new crop beginning stocks fell -75 million.
At the same time, they also bumped our new crop exports by +75 million.
So with the +150 in demand, and +13 million in production. The net loss to carryout was -137 million.
This led to our stocks to use ratio falling down to 10.12%.. which we will touch on more here later in today's update.
This number was probably the friendliest item, given acres offset the yield.
Soybean Balance Sheet:
Now soybeans didn’t have all that friendly of a report.
I'd call it mostly neutral.
We saw yield drop from 53 to 52.7 bpa.
But just like in corn, we saw more acres. Those extra acres more than offset the losses in yield.
With total supply increasing by +40 million despite the lower yield.
At the same time, the USDA bumped crush by +30 million.
So we saw a net increase of +10 million to the carryout.
Record Combined Acres
With the extra acres, this would actually be the largest combined corn and soybean acres on record.
It's the largest by around +3 million acres.
Could we see the USDA continue to bump corn acres?
Who knows. Here is the history of corn June to final acres.
Last year we had that anomoly of a miss.
This year would also be the 2nd largest increase.
Today's Main Takeaways
Corn
As we had been talking about the last few weeks, the crop ratings did suggest a below trend yield.
We went over a ton of data suggesting this.
I was skeptical that the USDA would admit it this early, but it was great to see they made the adjustment.
To see yield increase from here, we might need to see those ratings improve from here.
(Below is final ratings vs how yield changed from May)
However they do historically tend to decrease as the year goes on.
The last time today's ratings were better than the final was 2019.
Stocks to Use:
For the last several months, we had been talking about how there were several pathways for the new crop stocks to use to drop into that 10% or lower range.
Yesterday the USDA just dropped our new crop stocks to use from 11% down to nearly 10%.
Which is down a pretty sizeable amount from old crop's 11.68%.
Why is this a big deal?
I've shown this chart a thousand times.
It compares our stocks to use, with our highest price of the year for the front-month contract.
Usually, for us to see front-month corn much above $5.00 we need to see that stocks to use drop below 10%.
So we are not in full blown bull market territory just yet.. but essentially we are knocking on the door of a bullish situation.
Here is a spreadsheet example for every year.
A 10% stocks to use is not associated with $4.50, it's more so associated with corn in that $5.00 range.
But again, to get corn much above $5.00, you usually need to see it drop into that 8% to 9% range.
Here is one of the more interesting parts.
This is where our stocks to use ratio was on the August report over the years.
We are STARTING off a lot tigher than usual.
As we haven’t been this tight in August since 2022.
Here is what it looks like if you compare the August S/U to the Final S/U.
The last several years, the final number was a lot tighter than where it was in August.
The last time we saw the final number looser than the August one was back in 2022/23.
You have years such as 2024/25 that ended up around 10%. But we did not start there in August like we are this year.
So we are starting out in a much tighter situation than we have over the last several years.
Demand is King:
Like we mentioned. We actually have more production now than we did with a 183 yield simply due to the acres.
The bull case largely resides in the demand arguement.
The USDA is probably going to need to raise the old crop exports gain, given how far ahead of pace we are.
The USDA is expecting our new crop demand to be worse than our old crop demand. That doesn’t magically happen on it's own. Most of the time, if you want to justify lower demand we need to see higher prices justify lower demand.
Just for reference, looks look at how the exports for old crop shaped up.
In July last year, they had exports at 2.70 billion.
Yesterday those exports came in at 3.40 billion.
A very large +700 million increase.
Even our old crop carryout is now under 2 billion due to monster demand.
It took a record yield AND record acres to get this number, and we still couldn’t get carryout above 2 billion.
(Bars = Yield & Line = Acres)
Now we have a 1.65 billion carryout that really doesn’t have much room for error.
As long as acres don’t magically increase from here again, any further cut to yield would likely bring that stocks to use below 10%.
Or for example, let's just say exports ultimately come in 100 million bushels higher when it's all said and done, but yield and acres stay where they are. That gives you a sub 10% stocks to use.
Given how tight we are starting, there just isn’t a massive room for error.
Now yes, some would argue that the USDA has plenty of wiggle room to "fudge" the feed and residual number.
Which is true, the number doesn’t make sense, but they've been arguing this for a very long time. The reason they kept it this high could’ve easily been as simple as they overestimated yield last year, so they used the number as a scapegoat.
(179 Yield Scenario)
(+100 Exports Scenario)
Bottom Line:
I think corn has plenty of potential long term as has been my bias for several months.
People can argue about the numbers from the USDA all day long. All I know is that we have the most "potential" we've had in a long time.
That doesn’t mean we "have" to go a lot higher, but the potential is certainly there long term.
Demand led markets don’t happen overnight. It's not the same as a supply driven market. It can take a while to build.
Overall I am remaining patient waiting for the next opportunity.
However, one thing to note is that short term we are heading into harvest. So that adds some caution with potential harvest pressure.
New crop corn is still +50 cents off the lows and sitting at 4-year highs if you’re someone who knows you are going to have to move something off the combine.
There are several ways you can protect yourself or lock in a floor. Call us if you want to discuss your situation.
Office: (806)484-1214
Dec Corn Chart:
Huge day yesterday.
Yes it was disappointing we followed it up with weakness today, but I don’t see any reason to be concerned here. Markets don’t usually go straight up and yesterday was the best day ever for this contract.
The $4.66 to $4.69 level would be a perfectly common spot for us to retrace to before resuming higher.
As that gives back 50% to 61.8% of the recent mini pop. So short term, we'd like to hold there.
We're also sitting right at a bunch of moving averages as well.
We found life after giving back 50% of the entire rally.
That same level was a massive shelf of volume.
So we bounced right where we needed to.
Even if we don’t hold the levels above, the upward structure still remains in tact, and my bias leans higher unless we break below the 61.8% level down to the contract lows at $4.50
I will be going over some upside targets later as we get closer to them.
Soybeans
Weather:
Weather isn’t exactly screaming bullish for soybeans.
We still have plenty of rain in the forecasts.
Here is the precip ranks for August so far.
We've seen a very wet month across the I-states.
So you could argue that the soybean crop does still have potential, especially when compared to corn.
US vs World Story:
Here are some similar charts to the corn stocks to use ratio chart I showed in corn.
This first one is the US carryout vs soybeans highest price of the year.
With the increase to carryout, we are basically right on par with where we were the last two years.
The current US situation right now isn’t considered super bullish, but it's not bearish either.
But given that soybeans are more of a global crop than corn is, with Brazil being the dominant player outside of the US.
The world situation is a better resemblance for soybeans.
Right now, the world situation is the tightest it's been in several years.
Not as tight as 2022, but the tightest since 2023.
This is despite Brazil having record crop after record crop. Yet the world story is getting tighter and tighter.
You can imagine what happens if South America where to have a hiccup.
What if China lives up to their goal?:
I touched on this the other day, but the USDA is only expecting China to buy 16 MMT of our soybeans vs the 25 MMT they agreed to.
This isn’t some offical number on the balance sheets, but you can find it if you throw around some numbers.
The USDA has:
Old Crop Exports: 1,520 million bu (41.4 MMT)
New Crop Exports: 1,660 million bu (45.2 MMT)
Difference: 140 milllion bu (3.8 MMT)
Last year China bought 12 MMT or 440 million bu of soybeans.
This year they agreed to buy 25 MMT or 920 million bu of soybeans.
Which is 13 MMT more than last year or 480 million bushels of soybeans.
Yet.. the USDA only expects soybean exports to be up 3.8 MMT or 140 million bu compared to last year.
Which means they are only expecting China to buy 16 MMT or 590 million bu given that demand to non-China remains the same as last year.
So this tells us that if China buys the full 25 MMT (920 million bu), that would be 9 MMT (330 million bu) more than the USDA's guess of 16 MMT (590 million).
This is a big deal because that 9 MMT (330 million bu) is literally the same size as our entire carryout.
So if China even comes close to fulfilling that goal, we simply do not have the supply to meet that number and China's goal.
If this were to happen, we would need to ration demand lower and incentive less non-China demand.
How do you incentive lower demand? Usually through higher prices.
That would be the potential bull case for soybeans and why we have a lot of potential if China agrees to do what they said they would.
I threw together a chart that might help you visualize the numbers. Hopefully it makes sense.
So simplify all of this, the USDA only has exports up 140 million vs last year. But China agreed to buy 480 million more than last year.
Which is over a 300 million difference.
Crush Demand:
Demand is the story for soybeans.
Look at our crush demand. It's not going anywhere.
What happens if exports improve?
If you add the crush demand plus export demand, it's the best it's ever been.
Meaning the record crush is outpacing the losses in exports.
Resulting in the best domestic demand we've ever seen for soybeans.
Bottom Line:
Weather isn’t bullish, and seasonallly we could run into some harvest pressure that might try to keep a lid on things.
But looking forward, like corn, soybeans still have a ton of potential. Largely led by potential demand.
The US balance sheet isn’t mega bullish, but the world situation is the tightest it's been in years.
We have a South America weather season right around the corner along with the Super El Nino that's going to make the next few months interesting.
Overall, I'm being patient waiting for the next opportunity.
Nov Beans Chart:
We continue to hold key support right where we need to.
If we are going to bounce, this would still be where we would expect it to happen.
Right at this golden zone and those March highs.
However, despite this being where we'd expect a bounce. It is still a must hold level, as if we break below the recent lows, we will likely spark a leg lower towards the bottom of the range from June.
As we still have a gap of volume to the downside. With plenty of air to the downside if we fail to hold the recent lows.
So there is a defined point of risk here.
Another reason why this is a big level is that we perfectly hit the 1:1 move from the June sell off.
Meaning this sell off is the exact same size as the June one.
Again, happening right at those highs from March.
So a very crucial level for soybeans to hold.
Support is expected to hold. But if support gives out, it opens the flood gates lower.
Wheat
The USDA report didn’t have a major impact for wheat. It was pretty much just neutral.
US wheat production is still the lowest ever.
The issues in the Black Sea don’t just make global wheat vanish, but it could certainly impact exports and the flow.
So for now the market seems to have lost interest. Although, I do still think the possible long-term impacts are being somewhat underrated.
Dec KC Wheat Chart:
Nothing has changed.
We are simply chopping around at the bottom of this range and area of high volume.
The structure remains higher as long as we hold the 61.8% level at $6.90
If we break below that key support, I'd start to get concerned. But for now, this is viewed as a healthy pullback and consolidation unless that happens.
We could be possibly setting up for a cup and handle pattern.
Which would be viewed as a bullish set up if it plays out.
The implied move for this pattern takes you up towards that $8.40 to $8.50 range.
Which is also the golden fib from the May sell off.
Meaning it equals 161.8% of the June lows up to the May highs.
So that would be a possible long term target. $8.40 to $8.50
Of course this target does not have to hit. This one seems pretty far away right now.
Targets are simply out there to let you know it's a good area to de-risk if they do.
Targets are also subject to change as the charts play out.
Before we even think about upside targets, we need to hold this support first.
Cattle
Oct Live Chart:
Not great price action in cattle.
There was news about a Tyson Foods in Illinois closing which added pressure.
Something to note is that the last plant closure did mark a bottom in cattle. So I guess we will have to see how the market reacts to the headline tomorrow.
We failed after clawing back 50% of the sell off.
If we fail to hold those recent lows, it does open the door potentially a lot lower.
As if we break below the 61.8% level down to the lows from late last year, it would not be a good sign.
The overall trend in cattle is lower unless we break above the green box. So I still have the mindset of protecting any sort of rally.
Sep Feeders Chart:
We had a nice candle today, closing well off the lows.
Biggest thing to watch is those recent July lows.
If we break below that, it could open the flood gates lower.
As this is clear key support bulls want to hold. Meaning if it breaks, there is a lot of air to the downside.
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HOW BULLISH WAS USDA?
AUDIO COMMENTARY
Markets were higher overnight pre-USDA
USDA drops corn yield to 180.7
Offset loss in yields with higher acres
Production actually higher despite drop
Bumped old crop and new crop exports
The carryout dropped via export demand
Corn stocks to use dropped to 10%
How friendly was the report?
Risk of finding more acres again
Beans have more crop potential vs corn
Watching crop ratings here
We added more supply in this report
Record corn + beans acres
Sep USDA report will be field data
Net carryout increased in beans
Mother Nature been friendlier to beans
We don’t have supply to meet China goal
Don’t want to give away beans off combine
Generic marketing
Want to see some follow through
Demand is not slowing down at all
Why there is a lot of potential
Could we see +$5.00 corn?
Listen to today’s audio below
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BALANCE SHEET CHANGES
(Red highlights a bearish change. Green is a bullish change. Yellow is no change)
New Crop Corn 🌽
Lots of changes happened.
They dropped yield, but at the same time they increased acres.
This actually led to our net production seeing a very slight increase of +13 million. As the acres more than offset the loss in yield.
They then raised old crop exports by +75 million. Which led to our beginning stocks falling by -75 million.
At the same time they raised our new crop exports by +75 million.
Which led to a loss of -150 million to the carryout.
If you take the -150 million loss plus the increase of +13 million from production, our total carryout change was -137 million.
Resulting in our stocks to use dropping from 11% to nearly 10%.
New Crop Beans 🌱
The increase in acres more than offset the loss in yield.
Resulting in our total supply to increase by +39 million.
However they bumped crush demand by +30 million.
So our net carryout increased by +10 million.
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IS YIELD ACTUALLY ABOVE TREND?
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
Yield vs Conditions: 1:45min
Corn Charts: 9:00min
Bean Charts: 11:45min
Wheat Charts: 14:35min
Cattle Charts: 16:10min
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Futures Prices Close
Overview
Very quiet day for corn and soybeans, as both had pretty small ranges today.
Soybeans had an 8 cent range, closing up +3 cents.
Corn had a 5 cent range, closing up +2 cents.
The wheat market took a sizeable hit today despite the ongoing Black Sea disruptions, things over there haven’t resolved but the market just seems disinterested in the story for now.
Cattle was down hard. I didn’t see any specific reasoning behind the weakness aside from cutout being down. Cash traded higher yesterday.
Overall news is pretty light this week. As all of the focus is going to be on the big USDA report next week. As that is going to be our next real catalyst. As the market simply lacks a fresh story for now.
