Grains lower early Wednesday, livestock mixed.
Corn and Wheat See Profit Taking
Corn and wheat futures were lower early Wednesday seeing some profit taking after a higher close Tuesday says Darin Newsom, senior market analyst with Barchart. Corn and wheat added some risk premium Tuesday due to increasing tensions between Russia and Ukraine but will no additional geopolitical headlines the market set back. “Yeah, that and just the realization that geopolitics haven’t changed and the fundamentals haven’t changed in the markets,” he explains.
Corn Stuck With Big Demand But Big Crop
March corn was able to close above the 200-day moving average Tuesday but is back trading below it again on Wednesday with no concern about upfront supplies. Newsom says the corn market has been stuck in a trading range with record demand but also record supplies and that is also keeping a lid on the basis market currently.
“So that is keeping a lid on any big rallies in the market. “You know, bin doors are going to stay tight. There’s not going to be a lot of bushels moving to town. And if we can somehow keep a solid demand underneath the market, you know, we can see that in the May July spread. I think it’s covering something like 24, 25 percent calculated full commercial carry at yesterday’s close. So, I mean, and that’s a bullish level. If demand can stay strong, mostly on exports, but possibly also see an uptick and feed demand, I think that’ll be what keeps kind of a floor underneath this market,” he says.
More Concern About 2026 Corn Supplies
Newsom says the market is actually showing more concerns about 2026 supplies with possibly less U.S. corn acres being planted. “To me, there is still some concern about U.S. supplies as we look out towards next planting season for the U .S. for the 2026 crop, Not that the U.S. is going to run out of corn anytime soon, but available supplies might tighten up during the next planting season.”
Soybeans Drift With No China Sales Confirmed
There was talk overnight of more soybean sales to China as bids firmed nearly a dime in the Pacific Northwest. However, there was no confirmation in the form of flash sales Wednesday morning for a third day in a row. The bulls need to be fed daily and without that news the futures drifted back lower.
“We see what looks to be commercial activity overnight, and then nothing happens over the course of the day, for the most part. And so this tells us that there could be some Chinese business going on. The question is, is it just on the future side or is there some physical bushels being bought? My guess is there’s probably a few. Again, the U.S. is a secondary supplier. This is the time of year when US tends to make its sales. So the fact that we’re seeing a little bit of a bump in the PNW basis, again, not overly surprising. There are supplies across the Northern Plains. That’s where the U.S. basis tends to be the weakest. And so they’re moving to port and they’ll probably start moving over to China here in the not too distant future,” he explains.
China Buying Under the Radar
Newsom thinks though that if China is buying, they are likely securing smaller amounts of soybeans so the sales will go undetected as part of the daily flash export reports. “It doesn’t mean isn’t happening. It just means that it’s below reportable levels. And at some point, when the weekly export sales and shipments numbers ever get caught up, then we might actually see that there was some seasonal business being done.”
Markets Await FOMC Rate Cut
The markets are awaiting next week’s FOMC meeting where a 25-basis point cut in interest rates is expected. Newsom says this would likely pressure the dollar and be good news for agricultural commodities as it would make them more competitive on the world market place.
FOMC: New Sheriff in Town?
The financial markets have been trading mostly higher recently in anticipation of the Fed lowering interest rates but also with the anticipated change in leadership in 2026. President Trump is expected to nominate Kevin Hassett to head the FOMC which Newsom says would likely provide an open path for more interest rate cuts in the future.
Where is Crude Oil Headed?
Crude oil has been caught between the growing tensions between the U.S. and Venezuela and the possibility of peace in the Black Sea which would lower sanctions on Russian oil. Plus, OPEC plus has decided to leave production steady in the near future. As a result the crude oil market is still under $60 a barrel and Newsom says that plays right into the goal of the administration to lower energy prices to curb inflation.
Biden Administration Fuel Economy Standards Rolled Back
Newsom says the Trump administration is also set to roll back the Biden era fuel economy standards. He says this could have an impact on the silver market as less electric vehicles would stall the buying interest in that market due to lower demand. However, this change could also impact the biofuels markets with a push for more fossil fuels and less ethanol and other renewable energy policy support.
