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, Ag Outlook & More: 0:00min
Hope for Beans?: 3:00min
Corn: 5:00min
Soybeans: 7:00min
Wheat: 9:45min

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Overview

Corn & soybean markets take it on the chin to end the week while the wheat market gets a relief bounce following their 2-day sell off.

The focus moving forward is the USDA Ag Outlook Forum next week. This is usually bearish so just keep that in mind.

We also have first notice day next week, this is usually bearish in a market with a carry. Currently the corn March to May spread is sitting at a huge carry. So another thing to watch out for next week.

Often times a carry in a market is considered bearish. But I wouldn’t necessarily classify this carry as bearish.

For starters, we do have a massive inverse from old crop to new crop. ($4.75 Dec vs $5.05 May)

But we have also seen a ton of farmer selling. Which has impacted March corn the most. So the carry between March to May corn is probably only there because end users are covered right now, but not a few months from now.

Then we have the major USDA report at the end of March that is going to give us a first look at acres.

Bigger corn acres have already been somewhat priced in. Hence why Dec-25 corn has underperformed. But how big of acres?

If we get 94-95 then I don’t think the market is going to get an overly bearish reaction, but if that number is +96 million then it could definitely cause pressure.

For soybeans, less acres could be a very friendly factor (which I will touch on later in todays udpate).

Here is Bloombergs Pre USDA Outlook Forum estimates:

As for South America, the soybean growing season is 2/3's over so the market is going to focus on the next big thing.

Even if Argentina's crop shrinks, overall production in South America is still going to be a record no matter what. But the market is aware of this hence why beans have struggled for months.

For corn, the 2nd crop in Brazil is still a huge factor. The world balance sheets can simply not afford production losses in Brazil or the US for corn.

Here the world corn balance sheet minus China. Pretty much the tightest of all-time.

Brazil corn stocks are also their tightest ever.

Not much room for error.

Lastly there is the trade agreement rumors with China.

Even if a trade agreement does not happen, the most impressive thing about corn is that exports are some of the best ever.

This is with ZERO help from China.

Chart from Karen Braun

If you remember, the big boom in exports back in 2021 was almost entirely due to China purchases from the trade agreement etc.

Here is what corn exports excluding China look like.

They would stand at 17 year highs. Impressive and says alot about corn export demand.

Chart from Karen Braun

Hope for Soybeans?

Given the crazy price ratio difference between corn & soybeans, of course we will be getting less bean acres.

Here is the price performance for the past 365 days.

Corn is up +20%.

Soybeans are down -9%...

So what does this mean for beans?

Well, for months the narrative has been bearish. Brazil has a monster crop and the world situation is one of the most bearish of all-time. This has been known for several months.

But with this decrease in acres, we could very easily go from a very bearish situation to a not so bearish situation pretty easily.

No this isn’t a compelling story that will rally beans $1.00 next week. But this could shift the narrative on new crop beans.

Standard Grain brought this to my attention so I thought I'd run through an example with you guys.

For example, let's say harvested acres were 81 million.

Then let's say yield came in at 49 bpa.

If you did not change the demand numbers, you'd get a negative carryout.

Of course, that is not possible. So the USDA will have to change the demand numbers.

So let's say we cut export demand by a few hundred million from 1.80 million to 1.50 billion. (Can’t cut crush demand).

You'd still get a situation that is far tighter than it currently is.

The point is that soybeans could very well have a story of their own later on simply due to less acres here in the US.

The balance sheet could get tight enough to where exports will be forced to be lowered and prices will be forced to be elevated to ensure we aren’t exporting more.

So I would say yes, there is hope for new crop beans.

Today's Main Takeaways

Corn

Overall my bias still remains higher for corn towards spring & summer.

Short term however, some pressure would not be surprising with first notice day and the Ag Outlook Forum.

Fundamentally there is still a story.

The funds are near record long and won’t give up unless they see a game changing factor or unless the techncials tell them to do so.

Exports are well ahead of the USDA projections and should result in a bump in the future.