We do continue to see China step in and buy soybeans. As we saw yet another flash sale this morning. As we've sold around 900k MT this week.
Our sales to China for new crop are running at their best pace since 2021/22.
Chart from @GrainStats on X
Right now the markets are just waiting for something to chew on.
As we really don’t have anything new or exciting, and likely won’t until the report.
We had that counter-seasonal rally, but bulls ran out of catalysts and needed to continue being fed going into what is usually a seasonally weak time frame heading into August.
Weather does look like it's still on the favorable side. With plenty of rain in the central to eastern corn belt.
Weather isn’t going to make or break the corn crop here, but is still going to be big when it comes to crop potential for soybeans.
Given that nothing has changed and the market is waiting for the USDA.
Today we are doing a little deeper dive into what these corn crop ratings could mean, along with a bunch of technical charts.
Let's jump right in.
Diving into Conditions vs Yield
Corn crop conditions are at 61% G/E.
How poor is that rating when compared to other years?
Since 2008, this would be the 4th lowest rating.
There are only 3 other years that featured a worst rating.
2012: 23%
2019: 57%
2023: 57%
2026: 61%
2022: 61%
Corn ratings are down -12% from last year.
That is a pretty significant decrease.
This would be the 3rd largest YOY drop in at least the last 20 years for today's date.
The only two years that saw a larger drop were 2012 and 2019.
2012: -39%
2019: -14%
2026: -12%
2021: -10%
2011: -9%
I showed this next set of data earlier this week.
This first chart shows final corn yield vs crop ratings for today's date.
At first glance, you would assume crop ratings really have no correlation when it comes to final yield.
As based on this chart, there really is no correlation.
We've seen plenty of years where crop ratings were worse than the year prior, yet yield actually ended up higher.
Examples of this would be:
2017
2021
2023
But does that first chart really tell the whole story?
Here is another chart I shared earlier this week.
This one shows crop ratings along with how our final yield changed vs the starting point in May.
So rather than comparing how yield changed vs the prior year, it simply compares how yield changed from the start of the year.
I would argue there is a very clear correlation here.
Every year ratings were around 70% or higher, we saw yield come in above trend.
This happened from 2014 to 2018. Then again in 2025 last year.
The only year we saw good ratings this time of year, yet a below trend yield was 2020. Which was due to the late year issues and derechos etc.
On the flip side, every time we have seen crop ratings around 67% or lower, yield has came in below trend.
Which happened from 2019 to 2024.
So take 2023 for example. We had awful ratings that year. Yield was also a record that year. But despite yield being a record, yield came in well below where it started at.
This would be one big reason why I think there is a decent chance yield is not above trend.
Ratings can always change. Maybe the crop sees an improvement from here, and the data ends up favoring a bump in yield later.
However, crop conditions do have a tendency to continue to decrease as the year goes on, rather than improve. That does not mean they cannot improve for a few weeks, but usually they decrease over time.
Over the last 6 years, the only year we saw conditions improve as the year went on was 2023. Given that they started very low in June.
Even in 2023 the ratings then topped in early August before continuing to fall lower.
The USDA is likely going to be moving yield.
They have a history of moving it pretty significantly in this report.
Over the last 23 years, we have never seen then move yield by less than 1 bpa.
The smallest change we saw was 2017's 1.20 bpa decrease.
Over the last 23 years, the USDA has only moved yield by less than 2 bpa three times. Which was 2010, 2017, and 2022.
So we should be expecting some changes next week.
We knows what the USDA is going to do next week.
We all know they have a history of slow playing any massive friendly changes.
So if yield is actually lower, there is always the chance we don’t find out until even January.
If we look at how they changed yield in August vs the crop ratings at the time, there is some interesting data.
Every time ratings were below 65% they did lower yield in the August report. (The only year they did not drop it in August was 2019, as they made the rare yield change in July).
We'll have to wait and see if this matters or not, or if it's simply a coincidence.
However, most of the industry and the market seems to believe we are going to be getting an increase.
StoneX did just put their guess at 184.8 vs the current trendline 183.
If we look at how StoneX has done in the past, here is the data for the last 5 years.
The USDA came in slightly higher than StoneX's guess the last two years. But lower in the 3 years prior.
The final USDA yield has came in below StoneX's guess 4 of the last 5 years. 2023 was the only year it did not.
We'll have to wait and see what the USDA decides to do next week.
Here is the changes from the August yield to the final yield.
It has decreased the last 14 of 20 years. So the final has a tendency to come in lower than August.
Let's just say the USDA bumps yield. As that is a very real possibility.
Then what?
This chart shows how the USDA changed yield in August in yellow.
While also showing how the final yield changed vs August in blue.
Most of the time, if they raise yield in August, the final yield winds up being lower than where they printed it in August.
So anytime that yellow bar was higher, which resembles the USDA raising yield in August.
It was typically followed by a lower blue bar, which resembles the final yield coming in below the August estimate.
There are only two years where the USDA raised yield in August, and the final ended up being higher than the August print.
That was 2009 and 2014.
The other 11 instances final yield came in lower.
So based on all of this data, it's hard to say whether or not the USDA adjusts yield lower next week or not. Most believe they are going to bump it a little higher.
But when it's all said and done, there are plenty of reasons to believe that yield eventually comes down unless crop ratings end up seeing a big improvement.
One last thing to note is acres.
Usually the USDA does not change acres in August, but both of the previous two years have actually saw a large change in acres.
If acres change, it could be just as important as yield.
That's all I got today for fundamentals.
If you want some deeper dives on the fundamentals, check out some of my previous videos.
As we've gone over fundamentals and the short-term risks along with the long-term possibilities plenty of times recently.
Aug 4th Update: Click Here
July 28th Update: Click Here
July 24th Update: Click Here (this one had a lot of charts and reasons for defending the rally)
Now let's get into the charts and key levels we want to be watching.
Charts
Corn
Sep Corn Chart:
We rejected that key zone we had been talking about.
Which was the golden zone from the contract lows up to contract highs. That same area was prior key support and resistance.
That was the area we wanted to de-risk in corn, so remaining patient for now as we enter some key levels we want to hold.
Nothing has changed.
We simply want to hold this $4.30 to $4.37 level.
Which gives back 50% to 61.8% of the entire rally from contract lows.
If we are going to bottom, this would the most common place for it to happen.
If we break below the 61.8% level at $4.30 it will often tell us this is no longer a healthy pullback, and it would open the door to test the contract lows.
This area has also marked two major bottoms in this market.
It was the harvest lows last year, and lows from January.
So it's the golden zone and prior key support.
Meaning we want to see us hold here.
Dec Corn Chart:
We've already given back 50% of the rally.
Like we always talk about, between here and the 61.8% level is where a typical correction will often end.
If you zoom out, this 50% level has been a big level in the past.
It's the bottom of that range from late last year.
The must hold level is the 61.8% level at $4.50
If we break that it would suggest further potential downside.
But until that level breaks, the overall bias leans higher.
Ideally we would like to carve out some lows soon.
Because if we look at the volume, there is a pretty large volume to the downside if we are unable to hold this area of high volume.
When prices enter areas of low volume, they tend to move through them fast.
Areas of high volume act as magnets. Currently we are still at peak volume.
Monthly Chart:
Thought I'd throw this in here today.
Despite the dollar swings from the highs the lows over the last year or two, we have essentially just been trapped in a range from $4.00 to $5.00
Until 2007, we were trapped between $2.00 to $3.00
We then broke out of that range, and the $3.00 ceiling became the new floor.
From 2014 to 2020, we were trapped in a range between $3.00 to $4.00
We've now been trapped in yet another $1.00 range, turning that old $4.00 ceiling into our new floor.
If we ever break above $5.00, we would be out of this range we are currently trapped in.
In doing so, that would be our first higher high of the entire bear market. The fun starts above $5.00
Soybeans
Nov Beans Chart:
We are still sitting at some major support here that we would like to see us hold.
We have given back 61.8% of the entire rally from June.
Again, this is the most common retracement and where the market will often tell us whether this is your standard healthy pullback or the start of something larger.
So if we are going to bounce, this is still where we would expect to see it happen.
But at the same time, it's also a key level we need to hold. As a break below will likely spark further downside.
Let's break down why this is a big spot one chart at a time to help simplify things.
Not only is this the 61.8% level.
We are sitting right at those highs from March and lows from May.
It's been an area of key support and resistance in the past.
So ideally we want to see us turn this old ceiling into our new floor.
Similar to what we saw earlier this year.
When we sold off in March, we found our lows right at those highs from November.
We have also tagged the 100-day MA for three straight days in a row.
Bouncing off of it each time.
This is something the funds and algos are paying attention to.
I have been liking the fact that we've continued to close well off the lows for 3 days in a row.
Lastly let's look at the volume profile.
If we fail to hold here, there is a gap of air to the downside. Back down to that old range from June.
Here is all of that thrown together.
Bottom line, soybeans are at critical support.
Right where we would expect us to bounce. But if you fail to hold key support, it often opens the flood gates lower.
If you are someone who likes to re-own, this would still be a good area to consider doing so. However, again keep in mind that if we lose this level it opens the door lower.
But being at key support gives you a defined risk level.
One last reason why a bottom may make sense here is that this current sell off is the 1 to 1 move from the May sell off.
Right now, this sell off is the exact same size as the one from May.
Those two arrows are the same size.
This was a similar reasoning to why we liked defending corn near the recent highs.
The rally was the same exact size as the entire rally from Jan to May.
Weekly Chart:
There are zero things bearish about the soybean chart when you zoom out.
The long term structure of this chart looks very friendly.
In 2024 we bottomed right at those highs from the trade war.
We now have a series of higher highs and higher lows after breaking out of that year long range we had been trapped in.
We rejected that high time frame resistance two weeks ago.
Which was the highs from 2024 and lows from 2023.
That's going to obviously be a big level.
If you ever break above that level.. things get very interesting.
Wheat
Sep KC Wheat Chart:
We tapped that golden zone today.
As we have now given back exactly 50% of the entire rally from June.
I am not concerned about wheat unless we break below the 61.8% level which sits at $6.74
That same level is the highs from March and lows from May.
If you fail to hold this golden zone, it opens the door down the those recent June lows.
That same area is also the golden zone from the contract highs down to the contract lows.
Sep Chicago Wheat Chart:
Here is another reason to think the wheat market could be close to a bottom.
Chicago wheat gave back exactly 61.8% of the entire rally today.
This spot has been prior support and resistance.
If we are going to bounce, we would like to see it happen here or it could open the door lower.
Similar to soybeans, this is where a bounce would make sense, but it's also a level where we need to hold.
Weekly KC:
Like in soybeans, there is nothing bearish about the chart when you zoom out.
We printed our first higher highs of the entire bear market.
We rejected some high time frame resistance.
As on the weekly time frame, we failed to break that big $7.45 to $7.50 level.
That was the highs from May. It was the highs from 2024. The lows from 2023. The lows from 2022. And the highs from 2021.
So that's clearly the major hurdle needed to break to reach some of those 2022 to 2023 type of prices.
Cattle
Oct Live Chart:
Nasty day in cattle.
Live cattle clawed back exactly 50% of the sell off before rejecting.
Between there and the 61.8% level is going to be a common area to fail if this is simply just a relief bounce.
So that's still the area to defend like we've been mentioning.
To the downside, still need to hold those recent lows or it could open the door a lot lower.
Weekly Chart:
This chart respects support and resistance levels constantly. Always turning prior support into new resistance (and vice versa).
Right now we are rejecting off those highs lows from March.
If we break the recent lows, it could very easily open up further downside towards those lows from last November.
Sep Feeders Chart:
We did not quiet make it into the golden zone like we did in live cattle.
If we get up there, that's still an area to protect and an area we'd expect us to potentially struggle.
Overall just want to continue to see us hold this key support level and those recent lows.
If we fail to do that, there is a ton of air to the downside.
Want to Talk?
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GRAINS GREEN DESPITE CRUDE DOWN HARD
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AUDIO COMMENTARY
Strong day in the grains despite crude
Cattle well off the highs
Crude getting hit with war headlines
Grains gapped lower but reversed higher
Outside up day in corn
Grains holding the golden zones
Why the reversal today?
Salty exports & technical buying
Corn conditions dropped -2% again
Conditions not even close to last year
Demand is not slowing down
Should you look to re-own?
China keeps buying soybeans
Russia headlines continue
Weather isn’t as bullish as it was
Negative news but traded higher
USDA report on the 12th
StoneX estimates out this week
Funds longest since 2012
Get protection if you have to move stuff
Bean re-ownership idea below audio*
Chart breakdowns below audio*
Listen to today’s audio below
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CHARTS
Nov Beans 🌱
We perfectly held that golden zone right where we wanted to see us do so.
Not only does this level give back 61.8% of the entire rally from June. It’s also the highs from March and an area of high volume.
If we are going to bounce, this is where we would want to see it happen and where it would make sense to see it happen.
As if we break below this level it opens the door lower and tells us this may not just be your normal correction before resuming the uptrend.
So this is a very key level. My bias remains higher unless that level breaks. If that level breaks, we could expect further downside.
Reownership Strategy
Disclaimer: there is risk of loss trading futures and options. Past performance does not necessarily indicate future results. This is our opinion and should be treated as such.
We did not issue a full blown buy alert today.
However, since we are at key support, this would be an area we like considering to re-own.
Here is a possible strategy you could consider:
Buy $12.00 call
Sell $13.00 call
Sell $11.70 put
This trade is roughly a zero cost trade, but does require margin.
What it does:
You make money from $12.00 to $13.00.
With $13.00 being the max upside.
If we drop to $11.70 you would re-own via futures.
If you have any questions or want to talk through your specific situation please feel free to give us a call or a text anytime.
Office: (806)484-1214
Sep Corn 🌽
We failed in the golden zone from the contract lows up to the contract highs. (blue box).
We’ve now given back half the rally. We tagged that 50% retracement down to the lows before bouncing.
We posted an outside up day today which is a good sign. As we broke below Friday’s lows before rallying and closing above Friday’s highs.
Overall bulls need to hold this golden zone. The golden zone is where we want to see a bottom. (green box).
