fyi: the last 2 sections of this blog will always be key releases that are easy to find, as well as the hedge recommendations tracker slide.
#1 Grains & Soy Audio Commentary– Cattle & Soy Have Separated Themselves From The Other Ag. Commodities By Making 2026 Highs This Past Week: This Increases The Odds of An Early Year High In Both
for a good start on this weekend’s blog, the article below helps outline how i see the agr. sector the next month: it was done for the ohio country journal’s march edition…then, i’ll dig deeper in the following sections
#2 Soy Hedge Recommendations: I Am Fine w/Trusting Pres. Trump In His Trade Policies; I Am Not Fine w/Trusting China To Follow-Through w/Buying More U.S. Soy
soy hedge strategy for this week: #1 move to 100% 2025 cash sales #2 move to 50% 2026 cash sales–hta preferred to leave basis #3 roll bought puts protecting base prices up to improve floor & to move to 100% hedged in 2026 for brokerage clients.
i want to be very clear here: i want to leave upside price potential open for either s.a. weather or bigger renewable diesel demand in usda’s baseline projections; therefore, i don’t recommend either cash-only or brokerage clients be more than 50% sold as we see what the agricuture outlook forum shows us on thursday & friday.
it has been clear since the beginning of last year that the soyoil market has been building a greater diesel premium into it in my view: soyoil is closing-in on its highest levels since 2023, with “flashes” of upside in soymeal but keeping meal near its lower range of the past 1 1/2 years. it has been soyoil that has been the responsible product for the soybean push higher in other words.
the next 2 graphics show me that china’s actions in the political arena continue to contradict what the trade is expecting out of the us-china relationship: especially as it pertains to the agriculture trade relationship. the currencies are key, not the rhetoric as far as i’m concerned. and i wonder how much longer china will allow its currency to weaken against the us dollar given its multi-year distressed housing market economy curtailing domestic demand. i think this question is especially important given the speech given by sec. or state rubio this weekend in munich (video below)
#3 SA Weather Remains A Factor, But It Is Diminishing For Now…Argentina Still Remains The Biggest Question-Market On Production Potential For Now
#4a Because Of My Soy Export Concerns, The USDA’s Agr. Outlook Forum Next Week Becomes More Important: Including the Renewable Diesel Forecast/Outlook
the biggest reason for my extra soybean acres this upcoming season is (a) due to the near 99 mln. corn acres of this past year rotating back into soybeans; (b) the fact that usda usually notes as a factor in their acreage assessment what the nov. soy/dec. corn ratio is doing…and this goes back to the crop insurance base price being figured this month for both. note the circled portion of their outlook last year below.
as i said a couple of times this past week, i can trust pres. trump’s policies toward agriculture; i can’t trust china’s policy to buy u.s. soybeans…with this in mind, the renewable diesel domestic demand & u.s. soy acres take precedence to me: much more than exports, especially w/u.s. gulf soy prices still about $35/ton over brazil’s paranagua port
you will note that my 2026/27 crush for soybeans jumps 4.2% to 2.75 Bln. bu. in section #3 above. this is my increase for the renewable diesel next year. in the the eia assessment this month for renewable diesel above, we see they increase to .696 from .547–a jump of 27.2%. this is what i’m waiting to see for clarification from usda this week
#4b Is China Going To Buy 112 MMT of Soybeans From The World This Marketing Year? The Last Attache Report Says Not…Brazil Export Pace Agrees
we see by the december attache report to the left that the official My imports by china of 112 mmt disagrees w/the attache’s 106 mmt. in addition, we see in the january brazil attache report graphics below that china has been buying an extra 10% of brazilian soybeans so far this year, roughly. this suggests that they are likely stockpiling, not buying for demand-consumption. why? look at the hog price chart below–in the range of multi-year lows
#5 Cattle Commentary w/Recommendations As March Approaches–Because The Soy Audio Was So Long, I’m Going To Just Send This Out For Now & Update Tomorrow The Cattle…See Comments Below
seasonality for both april live cattle & may feeders is shown in the two charts above & below: i did the past 5 years, and then added 2014 & 2015 (remember, you can right-click the chart and open it in a new tab to make it bigger and more readable). these seasonal charts suggest to me that if we see a lower montly close in feeders especially this month, then march & april could be lower as well [note 2022].
the fats have clearly been the leader to the upside this past two weeks; we want to see the feeders perform better this week. will corn provide weakness to help the feeders go higher? or will corn find support from usda’s agr. outlook forum numbers and pressure feeders? i think this is an important part of why a “sell” signal in the charts should be considered to hedge into. my goal for april fats remains the gap up toward the old record-highs, as shown by the last chart.
#6 “BREAD-CRUMB” ANALYSIS– Major Blogs And/Or Reports-Updates In Case You Missed Them
#7 Hedge-Tracker Recommendations Slide
