BROCK MORNING COMMENTS
LEADING OFF: Grains markets traded higher throughout the overnight session, seeing light follow-through after Monday’s strong start to the week, but the rally tapered off leading into this morning’s break. Corn is flat, as is wheat, while soybeans are up 3 to 5 cents with support from fresh Chinese buying. The cotton market is showing more conviction and is up 60 to 70 points, as the March contract has finally broken above the 65-cent area to its highest level in nearly two months.
In outside markets the dollar index is up slightly, and Dow futures are flat. Crude oil is up 40 cents and gold is up $20, as the situation in Venezuela continues to have a muted market impact. One big mover today is natural gas, which is down 3 to 5% amid warm weather forecasts for the U.S.
China has bought another six cargoes of U.S. soybeans this week totaling about 600,000 metric tons, Reuters reports this morning. It cited unnamed traders who said that brings the total purchases to about 10 MMT, leaving only about 2 MMT to be bought between now and the end of February to reach the “trade deal” target of 12 MMT. Even with those purchases, USDA exports are still behind for the marketing year. But the purchases may have helped drive soybean’s strength yesterday.
Yesterday’s wave of buying in the grain and oilseeds complex was also likely tied to fund repositioning to start the new year. We would not be surprised to see a further wave of fund buying show up over the next couple of sessions. Traders are also covering short positions ahead of next Monday’s key USDA Crop Summary and Grain Stocks reports.
CORN: Although weekly exports yesterday weren’t impressive, demand remains a driver of this market as the trade looks ahead to next Monday’s USDA report with expectations of an increase to exports. Monday’s action was very strong technically, with futures finishing near their session highs. Nearby March and May futures charted large bullish reversals off of 11-session lows and posted their highest closes in 6 sessions. March futures now have nearby chart resistance at $4.45 1/2 and nearby support at $4.36 1/4. The market has built a strong band of support at $4.34 1/2-$4.36 1/4 and we do not expect to see it trade lower. Key chart resistance for Mar. is up at $4.53-$4.57 and a breakout above $4.57 would likely mark the start of new upward move that could take it to at least $4.70.
SOYBEANS: As noted at the top, China has made a sizable purchase of U.S. soybeans, and USDA confirmed a portion of that purchase this morning, reporting a flash sale of 336,000 metric tons to China. The last flash sale to China was on Dec. 30 and before that on Dec. 22.
Monday’s rally strongly suggests all of the bad fundamental news has been factored into the soybean market for now. Ideas USDA will lower its estimate of the 2025 soybean crop likely helped support prices Monday, along with the China purchase assuming that some traders were aware of it. Going forward, though, the most supportive factor for soybean prices is likely to be prospects for U.S. acreage to stay low this year.
Meanwhile South American conditions remain largely favorable, particularly in Brazil, where most areas will see a good mix of rain and sunshine over the next 10 days according to World Weather Inc. The bigger concern was and remains Argentina, particularly southern Argentina, which will continue to see net drying conditions through at least the weekend. But World Weather notes that other areas of Argentina will get timely rainfall “with central areas to get significant relief from recent drying late this week and into the weekend.” So while dryness in southern Argentina may continue through mid-month, as of now there is still no sign of that dryness migrating into central growing areas, which would be a much bigger issue.
Brazil soybean shipments hit a record high of 108.68 MMT in 2025, according to data from shipping agency Cargonave on Monday. The total soybean shipments of 108.68 MMT were up 11.7% from 2024. Soymeal exports also hit a new record high of 23.07 MMT, up slightly from the prior year, while Brazil corn exports of 4 MMT were up nearly 4 MMT from 2024.
WHEAT: Futures traded a very tight range overnight and did not see the strength shown in corn and soybeans. Yesterday’s soft weekly export data reaffirmed the challenge of ample world supplies and increasing competition globally. The situation between Ukraine and Russia continues to show little if any improvement, but the wheat market has not appeared reactive to Ukraine headlines in recent days.
Hard red winter wheat areas in the central and southern Plains remain mostly dry, with only one weak weather system expected late this week, World Weather Inc. says. That disturbance may bring light rain or wet snow, mainly benefiting eastern areas, while west-central and southwestern regions are likely to see little meaningful moisture. Any short-term soil moisture gains will fade quickly as warmer, drier weather returns next week. Soil temperatures remain warm enough to raise concerns about limited new growth in Oklahoma and Texas, though brief colder conditions with frost and light freezes late this week should restrain development. Overall moisture deficits persist, with no significant relief expected until at least mid-January.
LIVESTOCK: Lean hog futures put to rest the notion that the market was “toppy” with gains of 23 cents to $2.40 on Monday, led by nearby months. February futures posted their highest close since Oct. 13. But February futures have premium to a declining CME cash lean hog index, which may limit further buying interest. And the composite pork cutout value yesterday afternoon was 73 cents lower, which may take some of the air out of the futures market today.