Not only is this the golden zone. But it was where this market bottomed twice in the past. So it’s also key support.
So we absolutely need to hold the 61.8% level at $4.30. If we break that level it would favor downside continuation.
Dec Corn 🌽
Same exact set up here.
We posted an outside up day.
We tagged the 50% retracement before bouncing.
This zone is a must hold area and where we would expect to see a bounce.
If we break below $4.51 and the 61.8% level it would tell us this is no longer a simple correction before resuming the uptrend. It would instead favor more downside.
Sep Chicago Wheat 🌾
We are sitting right in the golden zone.
Not only is this the golden zone, but it’s some very key prior support as well as resistance.
It was the highs from early spring. It was the lows from May. It was the highs from mid-June.
So if we were going to bounce, this would be a spot where it would make sense to see it happen.
On the flip side, if we lose the 61.8% level it would favor more downside.
Sep KC Wheat 🌾
We didn’t quiet make it into the golden zone like we did in Chicago.
However, in a strong market the 38.2% to 50% levels can be more common.
But overall bulls simple want to hold that 61.8% level. Which is also those highs from early spring and lows from May.
The bias remains higher unless we break below that level.
Want to Talk?
Our phones are open 24/7 for you guys if you ever need anything or want to discuss your operation.
Jeremey & Office: (806)484-1214
Sebastian: (605)280-1186
Email: sfrost@dailymarketminute.com
Hedge Account
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WEATHER & CHINA RALLY GRAINS
AUDIO COMMENTARY
Massive day for grains
Weather and China spark some life
Too much rain in some spots
Forecasts calling for hot and dry
Tariffs dropped makes us more competitive
More details on soybean signal
How to utilize floors & protect rallies
Funds still short corn & wheat
Some guys getting robbed on basis
Puts are one of the best tools right now
Euro crop continues to get worse
Realize the risks & the bullish cards
Be prepared to do something
Soybean & corn charts below*
Want to talk?
Office: (806)484-1214
Your free trial has ended
Don’t miss future updates or signals
Here is our 4th of July sale in case you missed it
CHARTS
Aug Soybeans 🌱
Soybeans up around 75 cents since last week.
We were trapped in a tight range at that volume shelf we had been talking about for a while. With prices coiling and waiting for a direction.
Today we got the breakout and sliced right through the volume gap to the upside. Like we had talked about last week, prices tend to move through volume gaps fast because there is no resistance.
We have now rallied right into an area of high volume. The same range we were trapped in for weeks back in the spring.
This same level claws back 61.8% of the entire sell off. The most common retracement level.
Prices do not have to stop here. We’re in a weather market. But taking a pure technical approach, this would be a potential area where prices could stall. Given the volume and retracement level. Hence today’s alert.
If we take out this range and area of high volume, it opens the door to challenge the highs.
Like we talked about last week, the indicators were suggesting some friendly signs.
As we had bullish divergence on the RSI. (No current divergence right now).
Meanwhile the MACD crossed bullish. Each of the last three times this happened, a rally followed.
Nov Soybeans 🌱
We broke that area of massive volume, which left very little resistance to the upside.
We’ve now clawed back 78.6% of the entire sell off.
Also sitting at the next area of high volume.
(Last signal was at $12.09: Click Here to View)
Sep Corn 🌽
We finally broke through some resistance.
We’ve clawed back 38.2% of the sell off. Which is the first retracement level.
If we can manage to break above this fib level, we want to reward a move towards $4.49 which is the 50% level and 10 cents away.
That is also the next area of major volume if we break above this current level. It was also previous support from last fall.
Dec Corn 🌽
Similar set up here.
We’ve clawed back 38.2% of the entire sell-off.
If we can break above this level, we want to look to defend a move towards $4.65, which reclaims 50% of the entire sell-off. That same area has also provided resistance in the past.
Like in soybeans, the indicators had been giving some positive signs last week that we talked about.
As we had bullish divergence on the RSI. This happens when prices make new lows, but the RSI does not. Currently, there is no divergence. As prices broke higher, so did the RSI.
Along with the MACD crossing bullish for the first time since April.
Want to Talk?
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SOYBEAN SELL SIGNAL & HEDGE ALERT
NEW CROP & OLD CROP BEANS
Get every signal & daily update
We feel like this is a good spot to play some catch up in soybeans. Whether that’s some downside protection or an incremental sale.
Soybeans are around +70 cents off the recent lows from last week.
Since this is a weather market, the rally doesn’t have to stop here. So there are a couple ways to play it:
Put protection
A sell stop (a sell stop is an order to sell if the market drops to X level. If the rally continues, you can raise the stop higher)
Incremental sale
If you have courage calls right now, it should make it easier to make a sale now
If you have questions, feel free to reach out.
Office: (806)484-1214
Charts & Reason for Signal
Aug Beans 🌱
We broke that resistance and ran right through that volume gap we had been talking about.
We are now testing an area of high volume after running through the area of low volume.
We’ve also clawed back 61% of the sell off. A common retracement level for rallies to pause.
This same area is that old range we were trapped in for several weeks back in the spring.
Again, since this is a weather market, we could continue to rally. But looking at the charts, this would be a possible area where we could struggle.
Nov Beans 🌱
We broke that resistance and an area of high volume.
We’ve now clawed back 78.6% off the sell off.
Sitting at some of the highest levels we’ve seen all year after just seeing a -90 cent drawdown.
Want to Talk?
Our phones are open 24/7 for you guys if you ever need anything or want to discuss your operation.
Jeremey & Office: (806)484-1214
Sebastian: (605)280-1186
Email: sfrost@dailymarketminute.com
Hedge Account
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FACTORS & UNKNOWNS IN GRAINS
AUDIO COMMENTARY
Cattle been pretty sideways for months
Be comfortable with cattle downside risk
Factors influencing grains moving forward
Unknown sides of demand
China is the biggest unknown
Why there is big potential upside & downside
New yearly highs in new crop
Soybeans nearing November highs
Corn holding up despite first notice day
Should you have new crop priced?
How spreads work in different markets
Chance for $5 new crop corn?
Wheat at potential support (chart below)*
Listen to todays audio below
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Sebastian: (605)280-1186
KC WHEAT CHART
May KC 🌾
Failed the target box.
Now coming down to test the old point of the breakout like we discussed.
Sitting at some potential support here.
This was our old resistance on a few occasions. Now viewed as support. Bulls would like to see us hold here.
Failure to hold wouldn’t look great short term.
Past Sell or Protection Signals
Feb 19th: 🌾
KC wheat sell signal & hedge alert.
Feb 6th: 🌽 🌱
Corn & soybean sell signal & hedge alert.
Feb 4th: 🌱
Soybean sell signal & hedge alert.
Dec 11th: 🐮
Cattle sell signal & hedge alert.
Dec 5th: 🐮
Cattle sell signal & hedge alert.
Nov 17th: 🌱
Soybean sell signal & hedge alert.
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?
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TRUMP SAYS CHINA WILL BUY MORE BEANS
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:
Trump, China & Beans: 0:00min
Corn: 8:00min
Beans: 11:20min
Wheat: 12:00min
Cattle: 13:50min
Want to talk about your situation?
(605)250-3863
Futures Prices Close
Overview
Wild day for the soybean market.
The market was slightly lower, than out of nowhere we rallied a massive +50 cents in just 20 minutes.
Why?
All because of one tweet from Trump.
He had a call with China. He essentially said that they discussed China bumping their soybean purchase agreement from 12 million metric tons to 20 million metric tons.
While at the same time reiterating that they are committed to fulfilling that 25 million goal for next season.
Soybean Sell Signal
This morning, we did issue our first soybean sell signal and hedge alert since November 17th, following the news.
Link to Signal
What was our reasoning behind this signal?
The main reason was simply based on the charts, as 90% of our signals are.
If we look at March soybeans, we alerted the signal because we hit the golden zone.
They ran right into that golden zone before ultimately falling well off their highs.
(The golden zone is when we reclaim 50-61.8% of a sell off. It is the most common spot for a bounce to fail).
What about November soybeans?
They too hit the golden zone retracement and 61.8% level up to those November highs.
Why the Golden Zone?
You hear me talk about this all the time.
Why does this zone tend to be so important?
It is the most common spot for a bounce to fail.
Not all the time.. but it is very common.
There are several instances of this over the years.
Let's go over a few of them.
March-26 Corn: Last November
Here is the most recent example of this zone and where it marked a significant high in a market.
In this case, that same level also happened to be old support. Which we've talked about several times since harvest.
We clawed back 50-61.8% of the highs from February before failing.
July-25 Corn: Last April
We had that brutal sell off after posting those February highs.
We then received a dead cat bounce.
It failed at the golden zone.
July-25 Corn: Last February
From the contract lows, that rally going into February reclaimed 50% of the contract highs.
This level lined up with prior support and resistance.
When the golden zone lines up with old points of support and or resistance, it helps narrow down the target even further.
Sep-23 Corn: Summer of 2023
Remeber that weather scare in 2023 that rallied corn +$1.30 in just a month.
That rally failed after clawing back 61.8% of the contract highs.
Jan-25 Beans: Last November
This was the reason for that sell signal back in November.
We went on that China driven rally before topping out after taking back 61.8% of the contract highs.
This doesn’t mean soybeans definitely topped today.
The point is that it just simply makes sense to take risk off the table in the area where it historically makes the most sense to do so.
Does Trump & China News Change Anything?
Here is a visual of China's purchases of US soybeans.
This chart includes their past purchases over the years.
It also includes their old agreement, along with the "rumored" new agreement.
12 million metric tons = 441 million bu
20 million metric tons = 735 million bu
Difference = 294 million bu
That is a pretty massive increase.
For reference, the entire US soybean carryout is 350 million bushels.
Seems pretty bullish when you think about it that way.
As the US doesn’t have an extra 300 million bushels to export.
We'd literally run out of beans.
But it's not quiet that black and white as there are a lot of moving parts.
However, we still felt that it made sense to reward that size of a move.
As the action could've very well been algo buying on the headline, and we weren’t sure if this market would see any follow through or not.
After all, Trump did only say they are "considering" bumping their purchases.
If that word changes from "considering" to "confirmed" it would be very bullish.
If it is true and China follows through, this is exactly what soybean bulls might’ve needed.
We had been talking about the impact China buying would have for a while. If they continue to buy US soybeans, the market will take notice.
If they back off their purchases like they historically do here, given that Brazil has a monster crop coming around the corner and their soybeans are cheaper than ours, then soybeans will struggle to find a reason to go higher.
Who knows how the political chess match will turn out.
If China wants to continue buying, there is no reason we can’t go higher.
The US balance sheet does NOT have room for an extra 294 million bushels of demand. That is almost the entire carryout.
If China were to buy that amount, prices would probably have to go higher to ration demand.
Because we would need to push away our business from non-China destinations and hand it off to Brazil.
There is even talk that the US could end up having to import Brazil soybeans.
Brazil's beans are more way cheaper than ours.
So China's commercial crushers don’t have an incentive to buy at all. It just doesn’t make any sense for them to buy.
Which means the buying might have to come from their government reserve, not normal commerical demand.
If it is the government buying instead of the commercials, we could see basis and spreads do a lot of the work.
If their government is buying, it could result in the US balance sheet getting tighter, but the world balance sheet remaining the same.
Because those soybeans aren’t going to vanish into thin air. They have to go somewhere.
There is also simply some logistical question marks.
Does China even have room for an extra 300 million bushels of soybeans?
They probably don’t, and that original 12 million already has deliveries scheduled from February to August.
So for China to actually buy this amount of soybeans they might have to do something awkward. Such as buy the soybeans, then auction them into crush to help make room.
There are so many different ways it could go.
It sounds hard, but not impossible.
Like we've talked about before, soybeans could very well just be a small peace offering in the grand scheme of things for the trade war.
Something to keep in mind is that China probably won’t come in and buy these soybeans right now. They are going to be busy with Brazi's crop. We also have the Chinese new year coming up soon.
Regardless, it made sense to defend the rally in some sort of manner at a key spot on the charts.
This market sold off what felt like every day for the last 3 months.
We clawed back nearly 2/3rd's of that sell-off in 20 minutes. Not a move we want to completely ignore.
This could definitely change the tide moving forward this year.
Who knows if today's rally will simply be a one day thing or not, or the start of a bigger rally like in October.
But we still have to keep in mind that Brazil's harvest could start to add some pressure to this market.
Seasonally, soybeans do tend to struggle from the middle of February until April due to their harvest.
Similar to how the corn market finds life after getting through the harvest pressure here in the US.
Soybeans tend to do the same when it comes to the Brazil crop.
Given that Brazil is by far the dominant player now.
But if China does step up now rather than later, it could very well change things. However, there is some reasons to doubt it happens right away.
Today's Main Takeaways
Corn
Fundamentals:
Not much fresh news on corn today.
We are still essentially range bound.
We have record demand keeping a floor under us.
We have record supply keeping a lid on us.
Demand is as great as it's ever been, but we definitely aren’t short on corn here.
We have two completely different stories when it comes to the US vs the world for.
Here is the world stocks to use overlayed on top of the US stocks to use.
The world is the tightest in over a decade.
The US is far from being bullish.
We've talked about this several times before, but essentially, this just means the US has to perform. As the rest of the world couldn’t afford it.
One sub-par US crop would flip the corn story right around in a heart beat.
Yield has been a record for 3 straight years.
The first time we've seen a record yield 3 years in a row in around 50 years.
Can we go for 4 in a row or not?
The current situation is not overly friendly corn at all. But I don’t see a reason for us to collapse either.
It very well could take a weather scare to get a major opportunity.
Something we haven’t seen since 2023.
I've shown this chart in my last few updates. This is when corn has posted it's highs for the year since 2004.
We "almost" always get an opportunity in the spring or summer.
Which is typically off the back of a weather scare.
The last 2 years were in a realm of their own.
Sure, it could happen 3 years in a row. But up until 2024 we had only posted our highs for the year before April one single time.
That was in 2013 when we were already on a downfall coming off the record 2012 levels.
So history does favor an opportunity.
Short term, we still need to be cautious of first notice day.
