MARKET UPDATE

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

Futures Prices Close

Overview

Another quiet day in the markets following the holiday weekend, as there hasn’t been much news for either side to chew on.

Soybeans showed some strength, continuing to fight off those recent lows. As we saw some strength in the soy complex.

Despite today's strength, soybeans continue to be pressured by ideal weather in South America and the looming potential effects of tariffs from Trump.

The near perfect weather in Brazil does make it hard for bulls to come up with a real story to justify prices drastically higher from here.

Along with corn, soybean demand has actually been relatively solid following the awful start. As bean exports are actually head of USDA pace now. So demand isn’t really an issue here.

The tariff fears are not what is keeping a lid on soybean prices. It is the thought that Brazil is going to have a monster crop. Because if they do, this is what the global balance sheet will look like.

World stocks the highest ever. World stocks to use ratio the 2nd highest ever.

Private groups have also continued to project this record crop.

We saw some news from Russia and Ukraine that they might add price floors to implement an absolute bottom export price and restrict some exports to slowdown food inflation. This is a friendly story, but the market has not reacted to it.

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Today's Main Takeaways

Corn

Not much new on corn. Very little news.

Overall, demand remains solid.

One argument bears try to make is that perhaps all of this export demand we saw from Mexico was entirely front ran as they wanted to buy before Trump got in office.

Yes this argument might have some marrit. But in all reality, they are buying more than last year but are not totally out of line with expectations.

Sales for Mexico last year were well ahead of pace and kept that pace all year. There was no Trump tariff news to suggest this pace couldn’t stay.

At this pace, Mexico purchases are up +1.3 MMT from last year.

Overall, not much else.

Demand is still the biggest story going for corn. Exports are great if they can continue along this relative pace. Ethanol production is at records which alone can add tremendous demand to the balance sheets.

Biggest thing I am watching here is the charts.

We are currently range bound in this symmetrical triangle. A bust above or below that blue triangle will dictate where we go next.

My first target to take off some risk is still that 200-day MA.

This is why that 200-day MA is so significant.

It has acted as a lid several times.

Hence why it makes sense for some to de-risk there.

March-25 Corn

Dec-25 Corn

Soybeans

Soybeans continue to cling on to those lows. As we have now bounced off that level over 10 times or so.

Overall, you still have to thread carefully here in soybeans.

There really is not anything to get super bullish on here if Brazil's weather stays ideal.

Even though there is plenty of downside risk, it doesn’t mean we have to come crashing down lower.

When looking at demand, this was one bearish argument not long ago. We had the worst new crop book of beans sales to China on record.

But after that start, we have seem demand get a pick up. Beans are actually somehow ahead of the pace to meet the USDA estimates and above last year's exports.

China buying is still lower than last year, but other countries have stepped up.

Many thought China would stop buying beans the moment Trump was elected.

We still have the looming "potential" effects of tariffs, but China didn’t just completely stop buying like some thought they would.

Chart from GrainStats

So demand isn’t the problem. Demand is somewhat holding this market afloat here.

The biggest problem is BY FAR Brazil.

A trade war doesn’t directly impact the balance sheets and nobody really knows how it will shake out.

But with Brazil's monster crop, you can directly see just how big of an issue this is.

Here is Brazil's current outlook. A tad drier than normal but nothing to worry about for now. Especially considering they've received abundant moisture.

Next 2 Weeks Rain

Seasonally, we do however go higher from here.

The past 5 years we have bottomed right around today and then went on to rally throughout the month of December. (Aside from 2023)

This is about the only friendly thing beans have going for them.

If you entered a long soybean position in mid-November and sold it on Dec 31st it would have been a winning trade the past 13/15 years. (2017 & 2023 were losers)

However, you have to keep in mind that this recent seasonal pattern does correlate to Brazil's weather season. If they do not get any scare at all, it could very easily wind up being like the US weather season this past summer. Where we simply do not get one and prices do not get that seasonal rally.

Past 5 Years

Moore Research Seasonal Pattern

The biggest thing I am watching is if we can hold these lows.

They are a MUST HOLD. If we break below, the implied move is sub $9.00

To negate this, we need to bust that downward trendline we have respected since May.

On the bright side, the indicators suggest a possible bounce here. But how high we go remains to be seen.

The stochastic bottomed and are turning up.

The MACD is on the verge of flipping bullish. Last time it happened we got that mini rally in November.

Wheat

Not great action in wheat as we fell well off our early highs.

We saw a small amount of strength with the weakness in the dollar, possible winter weather in the upper plains, along with that potential Russia demand story I mentioned earlier.

Overall wheat is really struggling to find a story to sway bulls or bears either way.

Russia raising price floors is a very positive potential sign, as Russia dumping their cheap wheat on the market was one of the biggest reasons wheat prices have sucked since the war.

Short term, it is anyone guess where we go from here. Bulls do not have a real argument to be made that prices should be drastically higher here soon.

But looking towards next year wheat still has potential.

We have one of the most bullish global balance sheets in a long time. Russia has seen plenty of issues with their wheat crops and those effects will pop up eventually.

Bottom line, I am cautious short term. Optimistic long term.

Looking at the chart, we do really still need to hold those lows.

If we do not, we could very easily go test that long term support line which could lie below $5.00. Something to be aware of.