We are on pace to be +35% above last year.. yet the USDA only projects us to be +7% above last year. Massive difference.

Let's look at the charts.

First weekly corn.

We once again failed to break this key level for the 5th week in a row (blue line).

If we can get a weekly close above here, then the chart is wide open. But we still have failed to do so thus far.

Looking at May corn, we are sitting right above this new uptrend.

If we are lower on Monday then it likely results in a leg lower short term.

Level the bulls need to hold to stop the funds from puking their longs?

The $4.80 level (green box).

If corn broke below that, then the funds would have that technical reason to sell. As there is a massive gap of air to the downside below that level.

Looking at Dec-25 corn.

The multi-year downward trend from 2023 strikes again. As we rejected right off of it.

If bulls can climb above, it likely triggers more upside.

Next upside target is $4.84 (last target was $4.72)

We are still sitting in a solid uptrend so I don’t see any concerns right now.

Soybeans

Yes it is still hard to find a bullish story for beans right here.

But moving forward there are plenty of questions that need to be answered..

What happens if China agrees to a trade deal?

What is bean acres fall in the realm of 82 million?

What is the US doesn’t have a good growing season? As we will be going into planting season on very light subsoil moisture.

There are some well respected weather gurus who claim there is a 60% chance at drought and they confirmed that this dry fall and winter raises some possible concerns.

Here are the precip ranks to start 2025.

Overall, altough it is hard to be bullish right now I think the narrative for beans will eventually shift away from being super bearish.

I'd like to think we have more upside than downside here. With our current ceiling being around $12 and our floor being around $10.00 or so.

It's tough to tell anyone to go out and sell a bunch of soybeans so far below breakeven. Hence why we are being so patient especially on new crop beans. (I am only 5% sold on my generic sales tracker).

Despite all of the bearish headlines, beans have held in there. Brazil harvest is 2/3's complete, and we will likely be looking at less acres in the US with an entire growing season ahead.

Bottom line, I am not super bullish on beans here but I think the sky could look brighter for beans in the future.

Looking at the charts, the number #1 thing I am still watching is the 100 and 200-day MA's.

If we close above the 200-day, it shoud lead to the funds buying soybeans and help establish a trend higher.

This would be a big deal.. beans haven’t been above the 200-day since 2023.

On the other hand, if we break below the 100-day it likely drops us down into that green support box near $10.00

IF we did drop down to the $10.00 it would potentially set up a nice inverse head and shoulders pattern moving forward.

For new crop, next target is still $10.82 with a bigger potential picture target of $11.50

Just like in May beans, if Nov beans can crawl above the 200-day MA it could set a trend higher.

We rejected off of it back in May 2024 as well as on the recent highs a few weeks ago.

Wheat

Not going to go over much today.

I still think wheat has an unbelievable amount of upside, but it made sense to take advantage of this winterkill weather rally as come Monday most of the plains will be in the 60's.

If you missed Tuesdays sell signal: CLICK HERE

Moving forward, we still have bullish global balance sheets. Being the tightet in a decade.

Russia still has an awful winter wheat crop.

Realistically I think the world fundamentals are friendly enough to where we "could" see wheat trading substantially higher in the future. Perhaps in the realm of $7.00 even.

Looking at the charts, just going over KC wheat today as there is very little changes and the wheat market as a whole moves in tandem.

KC exactly topped out at that sell signal target.

I am seeing a potential bullish pattern forming on KC wheat. It is called a cup and handle pattern. You cannot confirm this pattern nor it's implied move until we break the recent highs. (attached example below).

As long as KC wheat holds $5.80 then there is no worries.

Cup & Handle Example

Again we cannot confirm this pattern until we take out the recent highs, however to calculate the target you take the cup depth and add that price range to the low of the handle.

Generic Cash Sales Tracker

Due to requests here is our generic cash sales trackers.

This does not include any hedge recommendations etc. Simply cash.

This is futures prices.

For old crop there is no percentages as we only recently started tracking our generic sell signals. Future new crop sales will have percentages as we continue to make sales.

This will be included at the bottom of every update.