We've traded lower the last two weeks of February 8 of the last 11 years heading into first notice day.
Overall it's hard to get super bullish on corn here unless we see a weather scare that threatens supply. For now our upside does feel limited.
The market is going to lack fresh data until we get into the acre talk and planting intentions.
We have that USDA report next week, but the only thing the USDA will play with is the demand side.
You could very well argue that they are too light on their export projections.
We've created a demand monster in corn.
What happens if the US underperforms?
If the USDA is right, the US will absolutely need another big crop to keep up with demand.
Something to keep in mind this growing season.
Technicals:
March Corn
I still want to reward a move towards $4.36 to $4.37
It's 50% of the November highs and old key support.
The fall rally failed at 50% of the February highs and key support from last spring.
Same set up. Smaller scale.
We are finding life right at the golden zone retracement of this entire bounce.
This is where the market decides if the bounce is over, or if it's time to continue higher.
Holding this level is key to keeping our bias remaining higher.
It's the most common spot for a correction to end, so bouncing here would make perfect sense.
Soybeans
Fundamentals:
We covered soybeans earlier, so let's just take a quick look at the March chart.
Technicals:
March Beans
Monday we bounced right after giving back 61.8% of this entire rally.
The exact level we needed to hold.
Today we then rallied and clawed back into the golden zone retracement of the entire sell off from November.
A very common level for a bounce to fail. Hence why we issued the sell alert this morning.
We closed -22 cents off the highs today. So not the best looking candle here short term.
Tomorrow's price action will be interesting and give us some further confirmation if the rally is over for now or not.
Wheat
Fundamentals:
The US wheat situation is far from bullish.
The world situation is on the rise for the first time in a few years as well.
But that does not mean the wheat market cannot provide an opportunity.
The funds are still incredibly short like usual. They haven’t been long since 2022.
Since the US and world stories are not super friendly, the wheat market will need to see some sort of supply scare somewhere in the world.
Which we have been seeing a little bit of with the US and Ukraine both experiencing brutal cold snaps recently.
We now have Russia getting awfully cold as well.
But it doesn’t appear like we've seen anything material that is going to result in a massive rally just yet.
For the wheat market to continue higher, it will likely take a supply scare.
The thing about supply scare rallies is that they don’t typically last very long. However, they can run far in a short amount of time.
Technicals:
March KC
Sitting right at the 61.8% retracement of the last bounce.
Must hold spot here short term to keep the immeditate bias remaining higher.
If we are going to bounce, it needs to be here.
Otherwise, we likely fall back into the old range.
March Chicago
The recent rally failed at the 61.8% retracement up to the Nov highs.
Break above that level and it should result in further upside.
To the downside, like KC, we are at a critical spot. The golden zone retracement levels.
Need to bounce here to prevent us from going back to the old range.
Cattle
Fundamentals:
Not a lot on cattle today.
The market clearly found Friday's report to be bullish and reaffirmed the fundamental situation is as tight as ever. The tight situation isn’t something that can be fixed overnight.
This market could easily challenge the highs, but it might take some additional news for this market to go and post some crazy new highs.
There is still definitely headline risk in this market, which can happen at any time.
If you're the funds, you took a pretty big hit back in October because of one Trump tweet. What would make you want to again get overly long in this market?
The biggest headline risk has to be screwworm.
If screwworm enters the US, I am sure the algos will take the headline and run.
Despite cattle still having potential given the tight fundamentals, it still just makes sense to defend these levels given all of the headline risk.
Technicals:
April Live
We left a gravestone doji candle today.
That can often can be considered a potential reversal candle.
Still showing some bearish RSI divergence.
March Feeders
Nearly filled the gap.
Also still showing very clear bearish divergence on the RSI.
Which is typically a sign upside momentum is starting to get weaker.
Past Sell or Protection Signals
Feb 4th: 🌱
Soybean sell signal & hedge alert.
Dec 11th: 🐮
Cattle sell signal & hedge alert.
Dec 5th: 🐮
Cattle sell signal & hedge alert.
Nov 17th: 🌱
Soybean sell signal & hedge alert.
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.
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.
NEXT MARKET MOVER FOR GRAINS?
AUDIO COMMENTARY
Trump cancels EU tariffs
Want to protect cattle
Risk of screwworm in U.S.
Biggest supply ever & best demand ever for the corn market
One weather scare away from story in corn
No fundamental story saying corn has to go a lot higher today
If you’re going to have to market corn soon
We won’t see any major data until planting intentions
China bought the amount of soybeans what agreed to buy. Are they done?
Soybean oil rally leading beans
Slight weather story in Argy?
There isn’t much fundamentally screaming that we have to go higher
Don’t supply the market until it pays you
Cold weather story in wheat?
Usually no material damage in winter kill
Often buy rumor sell fact on winter kill
Staying patient for now for most
Stories not as friendly as they could’ve been
Only selling new crop if you lock in profit
Listen to today’s audio below
Want to talk? (605)250-3863
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CORN CHART
March Corn 🌽
Plan is still the same for corn.
Still looking to reward a move towards $4.33 to $4.36 if it comes.
It’s the golden zone retracement of the entire USDA sell off.
It’s also our old support from the last several months.
The rally ended after hitting the golden zone retracement up to the Feb highs. That same level was key support from spring. Hence why it was our first target to take risk off the table this fall.
We’ll go over the rest of the markets tomorrow.
Past Sell or Protection Signals
Dec 11th: 🐮
Cattle sell signal & hedge alert.
Dec 5th: 🐮
Cattle sell signal & hedge alert.
Nov 17th: 🌱
Soybean sell signal & hedge alert.
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.
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.
DEEP DIVE INTO USDA: HOW BEARISH FOR CORN?
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: 0:40min
Beans: 10:00min
Wheat: 13:10min
Cattle: 15:10min
Want to talk about your situation?
(605)250-3863
Futures Prices Close
Overview
Grains lower while cattle continues to run.
Yesterday's report was a memorbale one, and not in a good way.
It was bearish across the board. Production came in higher than estimates everywhere, and wheat plantings even came in higher than expected.
It caught almost everyone off guard.
It was the most bearish report in over a decade for the corn market.
Yesterday corn saw it's largest daily loss since June 2023.
In one single candle, we wiped out the past 150 days of price action.
Let's jump right into the corn section and go through this report and what it means moving forward.
Today's Main Takeaways
Corn
Fundamentals:
Well, I didn’t have yesterday's USDA numbers on my bingo card.
Here are the complete balance sheet changes.
This report was about worst case possible for the corn market.
It was actually the most bearish report in 14 years.
Here is the past price changes.
It resulted in the biggest sell off for the day of this report since 2012.
Here is the past carryout changes for this report.
Yesterday was the biggest increase to carryout we've seen in this report in over a decade.
They increased carryout by nearly +200 million bushels.
We've only seen one other year that resulted in over a +50 million bushel increase.
Clearly, this report is in a world of it's own the last decade.
As you all know, the USDA chose to actually raise yield up to 186.5 bpa.
Almost everyone thought yield would be coming down, some thought it could be a rather drastic change.
Even Arlan of StoneX who had this 186 guess back during the summer, recently said he thought yield was 182 and wouldn’t be surprised if it was even lower.
So everyone was surprised.
Here is a chart showing May vs final yield.
For the first time since 2018, our final yield came in higher than the orginal May estimate.
186.5 vs the orginal 181 (+5.5 bpa).
Not only did the USDA raise yield.. they also added acres.
Planted acres only rose 100k, but harvested acres jumped a large 1.3 million...
This was an even larger surprise than the yield.
And it's a more bearish factor than the yield.
Just to put it into perspective:
That 1.3 million acres added an EXTRA 236 million bushels of supply to the balance sheet.
The 0.5 bpa increase to yield only rose supply by 46 million bushels.
Not only did yield increase, but they found more acres which provided an even bigger blow.
The numbers the USDA gives us are the numbers we have to deal with.
Yes it sucks. But none of us can do anything about it whether we agree with their methodology or not.
Regardless, it is getting harder and harder to defend them when they've been incredibly inconsistent with their data the last year or two.
It's no secret that the USDA is understaffed, so you have to wonder if that is starting to show in their work.
Here is a fantastic chart from Karen Braun of Zaner Hedge.
This shows corn planted area from June to final.
A completely unprecedented miss.
This has still yet to be explained.
Since the USDA added so much supply, they naturally had to balance the balance sheet to prevent our carryout from getting too large.
What they did was raise feed and residual by another +100 million bushels.
While leaving our export demand completely unchanged.
Almost everyone would agree this just makes no sense.
Most agree feed usage is too high to begin with.
What argument would justify feed demand being +700 million higher than last year when we have fewer animals on feed?
We have never seen this type of increase before.
The USDA is using this as a toy number so they can hide other data in there. Next year we are going to be wondering why they dropped the feed usage number.
Now on the other hand, they chose to leave exports unchanged..
Meanwhile export inspections are up +61% vs last year.
Yet the USDA projections exports only up +13% vs last year.
We are currently on pace to beat the USDA's estimate by over 300 million bushels.
So a bump in exports would’ve made sense. Rather than a bump in feed.
I'm sure exports will eventually be raised higher.
The numbers yesterday don’t make sense, but they are the numbers we got.
This report does change things it a big way.
For a long time I’ve been talking about how corn had limited upside, and it would be an uphill battle to see $5.00 this year.
Given that we had record production no matter how you sliced the pie.
That battle just a whole lot harder, some would say almost impossible without some sort of outside influence such as a weather scare.
First for the stocks to use ratio.
It jumped from 12.46% to 13.61%.
That is a bearish number. The most bearish since 2019/20.
(Red dot is previous estimate)
Here is a good way to visualize the stocks to use and it's impact on prices.
This chart shows our stocks to use in yellow.
Along with corn's highest price for the year in green.
I drew two lines on this chart.
One at 10% and one at 12.5%.
To get prices beyond $5.00, it almost always takes a stocks to use 10% or lower.
If you focus on that bottom line, anytime the stocks dips below 10% (yellow), the prices jump above $5.00 (green).
Now let's focus on the top line.
Anytime our stocks to use (yellow) is above 12.5%, our prices (green) tend to top out under $5.00 and result in a bear market.
Here is another way to look at it.
By splitting up the bull markets and the bear markets.
If our stocks to use stays this high, it is about on par with the last bear market.
Here is a visual of our carryout.
It's now sitting at a pretty massive 2.23 billion bushels.
Which is the largest in the last few years.
We went from a not "overly bearish" situation if yield would’ve fallen down to 182 for example, to a clearly bearish situation.
To eat into that carryout, we'd have to see one of two things happen.
Demand continues to eat into it, or we get a weather scare.
The problem is that since the USDA once again upped feed usage, they more than have the ability to lower it in the future. So it seems like it'll be pretty difficult to get a carryout below 2 billion for now.
If we want corn to have a real story, we will need less acres this spring, a weather scare, or some other outside factor.
Until then, we will want to be rewarding any opportunity or rally that comes. As the fundamentals suggest sizeable rallies should be sold.
The report was indeed a game changer and answered questions about what corn's potential truly is from here.
I am not saying corn can’t go higher and we won't get an opportunity. Even bear markets provide opportunities. But it could very well be a struggle for corn here the next few months maybe even until planting.
We want to be prepared for when they do this year.
We had been tracking this pattern between March-25 and March-26 corn for the last several months.
Up until yesterday, were still tracking almost identically.
Those similarities ended yesterday.
Last year, the USDA dropped carryout by -198 million.
Yesterday, the USDA raised carryout by +198 million.
They did the exact opposite as last year, and the market got the exact opposite reaction.
Technicals:
March Corn
We originally had that sell signal at $4.50.
As it was key resistance and our first target.
In hindsight, yes, I wish we had been more aggressive.
That $4.50 was the level we needed to break through to get the next leg higher and we just didn’t get that.
Those numbers were about the only thing the USDA could’ve printed to get THAT bearish of a reaction.
I am not going to personally try to catch a falling knife here.
Today's candle did provide some optimism.
But we are essentially at our last line of defense before those contract lows.
Which is the 78.6% retracement down to contract lows.
If we take out this level, contract lows is the next point of interest.
Where to de-risk:
We will get a dead cat bounce at some point whether we go lower from here first or not.
We will want to be looking to reward any relief bounce that claws back 50-61.8% of this sell off.
If we move lower, then this target box changes.
Currently, that golden zone aligns with our old support.
Targets do not have to hit. They are just there to let you know to de-risk if they do.
Soybeans
Fundamentals:
Corn's overly bearish report stole the show.
But the report for soybeans was also pretty bearish.
Not only are soybeans dealing with a bearish USDA, but we are once again dealing with trade conflicts. Which is probably part of the reason why we struggled today.
Trump announced he would be imposing 25% tariffs on any country that trades with Iran.
China is Iran's #1 trading partner.
The Supreme Court rules on Trump's tariffs tomorrow.
Odd makers say there is a 73% chance they rule them illegal.
We will have to see if the soybean market reacts to the ruling.
The soybean situation does suck, given that there was so much potential for soybeans to have a really bullish situation.
The potential was definitely there.
But trade conflicts ruined that.
Our exports are estimated to be 104 million bushels below what they were in 2019/20.
The US situation would be very tight if exports would’ve been fine.
We are crushing more than ever.
Crush demand is as strong as it's ever been.
So imagine if exports weren’t awful.
Even if we had the same exports as the last trade war, you'd be taking off an extra 100 million bushels of supply on the balance sheet.
With a carryout of 350 million, that is a big swing.
Here is the balance sheet changes from the report.
Yield unchanged.
Exports dropped -60 million.
Crush increased by +15 million.
They found an extra 100k acres.
The increase in crush was offset by the increase in acres.
Resulting in carryout jumping by +60 million from 290 to 350 million.
You can’t really argue against their decision to cut exports.
I think that is totally justifiable.
Export demand is so far behind pace and we are well past our prime shipping window.
We're down -43% vs last year.
To add on to that, Brazil has a record crop that's about to come online.
They haven’t seen any weather issues.
Which makes it that much harder for soybean exports.
This was the 5th time in the last 12 years where yield didn’t come down in this report.
Like corn, this report was one of the most bearish in the last decade.
