BROCK MORNING COMMENTS
LEADING OFF: Grains were subdued but mostly weaker overnight, with generally favorable South American conditions hanging over the complex as traders awaited signs that China is actually working toward meeting the “trade deal” soybean purchase commitment spelled out by the United States. Corn was down 1 to 2 cents late in the overnight session, as were soybeans and wheat. Cotton was up 30 points, after making a fresh two-week low overnight, and rice was firm.
USDA did this morning report the first soybean export sale to China in a week: 462,000 metric tons (16.97 million bushels) for the current marketing year. That could underpin soybeans on the market’s re-open this morning.
For the financial markets, the next couple of trading days will be in preparation for the Fed’s meeting next week, which starts Tuesday and concludes with a Fed rate decision on Wednesday. A cut is almost universally expected at this point. The dollar index has been in retreat all week and made a five-week low yesterday, but since then has firmed up and it is higher this morning. Crude oil is flat. Silver, which has settled higher 8 of the past 9 sessions, is higher again this morning, although down from Wednesday’s all-time high. Copper is up 1.5% and has made a new all-time high. U.S. equity futures are pointed to a higher open. The big headline this morning is that Netflix will buy Warner Brothers for $72 billion.
The FAO Food Price Index was down in November for the third straight month, to 125.1 points, from 126.6 in October and the lowest since January, Reuters said. The November average was down 2.1% from a year earlier and 21.9% from the March 2022 peak after Russia had invaded Ukraine. Sugar was down 5.9% from the prior month, vegetable oils down 2.6%, and meat down 0.8%. But the FAO’s cereal price benchmark was up 1.8% from October. But there’s nothing bullish right now about the global environment for grains: In a separate report, FAO revised its global 2025-26 cereal stocks estimate to a record 925.5 MMT, reflecting in part increased wheat stocks in China and India.
CORN: The futures market’s pattern of falling one day and climbing the next continued for a fifth straight day on Thursday. The last 5 weekly closes for March corn have been between $4.37 and $4.47 3/4. While the market is seemingly headed nowhere fast, last week’s close was the highest on the weekly most-active corn futures continuation chart since mid-May, and March corn closed just under level that today. On a weekly chart, March corn would have to close below $4.25 to do significant damage, while a Friday close by Mar. above $4.50 would look very constructive technically.
Argentina corn planting was 44% complete as of Wednesday, up from 39% a week earlier as planting of second-crop corn has started in central and southern growing areas, the Buenos Aires Grains Exchange says. The Exchange rated crop conditions 79% good/excellent, up three points from last week.
No fresh demand news this morning, but demand remains the main driver of gains in corn. Weekly ethanol production hit an all-time high last week, current export inspections and lagging sales data for October remain robust, and USDA reported two flash sales yesterday.
SOYBEANS: Nearby January futures are working on a likely outside week down and are not far off of key nearby chart support at $11.13 1/4-$11.14 1/4. A breakout below that would likely bring a quick test of $11.00. January still has a possible downside objective of $10.60. Jan. has nearby chart resistance at $11.24 1/2 and $11.30 3/4 and would have to close above $11.42 1/4 to significantly improve its chart picture.
Brazilian soybean exports were up 64% in November versus a year ago, to 4.2 MMT, the government said Thursday. This strong pace of shipments occurred even after the U.S.-China “trade deal” announced in late October. While these shipments from Brazil were booked prior to that deal, all indications are that the pattern will continue. Industry group Anec projects that December soybean exports from Brazil will also be up sharply, by 90% to 2.8 MMT. For the full year, ANEX sees Brazil soy exports at 110 MMT, up from 97.3 MMT in 2024.
The Buenos Aires Grains Exchange estimated that soybean planting was 44.7% done, 9 points behind last year’s pace and 1.5 points below the 5-year average. The Exchange said waterlogged fields in central Buenos Aires province continue to hinder farmers’ access and delay fieldwork. The Exchange rated soybean crop conditions 61% good/excellent and 39% “normal,” little changed from a week earlier.
South American crop weather remains generally favorable, World Weather Inc. says. While southern Brazil and parts of Argentina will see continued drying into the weekend, timely rain is expected late weekend into early next week across central and northern Brazil and much of Argentina. This should improve soil moisture and crop conditions, especially in Brazil’s center-west and northern center-south regions. Some pockets of dryness may persist in Buenos Aires, La Pampa, and western and southern Rio Grande do Sul. But most of Brazil should receive frequent rain that supports strong corn and soybean development.
WHEAT: The market continues to lack direction in the near-term. Chicago wheat remains within Tuesday’s trading range of $5.29 ¾ to $5.41 in the March contract. Taking out that high would reinforce the bullish outside day up posted that day. Kansas City wheat posted a bullish outside day higher on Thursday, although that outside day was still within the trading range of $5.20 to $5.33 established Tuesday in the March contract. Minneapolis wheat, meanwhile, fell to its lowest level in more than a week on Thursday.
Crop prospects around the world are mostly favorable. France’s wheat crop was 96% good/excellent as of Monday, compared to 86% a year ago, France AgriMer said in its final crop progress report of the year. Planting is 99% done, and in France as across Europe, the early expectation is for a big harvest in 2026.
LIVESTOCK: The cattle complex carries continued upside momentum into this morning’s trade. Live cattle futures gained again with support from strong cash market expectations, which started to play out yesterday with trade in Nebraska at $218-220 live and $340 on a dressed basis, up in booth cases by $10 from the prior week. Southern Plains markets remained quiet although there were some bids at $220 in Kansas, which is the price cattle traded at last week. Packer margins were at $61 per head according to HedgersEdge, and have averaged $110.87 for the week. Margins have taken a hit with the mid-week tumble in beef prices, and could be further pressured with rising cattle prices this week.
Feeders also continued to rally, with January futures settling up $4.73 on Thursday and posting their highest close in nearly six weeks. It appears set to test the big gap on its daily chart at $340.50-$348.18. The CME cash feeder cattle index rose another $4.02 today to $341.80.
Lean hogs have also been on the rise, with most-active February hogs settling up 85 cents to $81.85, posting their highest close in 16 sessions. However, the market will have to push past its 40-day moving avg. near $82.00 to gain more upward momentum. It needs to close above its November high of $83.60 to confirm a major price low has been charted.
