MARKET UPDATE

You can scroll to read the usual update as well. As the written version is the exact same as the video.

Timestamps for video:
Overview: 0:00min
Corn: 2:45min
Beans: 6:25min
Wheat: 7:55min
Cattle: 11:30min

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Overview

Massive day for the grains. Once again led by crude oil, which was up a huge $10 a barrel. Now trading over $90. As war headlines continue to drive the market.

Wheat was just a penny away from trading limit up today.

Thow fundamentals and balance sheets out the window. This is a pure geopolitical rally.

We are at some levels where we think it makes sense to take some chips off the table in both corn and wheat, which we will touch on in this update.

But first.. what's happening with the Iran war?

This morning Trump said:

"There will be no deal with Iran except unconditional surrender".

Crude oil immediately shot up to two year highs.

Iran rejected cease fire negotiations.

This thing could continue to escalate for a little while longer, but at a certain point Trump will inevitability step in and de-escalate the situation.

He really has no other choice.

He can’t afford crude oil continuing to rally like this. It creates higher inflation and higher gas prices, two of his main goals.

Timing is the hard part.

Do we see a deal struck this weekend? Next week? Next month?

We want to defend this type of rally in corn and wheat. Things can get crazier no doubt, but we've all seen how fast headline driven markets can give back.

Wheat is over $1.00 off the lows. Corn went from falling apart after the Jan USDA report to now posting a new high for the year. Trading at it's highest level since last summer.

Crude oil is already up nearly +70% on the year. Up $25 a barrel this week alone. Trading to it's highest levels since 2023.

Here is a zoomed out weekly crude chart.

We can have some historical rallies and sell offs.

How high can crude go?

It all depends on how high Trump allows it to get.

He is very vocal about wanting to get oil prices down.

We could go well beyond $100. Totally possible.

But if you take the recent lows, up to those 2022 highs, the golden zone is $90 to $100.

I'm not sure if Trump will allow crude to go much beyond $100 and stay there without manipulating the markets and creating a solution. Because if crude stays over $100 for an extended period of time, it's going to create a lot of problems economically for Trump that he does not want.

But clearly, things can get stupid fast if the situation continues to escalate and Trump doesn’t step in with a solution.

Charts & Targets

Corn

We hit some targets in both old crop and new crop corn.

So we like taking some risk off the table.

Ideally, we want to simply buy short-dated puts. This locks you in a floor. Gives you a worst case scenario, while at the same time leaving your upside completely open and being able to participant in further upside if things continue to soar.

Because no one knows how much further this war conflict is going to escalate. Using options let's you hedge that uncertainty. It's just by far the best way to go about this type of market.

If you don’t have a hedge account, situations like this are exactly why it's a critical tool to have. It leaves you with flexibility.

If you don’t have one, you could consider making another incremental sale. Whether that is 5% or 10%.

If you'd like to talk specifics or like to open a hedge account with us, give us a call or text anytime.

Office: 806-484-1214

Let's get into the charts.

July Corn: Target 1

Pretty much tagged that first target around $4.72

That claws back 61.8% of the highs from last February.

Highest price of the year. Highest since last summer before the harvest sell off.

July Corn: Next Target

If the rally continues, the next target is $4.85

That is 61.8% of the highs from May 2024, and right along those April highs from last year.

May Corn: Target 1

May isn’t as strong as July, so we did not quiet hit that 61.8% level up to the Feb highs from last year.

But this general area between $4.60 and $4.67 is a good spot to take some chips off the table.

Today was the 2nd highest close we've had since last summer.

May Corn: Next Target

The next target if we keep running is $4.78

That claws back 61.8% of the May 2024 highs.

Dec Corn: Target 1

Today we clawed back 61.8% of the contract highs.

Highest this contract has been in 2 years.

We like de-risking here.

We had an official sell signal and hedge alert we sent out earlier today. Nothing too crazy but we like at least getting a start here.