It featured our largest increase to carryout in over a decade.
Almost double the next largest one.
Technicals:
March Beans
The chart doesn’t too great here.
We failed to bust above that 61.8% retracement up to those Christmas highs. Which was the level we need to break to spark further upside.
We now broke that trendline support from contract lows.
We are now sitting right at those lows from new years.
If we fail to hold that level, it could easily open the door another -20 cents lower.
As the next point of interest is going to be the 78.6% level down to contract lows.
Still looking to reward a sizeable relief bounce if it comes.
Wheat
Wheat was trying to breakout before the report but ultimately failed. The data certainly didn’t help, but I'd imagine the collapse in corn spilled over to the wheat market.
There wasn’t a ton of adjustments for wheat in the report.
Wheat had the least bearish report, but like corn and soybeans couldn’t escape the bearish surprises.
Carryout surprised a little high.
Winter wheat plantings were down about -1% vs last year.
But came in higher than the trade was anticipating.
Most feel like this number could work itself lower given that prices are far from appealing.
You could argue that we see some downward revisions come March.
Outside of that, the wheat story still lacks a catalyst and the situation is still far from being bullish.
We have plenty of supply in the US.
The stocks to use increased once again.
(Red dot is previous month)
We also still have plenty of supply globally.
Without a major global player having any supply or weather issues, it just makes it hard for the wheat market to catch a real bid.
There will be a concern somewhere eventually, but for now there just isn’t.
Still remaining as patient as I can in wheat.
We don’t have a reason to get overly bullish. But at the same time, it's hard to justify being bearish at $5.00 wheat.
Seasonally, the wheat market tends to get it's biggest opportunity of the year during the spring.
Chicago Seasonal
KC Seasonal
Technicals:
March KC
We failed right at that 61.8% retracement up to those Nov highs once again.
We also failed to break trendline resistance.
That $5.35 level is still the clear level bulls need to break to get a leg higher.
In the meantime, we've now given back 61.8% of yesterday's highs down to those Dec lows. Important spot to hold here.
If we fail to hold here, we could go test those lows.
March Chicago
Nothing to update here.
Simply consolidating near the lows.
Cattle
Fundamentals:
Not a ton on cattle today as today's focus in the update was the USDA report and the grains.
Cattle continues to push higher with the lower corn.
It makes the cost of gain cheaper so you can theoretically pay for more cattle.
Which often supports feeders the most because feedlots can pencil better margins and theoretically bid more aggressively for feeder cattle.
The cattle situation is still tight.
However, I am skeptical that we have much more upside for beef demand here.
Here is an interesting tweet I saw from Swift Trading.
They make a good argument.
They argue that yes cattle supply is tight, but that doesn’t automatically mean beef gets tighter from here.
They are basically saying that cattle can be tight while beef production still holds up because carcass weights can increase, and slaughter pace can stay strong. You can end up with more beef showing up, even without more cattle showing up.
Cheap corn and a high cattle market will also incentivize heavier carcass weights. That is a metric we need to continue to monitor here.
So if beef production stays steady and demand isn’t growing, then you could argue cattle prices might need to soften because the beef pipeline isn’t getting tighter.
Overall, the cattle market clearly remains bullish with the big picture tight supply story.
But I am still using caution up here as some areas of demand aren’t showing a lot of room for further upside. Such as weak cut out.
The wholesale side of things are also showing some signs of weakness. For example, rib primal value is -26% lower than a month ago. Which feels important because when the wholesale side gets weak, it can often be a sign that demand is getting tapped out at these levels.
There is talk about a dairy buy out program in attempts to get ground beef prices lower. But from what I've heard, it doesn’t sound like it will be happening. The trade hasn’t seemed to care about it either.
Technicals:
March Feeders
We are now above the 78.6% level of the entire sell off.
So from a technical standpoint, the next point of interest is that last gap and those highs.
We are showing some bearish divergence on the RSI. Just a reason to have some caution as well. Prices made new highs, the RSI did not.
Overall, we still like defending these levels in some sort of matter if you have not yet done so. It's hard to call a top in a bull market.
Feb Live
Next point of interest is the 78.6% level just over 240.
Past Sell or Protection Signals
Dec 11th: 🐮
Cattle sell signal & hedge alert.
Dec 5th: 🐮
Cattle sell signal & hedge alert.
Nov 17th: 🌱
Soybean sell signal & hedge alert.
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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HISTORY OF JAN USDA
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
Jan USDA: 2:20min
Corn: 4:40min
Beans: 10:00min
Wheat: 12:45min
Cattle: 13:50min
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Futures Prices Close
Overview
Grains mixed while cattle led the way higher.
The markets are back out of holiday mode but overall we still lack a ton of fresh news. With all eyes set on next week's USDA report.
We did see China buy more US soybeans. With a 336k MT flash sale this morning.
They've officially bought around 7.2 MMT, which is 60% of the 12 MMT goal.
Chart from GrainStats
However, rumors speculate that they've actually bought closer to 10 MMT. Which would be 80% of the goal.
So it doesn’t look like it should be too hard to reach that goal by the end of February, which was Scott Bessents deadline.
Export Inspections vs Last Year
This Year vs Last Year
Corn: +65%
Beans: -45%
Wheat: +20%
Corn demand remains phenomenonal.
Soybean demand continues to be some of the weakest on record.
Wheat demand continues to impress.
The Funds
We are finally getting caught up on all of the delayed data from the government shut down.
The funds positioning is fully up to date now.
Their positions:
Corn: -23k
Soybeans: 85k
SRW Wheat: -95k
Live Cattle: 93k
Here are the visuals.
Corn funds are essentially neutral as they haven’t done much for the last two months. Hence why prices have also traded sideways for the last two months.
For soybeans, the funds were near record long back in November.
Long 230k contracts.
They've clearly given back a big chunk of that length, but are still long 85k contracts. So they haven’t entirely given up that position.
In live cattle, the funds still hold a large position historically speaking.
But isn’t close to the length we saw earlier this year.
The funds are actually holding a smaller position at the end of 2025 than they were at the end of 2024.
History of Jan USDA
This report is always one of the biggest of the year.
It can set the tone for a few months and ultimately has the potential to be a game-changer in either direction.
Let's dive into what this report has provided in the past.
First for corn.
Corn has traded higher on this report the last 8 of 12 years.
Interestingly enough, in 3 of those 4 losses we only traded lower by around 2 cents.
There is only one time in recent memory where we truly had a negative reaction. Which was 2024.
More often than not, this report doesn’t tend to be overly bearish.
It doesn’t mean it has to be "bullish" like last year, but we rarely sell off the day of the report.
Yield tends to come down in this report.
I think everyone agrees yield should be dropping in this report.
The biggest drops we've seen in recent memory came last year along with Jan 2021.
Where yield dropped -3.80 bushels an acre.
The current yield estimate is 186. So if we saw the same cut as last year, it would peg us at 182.2 bpa.
Meaning it would take the biggest drop we've ever seen to get yield below 182 in this report.
Lastly for carryout.
In at least the last decade, we've never seen carryout bumped by more than 50 million bushels.
However, we've only seen it drop by more than 100 million three times.
Last year was the largest we've seen.
Again, this report doesn’t tend to be overly bearish, even if it doesn’t wind up being mega bullish like in 2021 or last year.
Next for soybeans.
The price action provides some interesting data.
Soybeans have only traded lower on the day of this report twice in the last 12 years.
So the data says this report does tend to be friendly.
Yield also tends to come down in soybeans.
But last year was the only year in the last decade where yield fell by a full 1 bushel an acre.
With the current estimate of 53 bpa.
That means to get a yield below 52, it would take one of the largest cuts we've seen.
Lastly here is the carryout changes.
Last year provided one of the largest drops ever. As it dropped -90 million.
Today's Main Takeaways
Corn
Fundamentals:
Demand is still amazing. The sole reason you can’t get overly bearish on corn.
However, we still have an ample amount of supply and a carryout of 2 billion bushels.
Both of these have led to corn trading virtually sideways for a few months. Every break has been bought. Every rally has stalled.
I think corn has upside potential from here.
That record supply and large carryout has already been priced in, meanwhile we have record demand continuing to prevent this market from falling apart.
Just a reminder, corn has traded higher 8 of the last 10 years during the month of January.
Higher the last 4 of 5 years.
Higher the last 11 of 15 years.
Seasonally it's a friendly time period.
But what would it take to get corn beyond $5.00?
We have record supply, but clearly the corn story isn’t the most bearish it's ever been. Because we also have record demand.
Stocks to use ratio is the best way to determine the supply and demand story.
It tells us how much supply is left over after demand.
This chart shows our stocks to use (in yellow).
Along with the highest corn prices each marketing year (in green).
I drew line at a 10% stocks to use ratio as well as $5.00
Based on this chart, you can see that normally, to get corn much above that line of $5.00, the stocks to use ratio typically has to also drop below that line of 10%.
For example:
2010 to 2013 the stocks to use was below 10%. Prices were above $5.00
2014 to 2020 the stocks to use was above 10%. Prices were below $5.00
2021 to 2023 the stocks to use was below 10%. Prices were above $5.00
So if you want greater than $5.00 corn, you usually need a stocks to use ratio below 10%.
We currently have a stocks to use ratio of 12.5%.
Last year we ended at a 10.10% stocks to use with a high price of $5.04.
Here is the current balance sheet ahead of the USDA report.
We have:
186 yield
2.03 billion carryout
12.46% stocks to use
I've shown this example before.
But for this example, let's just say yield comes in at 182.
If you did NOT change any demand numbers at all.
This would drop our stocks to use ratio down to 10.25%.
HOWEVER, if the USDA drops yield, they will inevitably drop demand. To balance the balance sheet.
Most argue feed and residual demand is too high to begin with. While others argue our export demand is being understated.
Regardless, you can see that it is hard to paint a scenario where the corn balance sheet drops to near 10%.
As it would take a 182 yield with demand being left unchanged to do so.
Which is why I personally think corn's upside is limited beyond $5.00 for now.
Later in the year, a completely new story could emerge.
China could buy corn. We could run into a supply scare this summer, and ultimately go a lot higher.
I am not bearish corn, but unless one of those happens, it is an uphill battle to get a stock to use near 10%.
Now we are showing some very interesting similarities to corn last year when it comes to price action.
Here is March-25 corn overlayed on top of March-26 corn.
We are sitting in the exact same ascending triangle pattern.
We have seen identical action off the harvest lows.
I do not think we have quite the upside as last year, based on the fundamentals not being as friendly this year, but I do think we could follow a similar pattern with a breakout in January.
Technicals:
March Corn
We've traded sideways since October.
We now have a triple bottom pattern in place. Which is typically considered a bullish set up.
We've tested the local lows 3 times now.
Which is showing that sellers continue to fail while we build a floor.
The clear level to break is $4.50
If we break above, it should result in a leg higher.
In the meantime, we want to hold those local lows to prevent a leg lower.
Here is the weekly chart.
We have still yet to get a close above $4.50
Again, that is key resistance.
We've failed there for months now.
It was support from spring.
It claws back 50% of the Feb highs.
Break above key resistance and we should go higher.
Soybeans
Fundamentals:
The biggest questions going into the report are going to be yield and if the USDA drops soybean exports.
I mean exports are down -45% vs last year. Yet the USDA's estimates are only -13% lower than last year.
So there is definitely an argument to be made.
The biggest thing preventing bulls from getting excited is South America.
Weather has been mostly favorable.
Here is Brazil's weekly rainfall amounts vs normal.
They've seen some dry weeks here and there, but overall nothing to be concerned about. Clearly the market hasn’t seemed worried about it.
Charts from Rich Nelson of Allendale
China has continued to buy soybeans and live up to their word. Which is great to see.
But the market seems to think it's not enough.
For reference, export inspections for soybeans to China do look pretty worrisome.
They are down over -90% vs last year.
Chart from Dave Brock of Brock Report
Taking a bigger picture perspective, China did agree to buy double for the next few years as to what they agreed to buy this year.
Which could be viewed as a silver lining moving forward if the agreement stays.
Overall there isn’t much for bulls to get overly excited about for now.
Brazil isn’t having any issues.
China continues to buy but overall export demand is still a big question mark.
We will have to see if the USDA provides bulls anything to chew on next week.
As the supply side of the US balance sheet is still fairly tight, given the 2nd-tightest acres of the last decade. That is if exports aren’t totally overestimated.
Technicals:
March Beans
Today was somewhat of a disappointing candle following yesterday's solid price action.
As on Friday, we left a dragonfly doji, and we then followed it up with a very solid day yesterday.
This is a textbook reversal pattern.
We also had a potential classic bear trap on Friday.
False breakdowns (aka bear traps) occur when you break below key support but quickly snap back above it.
In this case, we broke below the golden fib down to contract lows. Along with trendline support from contract lows.
Yesterday we then rallied back above them
We also posted confirmed bullish divergence.
As prices made new lows, yet the RSI did not.
Yesterday's rally looks optimistic for some further upside.
However, the line in the sand is going to be Friday's lows of $10.38.
If we break below that level, we could open the door another 20 cents lower.
As $10.18 would be the next level of support.
I'll have upside targets and areas to de-risk when I'm confident we've printed our lows.
If we close above $10.65 I'd be confident we are ready for a leg higher. As that is the 61.8% level up to those recent Christmas highs.
Wheat
Not going to go over much in wheat today as I don’t want to make today's update too long. There isn’t much new in the wheat market to begin with.
We still lack have a bullish catalyst.
As the US wheat situation is bearish, and globally, there are zero concerns with supply.
Patiently waiting for an opportunity.
Technicals:
March KC
So far we are finding some support where we need.
The 61.8% level of this entire mini bounce we had to end the year.
Need to hold that otherwise we go and test the contract low area.
To the upside we need to take out those Christmas highs at $5.34.
That claws back 61.8% of the Nov highs.
Do that and we can be confident we are ready for the next leg higher.
Weekly Continuous KC
Here is the weekly chart.
We do have a massive wedge pattern we've been forming since 2024.
I'd like to think that eventually we get a break out.
Just might not happen as soon as we'd like.
March Chicago
Hovering near contract lows.
We have some work to do for me to be confident we've found a bottom.
