MARKET UPDATE & VIDEO

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

Timestamps for video:
Tariffs: 0:00min
Ukraine Peace Talk 1:28min
Corn Exports & Ethanol: 2:42min
Corn: 3:17min
Beans: 5:55min
Wheat: 11:58min

Want to talk or put together a market plan?
(605)295-3100

Futures Prices Close

Yesterday's Back & Forth Discussion

In yesterdays update we had a little different format than usual where we had a discussion and went through some different questions.

If you missed it: CLICK HERE

We would appreciate some feedback and if you guys would like more updates similar to that one.

Overview

We are gonna keep todays update shorter than usual as there simply isn’t that much to add vs the past few days.

Wild price action today, at one point grains were all lower but closed in the green. Off today's lows:

Corn: +9
Beans: +11
Wheat: +21

As for tariffs, the only tariffs still out there currently are China and the EU.

We have not received an update on the China tariffs. Trump and China were supposed to have a call earlier this week to negotiate but it got cancelled.

There is rumors that China wants to propose a Phase 2 of the trade deal.

Phase 1 was signed in January 2020. In the deal, China agreed to by $200 billion worth of US goods ($32 billion of that was for ag products). This includes both corn & beans.

IF they agree to a Phase 2, I would have to imagine it would lead to a rally. However, I don’t think it will be quiet as bullish as last time. Simply given the fact that last time China needed grain due to their bird flu situation, COVID etc. But either way, this deal could force them into buying more US grain which would bump demand and lead to higher prices.

Ukraine & Russia Peace Talk

Today Trump's peace plan for Ukraine was leaked. In the leak he plans to have ceasefire by Easter.

"Why did wheat rally today if the war is ending? Isn’t that bearish?"

I wouldn’t say the war ending is bearish. If anything it could be bullish.

Ever since the initial rally from the war, wheat prices have continued to fall and fall despite the ongoing war. So the war escalation of course doesn’t really effect the wheat market anymore. It is old news.

However, there are 2 reasons why the war ending could be friendly:

1) Many people say that Russia has only continued to sell cheap wheat to fund their war. No war means no more cheap Russian wheat undercutting the rest of the market.

2) Due to the war, the US has immensely supported Ukraine. Including their agricultural sector. If we were to stop funding them, they might not be able to produce quiet as much grain as they are. Altough, this peace talk did include some form of still supporting Ukraine.

Either way, the war obviously hasn’t been bullish for years. So I can’t imagine this being bearish now.

Corn Export Sales & Ethanol

Export sales for last week were once again at the high end of the expectations.

Does anyone still believe this demand was front ran in anticipation of Trump?

Chart from Karen Braun

Here is the export inspections vs last year vs the 5-year average.

We are well beyond both.

I doubt the USDA raises exports in the USDA report, but it is an argument to made moving forward.

Either way, demand = great

Chart from GrainStats

Here is an ethanol production update.

Again just like exports, running well ahead of pace.

Chart from GrainStats

Today's Main Takeaways

Corn

Not much to update on corn. My bias still remains higher longer term.

Why are the funds so long?

They are long 350k contracts (probably closer to 400k nearing record long. New funds data is out tomorrow)

The world balance sheet is the lowest in a decade.

The funds look at this kind of stuff.

What happens if Brazil's 2nd corn crop or our crop in US has an issue?

The world situation could get tight fast.

Look at this monthly corn chart.

Corn has been green the past 6 of 7 months.

With 4 green months in a row. The longest winning streak since that 2022 rally that led to +$8 corn.

This chart looks amazing IF we bust that blue with a monthly close above.

This is resistance right here, but if we bust it the door to higher prices is open.

My big point of interest is $5.37 (38.2% of 2022 highs)

Here is that same chart on a the weekly.

Again, above the blue line and the door is open.

But be cautious, this right here is resistance. If we are going to fail, this would be the spot we probably do so.

Looking at Dec-25 corn.

We nearly tapped my 2nd target of $4.72

I do not know if we will alert a full blown sell signal, but I will personally be looking to price just a very small 5% to bring my total to 10% on the generic sales tracker (located at the bottom of the update).

Then I will likely not make any extra until $4.84 or so.

(Ideally I'd rather utilize old crop puts for my new crop rather than flat out sales as we have talked about several times the past few weeks. If you have questions on it shoot us a text or call: (605)295-3100)

US Farmer Oversold?

I read yesterday that it is estimated that the US farmer is 70% sold on their old crop corn.

If this is the case, this market will see less hedge pressure.

Where does the usual sell pressure come from? The US farmer.

With the usual seller being able to sell less, this should naturally lead to less sell pressure on a rally.

Soybeans

Soybeans continue to put up a fight despite the obvious bearish global situation.

But if we were going to $9 beans, we would’ve already been there by now.

I am being cautious that typically this is about the time of year where that Brazilain harvest could start pressuring the market.

Brazil's beans are also around $40/ton cheaper than US beans on the global market.

Unless the US and China come to a trade agreement, Brazil is going to steal a lot of export business away from soybeans.

Despite the known bearish factors, Brazil having a monster crop, and soybeans having the 2nd most bearish global balance sheet ever.. the funds are long soybeans.

Long for the first time in over a year.. maybe there is more to the story that none of us know? Or maybe I am just being optimistic.

Bottom line, I am not crazy bullish soybeans but I'm not really bearish on beans either. If we get a Phase 2 trade agreement done with China then I'd lean a lot more bullish.

I am just looking to take advantage of opportunities when we get them.

Looking at March beans, first point of interest is still the black downward trendline.

If we bust above that, $11.35 is the next target.

Looking at new crop, my next target is still $10.82 (50% of May 2024 highs).

Personally, for my generic sales tracker I will likely be looking to price just a small 5% there. Bringing my total to only 10% sold just like corn.

A bigger picture target is still going to be around that $11.50 area.

It is the implied upside move from this inverse head & shoulders.

It is also 78.6% to the May highs.

If we somehow can crawl up there, I will look to be a lot more aggressive. Another 75 cents in new crop beans sounds like a stretch given the bearish tailwinds, but it is possible if the right things fall into place.

We still have a US growing season, potential trade deal, and likely less US acres this year.

Wheat

Wheat is finally catching a bid.

As I have said for months, I think wheat is undervalued.

I am going to keep today's wheat section short as I have went over all of the fundamental reasons why I am bullish on wheat in my past few updates.

First let's look at the daily chart for March wheat.

We finally broke the $5.84 resistance.

I think this should open the door to $6.20 ($6.00 minimum)

$6.20 is 38.2% of the May 2024 $7.73 highs. So that is my next target.

That would be a decent spot to take a some risk off the table and we will likely be alerting a sell signal if it hits. That would also be +$0.96 off the recent lows.

Looking at the weekly chart, we could run into some resistance around $6.00

Which is that black neckline.

A break above that should lead to more upside.

Fun fact: this is the strongest weekly candle (5.00%) since the May rally.

Looking at KC wheat, we also got that break out.

Next target is $6.30 (38.2% of May highs)

MPLS wheat still has resistance at $6.30, but both KC and Chicago took out their resistances.

First target is also 38.2% of the May highs at $6.63

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.