Dec Corn: Next Target

Here is a weekly chart.

So we hit that first target which is the 61.8% level up to contract highs.

The next fib is the 78.6% level at $4.96

We also have a gap on the weekly chart that sits right at that same exact level.

So the next spot we want to de-risk is around $4.96

Dec Corn: 2025 vs 2026

I just wanted to point this out.

The high for Dec-25 corn last year was $4.79 on that February rally.

Today Dec-26 corn closed at $4.84

So you have the ability to start your marketing.. higher than the absolute highest price we saw last year.

It probably makes sense to get at least a small start on some new crop.

Soybeans

May Beans:

We finally cleared those November highs.

We also broke above $12.00

Clean breakout, so we could have some room to run.

I'm more interested in rewarding corn and wheat on this rally. Both of those have almost entirely been driven by the war headlines.

Front Month Beans: Next Target

I don’t have a problem with rewarding some $12.00 beans.

But we already de-risk at those November highs.

The next target is $12.50

That is the lows from 2023.

It's also the highs from 2024.

Nov Beans: Next Possible Target

Playing this next target by ear.

But Nov beans cleared those highs, so looks like we could have some room to run.

A simple 161.8% fib extension from the January lows up to the November highs spits out $11.77

So another 30 cents from here. Which somewhat lines up with the next target on May beans being about 50 cents away if May leads the way.

My decision will likely be decided by the action in front month beans, as that is where all the volume is.

KC Wheat

Like in corn, we hit some targets and like rewarding a $1.00+ rally here.

Again, ideally, we like simply grabbing some short-term downside protection while sitting back and watching to see how high this thing can go.

Because if things get worse with the war, the wheat market is a market that could easily rally another $1.00 in a week.

But it's not smart risk management to do absolutely nothing at these levels. It would suck to watch us rally then give it all back without doing anything. It would also suck to sell a bunch only for the rally to keep going.

Using options eliminates both of those fears. Which is why that is our preference here.

If you don’t have a hedge account or don’t like options, it probably makes sense to just make an incremental sale.

If you have questions, shoot us a text or call.

Office: 806-484-1214

July KC: Target 1

We clawed back 61.8% of the highs from May 2024.

This aligns with the "implied" move from the ascending triangle breakout we had.

So we like de-risking at this level.

July KC: Targets 2 & 3

Here is the weekly chart.

The next target is 61.8% of the contract highs at $6.63.

About another 30 cents higher from here.

Beyond that?

You're looking at $7.00

Which is 78.6% of the contract highs.

May KC: Target 1

We reclaimed 61.8% of the highs from last February.

This same area was roughly the implied move of that ascending triangle breakout we had.

May KC: Next Target

Here is the weekly chart.

The next target is 61.8% of the highs from May 2024.

That level sits at $6.55 another 30 cents from here.

KC Wheat: Long Term Bottom?

I've been showing this for a while.

Here is the weekly continuous chart.

I think we've put in some long term lows.

We bottomed at the 2020 highs.

We got a clean wedge breakout.

Even before the war fiasco, we were in the process of putting together our longest rally since 2021.

The current rally is almost twice the size of the next longest rally we've seen over the course of the last 5 years.

I'm not going to get too bullish here, but wanted to let the possibilities be known.

I'm not saying this has to happen at all, but the wheat market can get crazy and do some stupid things.

Right now we have a pretty similar set up to what we saw back in the 2010's where we saw $8.00 wheat.

Who knows how the war will shake out. But just remember wheat is a market that go on a tear in a short period of time if the war turns into something bigger.

Could take years, but we'll probably see $8.00 wheat again eventually.

Cattle

JBS News

It looks like the JBS workers gave notice and a strike is possible on March 16th, which is 10 days from now.

April Feeders

Not much to update.

We rejected right at that golden retracement of the sell off like we talked about yesterday.

Clear that level and we probably test the highs.

Take out the recent lows and we open the door potentially a lot lower.