Cattle
Fundamentals:
Live cattle are stalling while feeders continue to rally.
The price action does feel a little backwards.
Cattle is ripping higher even though packers are in the red, we had a packing plant close down, and the beef cutout isn’t strong. Yet they continue to push this market higher. So this rally is hard to justify fundamentally.
Feeders have been leading the charge on this move. It feels like a dash for cash, a race to buy feeders as fast as they can.
It feels like we are getting a little disconnected as far as margins go.
With feedlot margins and packer margins not lining up, the market is getting a little stretched out. For the rally to stay "fundamentally clean". Cash needs to keep going higher or cut out needs to improve significantly.
If you look at the charts, clearly they aren’t bearish. I've been surprised at the strength of this rally. We've blown past some key levels, and the trend remains higher unless we take out last Friday's lows.
With the market doing the opposite of what it feels like it should be doing, we want to be cautious.
We don’t want to stand in front of a moving train here. But this is absolutely a rally where we should be taking chips off the table and upgrading protection.
If you have LRP coverage with a much lower floor, consider rolling that floor up with some strategies.
Give us a call if you have questions:
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Technicals:
March Feeders
We've now blown past that orginal target box. Which was the golden zone retracement of the entire sell off.
We are now really close to hitting my last target before those highs.
Which is the 78.6% level up to those highs.
If we take out this level, then the next point of interest is that last gap and those highs.
Regardless we still like taking some chips off here.
Feb Live
Live cattle also above that original target box.
The next point of interest is the 78.6% level right above 240.
Past Sell or Protection Signals
Dec 11th: 🐮
Cattle sell signal & hedge alert.
Dec 5th: 🐮
Cattle sell signal & hedge alert.
Nov 17th: 🌱
Soybean sell signal & hedge alert.
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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WHEN DO PRICES SEASONALLY RALLY & FALL APART?
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:
Seasonals: 0:55min
Corn: 5:50min
Beans: 9:30min
Wheat: 13:00min
Cattle: 14:00min
Want to talk about your situation?
(605)250-3863
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Futures Prices Close
Overview
Grains mostly lower while cattle trades higher today, following yesterday's brutal price action in the grains.
Overall, it's been pretty quiet with the holidays. We haven’t seen much if any major news.
Traders are on holiday mode which means small volume.
Yesterday’s blood bath could’ve easily been a spill-over trade from the weak outside markets, some last minute farmer selling, and or fund re-positioning heading into the new year. When volume is light, it can make moves over exaggerated.
All eyes are set on the USDA report scheduled for January 12th to give us some fresh fundamental news for bulls and bears to chew on.
The markets will be closed on Thursday with the new year. Outside of that, the trading schedule remains completely the same. With normal open and closes tomorrow as well as Friday.
Full Seasonal Pattern Breakdowns
Since there isn’t much news to digest we are going to go over the seasonal patterns for corn, soybeans, wheat, as well as cattle.
When do each of these markets typically catch a bid or sell off based on prior years?
Corn
First for corn.
We are going to go into the most detail for corn, as corn tends to follow seasonal patterns more closely than the rest of the grains.
As it largely follows the US growing season. Whereas soybeans and wheat rely more heavily on growing seasons from other large players, such as Brazil for soybeans.
Let's look at March corn.
This first pattern is 2025 (last year) vs 2026 (this year).
We've been tracking very, very close to last year's price action.
Last year we continued higher before topping in February.
If we dive into the analytics, last year actually does have the highest pattern correlation to this year.
It sits at a near 80% correlation to one another.
These are all the correlations to this year.
Now here is the March corn 5-year pattern.
This one has tracked very closely as well.
The summer sell off, the August bottom, the rally going into October before trending sideways. All similar.
It too has us climbing higher into February.
Here is the 10-year seasonal.
We clearly haven’t followed this pattern at all.
But it also has us continuing higher into February.
Same story with the 15-year.
Here is the actual data for March corn's price action from today until February 1st.
We've traded higher the last:
4 of 5 years (80%)
8 of 10 years (80%)
11 of 15 years (73%)
So January is often a friendly month for the corn market.
We don’t "have" to go higher. But history favors us doing so.
Next let's look at July corn.
First the 5-year pattern.
We typically post two major tops in this market.
Ths 1st is in February.
The 2nd is in April.
Here is the 10-year.
Again we have two tops that typically form.
February and June.
Seasonal patterns are far from perfect.
But it would be reasonable to think we get that opportunity around February followed by a second opportunity in spring or early summer.
Lastly here is Dec corn.
This is the 5, 10, and 15-year patterns.
Regardless of where the high is.
Every single one of them has us collapsing in June and July.
It happens almost every year without fail. Something to keep in mind for later.
Soybeans
I am not a huge fan of seasonal tendencies in soybeans. As I mentioned, they revolve around more than one growing season so they can be skewed and differ.
However, seasonally soybeans do push higher into February in the 5 (red), 10 (green), and 15 (blue) patterns. Followed by a sell off going into April.
This is July soybeans.
Here is the data for March soybeans from today until February 1st.
The data leans friendly, but not as overly convincing like the corn data.
We've traded higher the last:
3 of 5 years (60%)
7 of 10 years (70%)
10 of 15 years (67%)
Here is Nov soybeans to give you a bigger picture.
We typically get 3 different rallies.
One going into February, June, and November.
Wheat
July wheat usually sees two opportunities.
We typically head higher in February, get a pullback, then get the final opportunity around May.
After that May opportunity, the market usually completely falls apart.
Here is Sep wheat to give you a good visual of that collapse we seasonally get.
Feeder Cattle
Here is March feeders.
We got that seasonal low about a month later than usual.
We now do tend to trend higher into February as well like the rest of the grains.
Feeders typically see two tops.
One around February to March. Then a pullback into spring.
Followed by the real top that usually comes in July and August.
Today's Main Takeaways
Corn
Fundamentals:
Yesterday corn posted it's largest daily loss in over a month.
Fundamentally, nothing has changed.
Demand is great. So every break ends up being bought.
We have a ton of supply. So every rally runs out of steam.
Export inspections are up over +65% vs last year.
Yet, the USDA is only projecting exports to be up around +13% compared to last year.
So you could easily argue exports are going to need to be bumped further.
Yield should be coming down in January. I think that is pretty clear.
The issue is that most think the USDA is going to offset some of that supply loss by cutting feed demand.
To get a corn balance sheet as tight as last year, it would take yield falling down to 182 while at the same time not touching demand at all.
That would give you a 10.25% stocks to use ratio, about on par with last year.
Altough I think we could follow a similar pattern price action wise.
It is hard to think that corn has more upside than last year based on what we know today.
Simply given that it's harder to create some mega bullish story that is friendlier than last year, unless yield is drastically lower.
Last year, the corn market topped out at just over $5.00 with a 1.54 billion bu carryout in February. Last year, we had a 1.74 billion carryout in December.
We still have a 2 billion bu carryout today.
Record demand should prevent this market from completely falling apart.
Seasonally we trend higher from here.
We should see some sort of yield reduction come January.
The bigger question is how much, and how the USDA responds on the demand side.
Do they bump exports? Do they cut feed demand?
We have to keep in mind that we're coming off a record crop fueled by record acres. This makes it harder for the balance sheet to tighten in a big way. Which makes me think our upside is capped in that $4.70 to $5.00 range for now.
Of course, we could run into a weather scare this summer. The USDA could throw a majorly bullish surprise. China could buy corn. We could go beyond $5.00
But for now, those are all just wild cards.
My bias leans higher from here, but upside feels somewhat limited unless one of those cards is drawn to shake things up.
Technicals:
March Corn
Back to the range we go.
We've essentially traded between $4.40 and $4.50 since October.
A very brutal sideways range of just 10 cents for the last 70 days.
Here is the weekly chart.
$4.50 is the clear level we need to break through to get bulls excited and be confident this market is ready for the next leg higher.
It was key support from spring.
We've failed there the last 7 of 10 weeks.
It claws back 50% of the Feb highs.
Break above and it should spark further upside.
Right now we are simply range bound.
If we take out $4.50, we should go higher.
But if we were to take out those $4.35 lows the next point of interest would be the blue box.
I'd be looking to re-own around that level if it came.
As that is the 50-61.8% level down to contract lows.
Ascending Triangle: March 2025 & 2026
We have a possible ascending triangle pattern developing on the charts.
Which is where you have horizontal resistance, but an uptrend of support.
This is a very similar pattern to what we saw in March corn last year before we ultimately broke out in January.
Soybeans
Fundamentals:
The biggest thing soybeans have going for them is that we are oversold.
We dropped over -$1.00 over the course of just 30 days.
Outside of being at an area of interest on the charts and being oversold, fundamentally soybeans don’t have many bullish factors going their way.
Yes, the US situation does have a "path" to become tight.
Arguably an easier path than corn does.
For reference, a 52 yield while leaving demand unchanged results in a near 200 million bushel carryout.
The issue is that you could definitely argue the USDA is going to have to lower export demand.
Which would offset some supply loss if it came.
Currently export inspections are down -45% vs last year.
The USDA only expects export demand to be down -13%.
We are already past our prime shipping window.
Who knows if the USDA will lower it, but it’s a concern that the trade is aware of.
At the same time, we've seen virtually zero issues out of Brazil.
We still have not received any sort of trade agreement Rollins claimed we'd be getting several weeks ago.
Bottom line, I do still think we are at an area where soybeans could find some life. But we will want to be looking to reward the relief bounce if it comes. As a major rally might be hard to come by with no issues out of Brazil.
Argentina is supposed to be hot and dry for the next 2 weeks. Only receiving 50% of their normal rainfall. So perhaps that could add some support, but overall not a game changer.
Below is the 2-week forecast vs the last 30 days of precip vs normal.
Argy is dry, but Brazil looks fine for the next 2 weeks.
Neither has had any big concerns the last 30 days.
Technicals:
March Beans
We are still right at the 78.6% retracement level down to the pre-China fueled lows.
So finding some life here still makes sense.
If we fail to hold this level, we have some trendline support around that $10.50 area.
To the upside, we want to be looking to reward a move towards $11.00 to $11.15 if it comes. That claws back 38.2% to 50% of the entire sell off.
If we look at the indicators.
We had hidden bullish divergence. The RSI was making new lows, yet prices were a lot higher compared to the last time the RSI was this oversold.
If prices make a new low, but the RSI does not. That is called normal bullish divergence. So that could definitely we something we see here if we make new lows over the next few days but the RSI does not.
The MACD indicator is a momentum indicator (on the bottom).
It has not yet flipped bullish, but is close to doing so. The last few times it flipped bullish it did lead to higher prices.
A few other reasons why we could find life down here.
Continuous Chart
Here is the continuous chart.
At the highs, we had a gap left unfilled from 2024.
We almost perfectly filled the gap before going lower.
Now to the downside, we had a gap left open. Which we filled last week.
At the same time, this level gives back 61.8% of the entire rally.
It's also our yearly resistance.
This adds even more reasons to believe this area is a point of interest.
Wheat
Like the rest of the markets, there isn’t much for news.
Wheat demand has been great. Inspections are up over 20% vs last year.
But this market really needs a supply story to get any momentum behind it.
We just don’t have one for now.
Simply remaining patient in wheat for now. Waiting for that rally that only comes a few times a year that typically doesn’t last long.
Technicals:
March Wheat
Nothing to update here.
Trying to call a bottom would be like trying to catch a falling knife. As I haven’t seen anything definitive that's made me believe we've put in a bottom yet.
Ultimately we need above the blue box to be confident this market is ready for a real move higher.
March KC Wheat
KC looks a lot better than Chicago.
We perfectly rejected that golden fib, as we clawed back 61.8% of this sell off.
That is the level we need to break above to be confident this market is going to catch a bid higher.
Like we always talk about, that level is where the market typically decides if this is simply a relief bounce or something bigger.
Cattle
Nothing new in cattle.
Fundamentally, the cattle situation is clearly still tight.
The biggest risk in cattle has to be the government.
I think the government probably keeps big money and the funds from wanting to get too long in this market, because they know a headline could pop out at any moment.
Then we have the Mexican border which could re-open early next year.
Feeder cattle did post a new high today, but live cattle has been trapped in a brutal sideways range.
We still like keeping some downside protection up at these levels.
Technicals:
March Feeders
March feeders did offically fill that gap we left back in October.
This level almost perfectly lines up with reclaiming 61.8% of the entire sell off.
Both of these are big points of interest.
So if you haven’t yet, we still like defending this level.
As this is still where most relief bounces can tend to fail.
Feb Live
Completely sideways.
Consolidating right in the golden zone.
Same story as feeders. This is where relief bounces can often fail.
We still like defending here.
Past Sell or Protection Signals
Dec 11th: 🐮
Cattle sell signal & hedge alert.
Dec 5th: 🐮
Cattle sell signal & hedge alert.
Nov 17th: 🌱
Soybean sell signal & hedge alert.
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.
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 AT BIG SPOT. BEANS BOUNCING. NEXT TARGETS & MORE
VIDEO CHART UPDATE
You can scroll to read the usual update as well. As the written version is the exact same as the video. The video may be easier to follow along with the charts.
Timestamps for video:
Beans: 0:40min
Corn: 5:20min
Cattle: 7:45min
Wheat: 8:30min
Want to talk about your situation?
(605)250-3863
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Don’t miss our future updates or signals
Our holiday sale ends next week
Overview
Today, we are only going to be going over the charts and some things we're watching as there is very little fresh fundamental news with the holidays.
Soybeans are seeing a nice bounce right at those downside targets. Corn is up against some pretty key resistance bulls would like to break. The wheat market is starting to look a little more optimistic. Cattle is still consolidating at our upside targets.
The usual full video updates will resume next week. Where we'll look at seasonals and do some fundamental digging.
Here are the chart breakdowns:
Soybeans
Jan Beans
We are going to start off with soybeans, as we alerted that buy zone alert late last week.
If you missed it, check out last week's video where we went over the methodology behind it.
Click Here to View
So far, we have perfectly bounced off those downside targets we sent out in both Jan and March beans.
We will be switching over to March as the main focus, but I wanted to include Jan beans because they were a large reason for that buy alert.
On Nov 17th we issued that sell signal. Which was because we simply reclaimed 61.8% of the contract highs and were showing bearish divergence.
Late last week, we gave back 61.8% of the contract lows off those Nov highs, and were showing hidden bullish divergence. So we alerted the buy signal at $10.48
It's still too early to say that we found a bottom, but so far we've seen a great reaction off that level.
March Beans
Jumping over to March.
That buy signal came at $10.59
We broke the 61.8% level of the entire China fueld falled. The next level was the 78.6% level at $10.59
When you pair it with Jan beans approaching the 61.8% level down to contract lows, it was enough to trigger a buy signal and take profits off the shorts.
We were also the most oversold we've been in over a year.
At the same time, we were showing hidden bullish divergence here as well.
The RSI was very oversold, yet prices were much higher than the last time it was this oversold.
This doesn’t mean prices "have" to rally. It simply told us downside momentum might be getting weak.
Continuous Weekly Chart
This is the continuous chart and shows the contract with the most volume.
We had a clear area of resistance all year long.
We got the break out in October.
We've now came down and tested that point of break out. Often times, old resistance becomes new support and vice versa.
A perfect example of this would be the highs we just posted. We happened to fail right at those old support levels from 2024.
At the same time, this chart had a gap left open.
Last week we filled that gap, which perfectly lined up with the old resistance. Along with the 61.8% retracement level down to the Sep lows.
So finding life here makes sense.
March Beans Target:
Well, now how high can we go?
Since this correction was so deep, it appears unlikely that this market is going to go and post new highs. If it did, I think it would take a larger outside factor. Such as an issue in Brazil or China buying more beans than the market has currently priced in. But for now, neither of those seem all that likely.
So if we found our local bottom here, we are going to want to be looking to reward this relief bounce.
The golden zone is the 50-61.8% levels. However, I have my doubts that this market has enough steam to get that high given the size of the sell off.
So I am looking to de-risk in the $11.00 to $11.15 area as of now, but is of course subject to change as the chart develops.
That level claws back 38.2% to 50% of the entire sell off.
Past Relief Bounces
Like we talked about last week.
When a market posts a major high, often times it will give some sort of relief bounce. Not every time, but a lot times.
It's typically not just a straight sell off that goes to zero.
This is because the most common correction pattern is markets is called an ABC correction.
You get the intial A wave down. The B wave relief bounce. Then the last C wave down.
We showed this last week. But an example of this is July corn from earlier this year.
We got the initial sell. We then got a relief bounce up to the golden zone. We then went a lot lower.
Interestingly enough, the top was marked with bearish divergence. The bottom of the relief bounce was marked with bullish divergence.
So some similarities there to what we are currently seeing in soybeans.
Here is another great example of a relief bounce.
This one is Dec-23 corn.
We had that weather scare rally that took corn from $4.90 to $6.30 in a few weeks.
Corn then gave it all back in just a matter of days.
But the market did offer a relief bounce before ultimately falling apart.
The relief bounce failed once again right in that golden zone.
The point is, relief bounces are common. But we want to reward it if it comes. Just like we rewarded the April bounce in corn this year.
As they are often opportunities when they present themselves.
Corn
March Corn
March corn is currently battling some big resistance we've continue to struggle at for months now.
This is a big spot for corn, as we are flirting with a breakout if we can clear this level.
It was support from spring, we've rejected this level a dozen times since October.
If we get a break above, it should result in further upside.
We are also above the 200-day for the 3rd day in a row. Which is something we haven’t seen since summer.
Being above the 200-day after being below it for so long, can often be a sign that a market's long term momentum is shifting higher. So it's nice to see that.
March Weekly Chart
Here is the weekly chart.
We had our highest weekly close since June today.
This chart shows you just how big of resistance that $4.50 level is.
We bounced there on 8 separate weeks this spring.
We've now failed that level 5 weeks the last two months.
Big spot to clear.
Upside Targets
We alerted our first sell signal and take risk off the table for the first time since April we hit that intial $4.50 target.
If you haven’t taken any risk off the table at all, taking a small amount off while we are sitting at our highest levels since July and some key resistance isn’t the worst idea in the world.
Since we already took some risk off, my eyes are set on the next target.
Which comes in at $4.70 to $4.75
Reason 1:
When you take the very first impulse off contract lows, up to the September highs.
And measure that move, 161.8% of that entire rally comes in at $4.73
This is a common spot for a second rally to end.
The most recent example of this would be the cattle market either this year.
This is a smaller time frame, but the same concept.
This was our reason for the sell signal back in October for cattle.
We had that first mini rally. We then pulled back.
The second rally then stopped right at that 161.8% level. Also known as the golden fib.
Reason 2:
This is the continuous chart.
When you take the August lows, up to the Feb highs.
So far the market reclaimed 61.8% level of that entire sell off. Which is why it makes perfect sense the market has struggled to bust above this level.
The next level is the 78.6% level which sits at $4.75
Cattle
Feb Live
Not much to update on cattle.
We've traded pretty much sideways for two weeks.
We continue to sit in this golden zone.
Which was our upside target and where we alerted a hedge signal.
We still like keeping those, as there is still risk in this market.
If the market is going to fail, most relief bounces tend to fail here.
Break above the green box and we might have a different story. But for now, it makes sense to defend this level.
March Feeders
Same set up here.
Still sitting in the golden zone.
Jan Feeders
Volume has switched to March.
But Jan feeders perfectly filled that gap we left.
We also nearly tapped that 61.8% level of the entire sell off.
Both of those were pretty big points of interest.
Wheat
March KC Wheat
KC has perfectly clawed back 61.8% of the entire sell off.
Pretty important spot here.
It's where the market typically decides if this is simply a dead cat bounce of the start of something bigger.
It's where bounces tend to fail, but if we break above this level it would be our first sign that this market is potentially ready for a real move higher.
Still targeting the golden zone up to those June highs if it comes.
KC March Weekly Chart
The weekly chart does look pretty optimistic here.
We had the doji last week.
Followed it by strength this week.
Some would call this a morning star. Which is a pretty common reversal pattern.
We saw a very similar pattern on the June rally.
Dec Chicago Wheat
Not nearly as strong as KC.
Still need to clear the golden zone up to the recent highs to be confident we've posted some longer term lows and are ready for a real move higher.
We've seen a nice move, but need to see some more concrete evidence to believe this was truly the bottom.
Past Sell or Protection Signals
Dec 11th: 🐮
Cattle sell signal & hedge alert.
Dec 5th: 🐮
Cattle sell signal & hedge alert.
Nov 17th: 🌱
Soybean sell signal & hedge alert.
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.
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.
NOBODY TRUSTS SOYBEAN DEMAND. CHINA CANCELS WHEAT
AUDIO COMMENTARY
We still like having hedges in cattle
Cattle still viewed as relief bounce for now until proven otherwise (chart below)*
How to properly manage risk in cattle
Area we’d re-own corn (chart below)*
Record ethanol numbers
Corn “usually” goes higher end of year
China cancels US wheat
Looking at getting feed coverage
No issues in South America, but market no longer cares about these China purchases
Nobody trusts the demand in soybeans
We could have plenty of soybeans if we don’t have any South America scares
Find a different approach if the tax man is forcing you to sell
Level I’m looking for in soybeans (chart below)*
Listen to today’s audio below
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CHARTS
March Corn 🌽
This could be the bottom. We closed back above the 61.8% retracement to the Oct lows. Exactly where we recently found a bottom a few weeks ago.
I’m not looking to re-own unless we drop down into the blue box. That would be a great point of interest. As it is the golden zone of the entire rally.
It gives back 50-61.8% of the entire rally off contract lows.
I am not looking to re-own anything -10 cents off the highs and where we last sold at $4.50
If we come down to the blue box, that would be a reasonable place to find a bottom if this red box and yesterday’s lows do not hold.
To the upside, $4.50 is the clear level to break above.
We rejected there multiple times. It was old support from spring. It reclaims 50% of the Feb highs.
Jan Beans 🌱
We broke below the golden zone of this entire China fueled rally?
Now what?
Scroll to view where I think the bottom could be*
Since we broke that first 61.8% level.
The point of interest is going to be 61.% of the entire rally from contract lows.
That comes in at $10.48
That would be a great spot to look to re-own in my opinion.
If you remember.. the recent highs where we issued that sell signal were marked by reclaiming 61.8% of the contract highs.
So finding a bottom after giving back 61.8% of the entire rally from contract lows would make perfect sense.
Feb Live Cattle 🐮
Still sitting in the golden zone.
Still like taking some chips off the table here.
This is a common spot for a bounce to fail.
Take out the 61.8% level and we could be looking at something bigger, but until that happens this is viewed as a bounce that should be rewarded in my opinion.
Jan Feeders 🐮
Same exact story.
Still in the golden zone.
I also think we could have a potential exhaustion gap from last week. Which makes me even more cautious.
Past Sell or Protection Signals
Dec 11th: 🐮
Cattle sell signal & hedge alert.
Dec 5th: 🐮
Cattle sell signal & hedge alert.
Nov 17th: 🌱
Soybean sell signal & hedge alert.
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.
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.
A LOT RIDING ON USDA & BRAZIL
AUDIO COMMENTARY
Corn & beans bounce off their lows
Corn shipments great, beans poor
How long can strong corn demand continue?
Corn holding key level (chart below)*
Good risk parameter in corn
Beans near the gap (chart below)*
Bullish bean divergence? (chart below)*
Need the funds to get interested
A lot riding on USDA and Brazil weather
Everyone across world increasing crush
What if China buys more than agreed?
Possible zero-cost strategies for upside
Re-own area in soybeans?
EPA news adding pressure
Still like protecting cattle rally
Wheat not looking hot (chart below)*
Defining your marketing timeline
Listen to today’s audio below
Want to talk? (605)250-3863
Holiday Sale
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CHARTS
March Corn 🌽
We bounced right where we needed to hold.
Which is those recent lows and the 61.8% level down to those October lows.
Big spot to hold short term. As failure to hold, could bring us down to the blue box.
The blue box is 50-61.8% of the the entire rally from contract lows.
Need above $4.50 to spark more upside. That remains key resistance.
Jan Beans 🌱
Nearly closed the gap today but did not.
Now sitting right at the golden fib. Which gives back 61.8% of the entire rally.
This also happens to be our yearly resistance.
If we are going to be bounce, it needs to be right about here. A bounce here still makes sense.
Failure to hold could result in us dropping to the 78.6% level at $10.46 and could drop us back into the brutal yearly range we were trapped in.
Since we had a sell signal at $11.55, I will share my next target once I am confident we’ve put in a bottom.
Here is another reason to believe we could possibly find a local bottom here soon.
We are showing potential hidden bullish RSI divergence.
Where the RSI is making lower lows, but prices are clearly higher than where they were the last time the RSI was this low.
Bearish divergence marked those highs. As prices were making higher highs, but the RSI was not.
March Wheat 🌾
Not looking to good here.
We broke below the 61.8% level of the contract lows, which was seen as a must hold spot.
The last line of defense we have is the 78.6% level. Otherwise it’s those contract lows.
Jan Feeders 🐮
Both feeders & live cattle currently sitting in our target box and the golden zone.
This is where the market typically decides if this is just a correctional relief bounce or the start of a real rally.
This is where most relief bounced fail.
So this is viewed as a relief bounce unless we break above the green box and 61.8% level. If that happens, then often times it tells us this is not a relief bounce but something bigger.
I am still being very cautious that this was an exhaustion gap. We gapped higher after a big rally. We have now filled it in feeders.
Those type of gaps can often mark the end of a trend. Doesn’t have to. But it happening in the golden zone is all that more reason to be cautious.
Past Sell or Protection Signals
Dec 11th: 🐮
Cattle sell signal & hedge alert.
Dec 5th: 🐮
Cattle sell signal & hedge alert.
Nov 17th: 🌱
Soybean sell signal & hedge alert.
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.
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.
WHAT NEEDS TO HAPPEN FOR HIGHER PRICES?
AUDIO COMMENTARY
What needs to happen for higher beans
Funds need a reason to get behind this
Beans near golden fib (chart below)*
Could the aid help basis?
We’ve created massive demand in corn
When to NOT use basis contracts
Lot of unknown business to corn
Making sales that make sense
SA crop isn’t having big issues
Options strategy that “could” be a home run IF we repeat last year’s price action in corn
Puts are cheap if you need protection
Being proactive when you want to. Not when you have to
Exhaustion gap in cattle? (chart below)*
All chart breakdowns below audio*
Listen to today’s audio below
Want to talk? (605)250-3863
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Take advantage of our holiday sale
CHARTS
Jan Beans 🌱
Getting close to that downside target.
The 61.8% retracement of the entire rally.
This is where the market usually decides if this is a correction or if we truly falling apart.
Pretty big spot to hold. If we break below, it usually indicates we are not in some simple correction before heading higher. Meaning further downside could be ahead. If we bounce here, it tells us the uptrend is still in tact.
It also happens to be outryearly resistance.
We do not have to fill the gap, but it is possible.
Only 35% of breakaway gaps fill compared to 80-90% of normal gaps.
Here is the weekly chart to give you another perspective.
The 61.8% level and yearly resistance are at the same level.
We were trapped in a range for over a year.
We broke out. We are now retesting that point of break out.
If we break below this 61.8% level, we break back into that old range. Which would be viewed as a potential failed breakout.
So ideally we hold it, or we could go back into that brutal range.
Jan Feeders 🐮
We are in the golden zone.
This is where relief bounces often fail.
If we were to take out that 61.8% level, it usually tells us that this is not a relief bounce and is the start of something bigger. But for now, this is viewed as a relief bounce. Hence our sell signal yesterday.
We also had a potential “exhaustion gap” yesterday.
There are 3 types of gaps.
Normal gaps:
The every day ones.
Break away gaps:
A break away gap is a gap that breaks out of a range and resistance. A very bullish type of gap. What we saw in soybeans.
Exhaustion gaps:
They occur after a big move and at the end of a trend. Oftentimes they can mark the tops or bottoms. As it happens late in trends. Basically it is viewed as the last burst of energy before the momentum fades.
This could very possibly be what we are seeing here. However, we have not yet filled that gap. Typically, you need the gap to be filled to get confirmation this is an exhaustion gap.
Feb Live 🐮
Looks just like feeders.
We are in the golden zone.
If we fill that gap, it could possibly be an exhaustion gap.
Something to be cautious of up here.
If we take the 61.8% level out, it often indicates this is no longer just a relief bounce.
March Corn 🌽
We are in an uptrend until we break below that red box.
If we break below the red box, we probably revist that orange box area.
The red box is 50-61.8% of this rally from Oct. The most common spot for a correction to end.
To the upside, we need to clear $4.50 to see more upside. It’s been clear resistance for several reasons we’ve talked about.
March KC Wheat 🌾
Sitting right at the 61.8% level. The golden fib.
We closed below it today by a hair. If we get back to back days below it, it probably signals we are headed lower.
Pretty much a must hold spot.
Past Sell or Protection Signals
Dec 11th: 🐮
Cattle sell signal & hedge alert.
Dec 5th: 🐮
Cattle sell signal & hedge alert.
Nov 17th: 🌱
Soybean sell signal & hedge alert.
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.
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.
WORLD VS US SITUATIONS
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:
News: 0:00min
World vs US: 3:30min
Corn: 6:10min
Beans: 11:20min
Wheat: 13:30min
Cattle: 14:45min
Want to talk about your situation?
(605)250-3863
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Here is extended access to our Black Friday sale
Futures Prices Close
Overview
Grains mostly higher, while the cattle market showed some strength gapping higher on the open.
Today we did issue another cattle hedge alert, so check that out if you haven’t.
Click Here for Signal
Funds "Were" Near Record Long Beans
Overall there hasn’t been any major pieces of news.
We're still getting the backlog of data from the government such as export sales and the funds positions.
The most recent funds data we received yesterday showed the funds were at near record long levels in the soybean market back on the November 10th data.
As they were long 195k contracts. Just shy of the record in 2020.
Clearly they've now backed off of that position.
The CTFC orginally planned to be caught up with the positions in January. They announced they will now be caught up by the end of the year.
More China & Soybean Confusion
This wasn’t mentioned in yesterday's audio.
But US trade rep Jamieson Greer said that the deadline for China to buy the 12 MMT of soybeans is the end of the "growing season". Not the end of the calendar year.
If he talking about the US growing season next year? Is he talking about Brazil?
It really doesn’t make any sense.
Who knows if he even knows what he's talking about.
Bessent the other week claimed the deadline was the end of February.
Now this does makes sense.
That is when Brazil's crop comes online, so it makes sense we would get these soybeans sold before Brazil takes over.
If it actually is the end of the growing season, that would suck. Because you have to remember we have that 25 MMT of soybeans we are suppose to ship every year for the next 3 years.
Getting this 12 MMT done by February would be nice because we can then start that 25 MMT for new crop later in the year.
Originally the White House fact sheet clearly said the end of 2025.
Who knows if they have no clue what they are talking about, or if they really are just attempting to gas light everyone.
Guess we'll find out.
We still do not have that trade agreement Rollins claimed we would be getting any day now either.
As there is nothing in writing and China has yet to verify anything.
More Bean Sales to China
Despite the confusion, China continues to do what the US claims they agreed to do.
As they do continue to purchase soybeans.
With another flash sale of soybeans to China today.
We have now seen 3.4 million metric tons of the 12 million goal.
Which is 28% of the goal.
It's been about a month since they started buying.
We are over 1/4 of the way to the goal.
So seeing us meet that goal over the next 2 1/2 months by the end of February does not seem unreasonable at all.
Chart from GrainStats
Feds Cut Rates
Feds cut rates once again yesterday as expected.
This is the 3rd cut this year.
Trump said he is going to hire a new fed chair in May when Powell's term ends.
He basically said he is going to hire someone who listens to him and just keeps cutting rates.
Rate cuts lead to higher inflation. This supports higher prices for commodities.
Rate hikes lead to lower inflation. Lower inflation entices lower-priced commodities.
I've shown this chart countless times, but there is a clear correlation when it comes to inflation and the price of corn and soybeans. Whether it's a coincidence or not, it's hard to argue against it.
Take the top of the bull market in corn for example. It ended when the feds started hiking rates at the most aggressive pace in history to lower inflation.
If the feds continue to cut rates, and inflation goes up. It could be bullish for prices LONG TERM, not immediately.
Something to keep on the back burner long term.
World vs US Situations
We've got a tale of two stories here when it comes to corn and soybeans.
First for corn.
Like I shared earlier this week, the world corn situation is actually tight.
It is the tightest it has been in 13 years.
Even with a record US crop.
Does this matter today?
Yes and no.
It doesn’t matter because the US currently has plenty of supply.
But it will matter if the US or Brazil ever run into a production issue (which is bound to happen someday). We've seen a few years in a row without a weather scare.
If the world is the tightest it's been on corn in a decade, and we run into a weather scare, this chart right here would amplify the effects.
The world clearly still needs our corn.
But if the world situation is tighter than it was during the bull market.. why aren’t prices higher?
Like I said, the US has a record crop.
Our stocks to use ratio here at home isn’t viewed as bullish as of today.
The bull market featured a tight US situation.
Why does this matter?
Because the US is clearly the most dominant global player in corn.
We produce 31% of the world's corn.
China doesn’t export corn as they use it domestically.
The next closest is Brazil at 11%.
So the US corn situation matters more than the world corn situation when it comes to it's affect on prices.
Next for soybeans.
Our US situation is actually decently tight.
A 290 million bushel carryout is almost on par with those bull market years.
So why aren’t prices higher?
Because the world situation in soybeans isn’t bullish.
It's still sitting at some high levels historically.
Only behind the last two years and the trade war.
That bull market featured a tight world situation.
Why does this matter?
Unlike corn, the US does not dominate the world market for soybeans.
Brazil does.
So the US situation matters more in the corn market.
Lastly here is a quick look at the wheat market.
Neither the US or global picture is super friendly.
For starters, the US situation is the most bearish it's been in 5 years.
The world situation is actually tighter than it was the last few years.
But the stocks to use has started to pick back up this year.
This is because global production is outpacing demand this year.
This is not a great sign when paired with ample US supply.
Today's Main Takeaways
Corn
Fundamentals:
Let's take a look at some of the seasonals today.
I shared these most of these on social media the other day.
Here is the March corn 10-year seasonal.
Clearly it hasn’t tracked this at all.
So this pattern doesn’t really matter.
This is the Dec corn 5-year seasonal.
It played out pretty much perfectly.
Altough it wasn’t quite as strong, it followed the exact pattern.
Here is the March corn 5-year seasonal.
We've been following this almost tick for tick.
Lastly, here is March-25 vs March-26 corn.
Very similar as well.
In both the 5-year pattern as well as last year's pattern, we re-vist the highs we posted in spring.
If we were to do that again this year, it would put corn in that $4.70 to $4.80 range.
Bottom line, I am not bearish corn. But I do think our upside is still limited beyond $5.00 for now.
Simply because we do have massive production numbers here in the US.
At the same time, record demand should help keep a floor under this market.
To see this market get that next leg higher, it might take a yield cut in the Jan report. The issue is that I'm sure the USDA will walk back some demand numbers at the same time.
But taking a long term perspective on this market.. we have built all of this demand.
What happens if acres come down next year?
What happens if weather isn’t perfect next summer?
We already created a demand monster.
That is why "low prices cure low prices".
It's the markets job to put prices at a level that justify the demand.
For the market to justify lower demand in the future, prices typically have to go higher.
So short term, I think the path to significantly higher prices is harder. Long term we could have a story behind this demand when supply and acres aren’t shattering records.
Corn Options Ratio Strategy
For those with hedge accounts, this is a strategy Jeremey and Lauren are considering for some.
Right now, March corn is trading about exactly where it was last year.
From then, corn went on to rally to around $5.00.
If we wind up with even a remotely similar path, there are ways you can capitalize on that potential.
The trade in simple terms:
Buy 4 February $4.60 corn calls.
Sell 1 December 2026 $5.00 corn call.
Selling the one call pay for the bought calls.
Here is what the calls would approximately be worth at expiration if we rallied to the following:
$4.70 = Each Feb call worth 10 cents
4 of them = $0.40
$4.80 = Each Feb call worth 20 cents
4 of them = $0.80
$4.90 = Each Feb call worth 30 cents
4 of them = $1.20
$5.00 = Each Feb call is worth 40 cents
4 of them = $1.60
$5.50 = Each Feb call is worth 90 cents
4 of them = $3.60
(The Math: Futures Price - $4.60 = Call's Worth at Exp)
Here is a visual on the potential price you'd get for your corn plus the value of the calls at different corn prices. Not inlcuding basis.
This chart is provided that the Dec call you sold expires worthless and you collect the entire premium.
We are not saying any of this has to happen at all, this is simply the results if it happened.
It's a trade that could pay for a farm if the market did decide to take off, or it could turn a break-even year into a profitable one.
Why not just buy calls?
In case the market does not go higher.
By selling the one call, it completely pays for buying the other 4 calls.
If the calls go to zero, you don’t lose much if anything.
Basically, a way to play the upside for free until the long calls expire.
This is just a way to play for a similar type of rally to last year while taking advantage of low implied volatility.
Lauren broke this down even further along with some variations, if you want to check that out:
CLICK HERE FOR LAURENS'S STRATEGY
If you’re interested in this trade, reach out to Jeremey or Lauren.
Jeremey: (605)250-3863
Lauren: (806)391-7178
Technicals:
March Corn
Nothing new on the corn chart.
We've traded pretty much sideways for over a month now.
We have closed between $4.40 and $4.50 for the last 27 of 32 trading days.
A very small 10 cent range for over a month.
Whatever way this range breaks should give us our next direction. Everything in between in noise.
Corn still remains in an uptrend as long as we hold the red box.
Which gives back 61.8% of the Oct rally.
We've been battling the 200-day MA for 10 days in a row now. Two consective closes above would be nice to see.
Ultimately, to say we are ready for further upside we need over $4.50
We've only closed above that key resistance one time. It was the day before the USDA report before the USDA sent us straight back down.
It's still clearly the level to break. It is our old key support from spring. Now key resistance.
It reclaims 50% of the Feb highs.
Soybeans
Fundamentals:
Just going over the technical charts today as I do think we are in an area where we should start to find some support.
It's really going to come down to two things here over the next few months.
China and Brazil.
We need China to continue to step in here and buy to help keep a floor under this market. Which I think happens.
But for this market to get super bullish, it very well could take a production scare out of Brazil. It is still early, but so far we haven’t seen many issues.
There are a ton of possibilities in this bean market.
Some could result in +$12.00, some could result in us staying below $11.00.
The potential for a lot higher prices still exists, but the bulls need to keep getting fed.
Whether that's China buying more than expected, a weather scare in Brazil, or a yield surprise in the Jan report.
Technicals:
Jan Beans
Have we found a bottom?
I'm still hesitant to say we bottomed.
But I do still think we bottom somewhere in this green box.
This has been my downside target since those highs.
Giving back 50-61.8% of a rally is viewed as a standard correction.
That is where the market decides if we are still in an uptrend or starting to fall apart.
It also just so happens to be our yearly resistance.
Everyone is screaming about that gap.
Fun Fact: only 35% of breakaway gaps get filled.
it's possible, but I do not think we have to fill that gap.
If everyone thinks something is going to happen, often times it doesn’t happen.
Here is the weekly chart.
We clearly broke out of that brutal range we were trapped in for over a year.
When you break out of a range, it is extremely common to back test the point of breakout.
It was resistance for over a year on several separate occasions.
We are now coming down to test it as support.
We do not want to fall back into that range, as that would be viewed as a failed breakout.
The golden fib (61.8%) sits there as well.
So breaking below that would tell us we are probably in for more downside.
But for now, bouncing in this area makes perfect sense.
Wheat
Like soybeans, just going to be going over the charts today as there really isn’t anything new fundamentally since the USDA report.
We are also at some pretty key levels on the chart.
The wheat market is digesting the news from the USDA.
They confirmed that the wheat crops around the world are getting bigger, and there is no concern globally surrounding wheat.
So the wheat market still lacks a catalyst.
Seeing those production increases in several countries does make you think the wheat market could continue to struggle for some time. So there is no reason to get super bullish, but I find it hard to get overly bearish at these levels.
Simply waiting for an opportunity. Which in the wheat market seems to only come a handful of times a year.
Technicals:
March Wheat
We are sitting right at the golden fib.
61.8% of the entire rally.
This is a must hold spot.
If we fail here, we could easily revist those contract lows.
If we bounce here, this sell off is still viewed as a normal correction and we are still in an uptrend.
Dec KC Wheat
Exact same story for KC.
Sitting right at the golden fib.
Absolutely a must hold spot. As a break below opens the door lower.
Cattle
Like I mentioned, today we did issue another sell signal and hedge alert for the cattle market.
This comes after that hedge alert we issued on Friday.
Why the signal?
Let's jump into the charts.
Technicals:
Feb Live
Live cattle is approaching our 2nd target.
Which claws back 61.8% of the sell off.
That is the most common spot where a corrective bounce will fail before heading lower.
We are also right up against the 100-day MA.
We issued the alert on Friday because we reclaimed 50% of the sell off and were approaching the 50-day MA.
Jan Feeders
Feeders aren’t quite as close to hitting the 61.8% level as live cattle is.
But since we are approaching the target in live cattle, the signal is for feeder cattle as well.
Regardless, this green box is where the market makes a decision and tells us if this is simply a relief bounce before heading lower.
As relief bounces usually claw back 50-61.8% before failing.
Open Interest
This is something that has me pretty cautious of up here as well.
On the bottom is open interest for Jan feeders.
It's been decreasing this entire rally.
Which means this is a short covering rally.
Meaning shorts are exiting the market, but this rally isn’t fresh longs stepping up and buying into this market.
This usually isn’t something you see if a market is going to go ahead and post new highs.
Past Sell or Protection Signals
Dec 11th: 🐮
Cattle sell signal & hedge alert.
Dec 5th: 🐮
Cattle sell signal & hedge alert.
Nov 17th: 🌱
Soybean sell signal & hedge alert.
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.
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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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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.