Grain Markets and Other Stuff

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🌱 China & US Soybeans

China is considering boosting US soybean purchases. In a Truth Social post Wednesday, Donald Trump said China may raise its current-season buying target from 12 mmt to 20 mmt, sparking a sharp rally in soybean futures.

That said, it’s far from certain those additional purchases actually happen. After recently fulfilling its initial commitment, China has shifted back to cheaper South American supplies. Brazil is on track for a record soybean crop, keeping Brazilian prices attractive during the heart of their export window.

China has so far purchased 9.65 mmt of US soybeans for this marketing year, with a large share still unshipped. Trump’s comments imply potential additional buying before the August 31 marketing-year end — but the big question remains:
➡️ Will China really buy and ship US soybeans during peak Brazilian export season?
➡️ Are we headed toward a rare contra-seasonal export program tied to trade tensions?

Price action suggests optimism — even as many traders and analysts remain deeply pessimistic. 

🚜 Farm Crisis Concerns Grow

Former US farm leaders and lawmakers are sounding the alarm on the worsening farm economy. In a letter to the Trump administration, former US Department of Agriculture officials and industry leaders warned of a potential “widespread collapse of American agriculture.”

They cited rising input costs and abundant global grain supplies that have pushed prices low enough for farmers to lose money three years in a row. The Federal Reserve Bank of Kansas City reported that average farm operating loan sizes jumped sharply last year.

While $12 billion in Farmer Bridge Assistance payments are set to go out soon, most agree the aid will only cover a fraction of producer losses.

🌽 Ethanol Production Slumps

US ethanol production fell hard last week, driven by plant slowdowns tied to high natural gas prices, limited availability, and severe winter weather. Output dropped well below the prior week and last year’s levels.

Ethanol stocks declined, while margins actually improved across much of the Corn Belt. According to Reuters data, margins range from modestly negative to modestly positive when factoring in corn, DDGs, and inputs. 

🐄 Texas Braces for Screwworm Threat

Texas ranchers are preparing for a potential return of New World screwworm. Since late December, 20 cases have been confirmed in Tamaulipas, Mexico — just south of the Texas border. The threat prompted Greg Abbott to issue a disaster declaration to unlock state resources.

Screwworm could cost Texas cattle producers hundreds of millions and hit the broader state economy even harder. The USDA plans to release glow-in-the-dark sterile flies in northern Mexico and south Texas, but full eradication would take years. Meanwhile, the continued ban on Mexican feeder cattle imports is adding further support to cattle prices. 

🌾 Corn Flash Sale

USDA also reported a flash sale of corn Wednesday. Exporters sold 130,480 mt to unknown destinations for 2025/26 delivery. Total accumulated corn sales are running well ahead of last year’s pace.

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🏛️ 45Z Clean Fuel Tax Credit — New Guidance
The US Treasury Department and IRS released long-awaited proposed guidance on the 45Z Clean Fuel Production tax credit this week. Biofuel and agricultural groups largely welcomed the rules, citing improved clarity after years of delays.
Key takeaways from the proposal:
Fuels produced after December 31, 2025, must use feedstocks grown exclusively in the US, Mexico, or Canada
The 45Z credit is extended through 2029
The special SAF credit rate is eliminated for fuel produced after January 1, 2026
The indirect land use change (ILUC) penalty is removed
A 60-day public comment period is now open, with a public hearing scheduled for May 28

🧾 45Z — Important Context & Clarifications
45Z was enacted under the Inflation Reduction Act of 2022, but implementation has been repeatedly delayed
It is a clean fuel production credit, claimed by biofuel producers (ethanol, biodiesel, renewable diesel, etc.)
This is not 45Q, which applies to carbon capture and sequestration
In most cases, plants can claim either 45Z or 45Q—not both
Non-SAF fuels can receive up to $1.00 per gallon
Only a limited number of plants claimed 45Z in 2025
Plants are now preparing for 2026 production, though rules remain proposed
There is no direct payment to farmers—plants will decide how low-CI premiums are shared
Treasury plans to release a Feedstock Carbon Intensity Calculator (FD-CIC) to address farming practices

🚜 US Farmer Sentiment Slides
Farmer sentiment dropped sharply in January. Purdue University’s CME Group Ag Economy Barometer showed:
A steep decline in current conditions and future expectations
Nearly 60% of farmers expect bad financial times over the next year
Long-term pessimism rose meaningfully
Concerns about US agricultural exports increased
This highlights the difficult backdrop facing producers even as policy clarity improves.

🇧🇷 Brazil Ethanol Production Outlook
Brazilian ethanol production is expected to rise this year as-
Ethanol prices improve
Sugar prices weaken
New corn ethanol plants come online
A large sugarcane crop boosts output
StoneX projects strong growth, with corn ethanol production jumping sharply. This could push Brazil toward higher ethanol exports, and corn usage for ethanol may reach a record share of production.

🇨🇳 China’s “No. 1 Document” & Food Security
China unveiled its annual rural policy blueprint aimed at boosting food self-sufficiency. The plan emphasizes:
Higher grain and oilseed production
Diversified agricultural imports
Reduced reliance on traditional suppliers like the US and Canada
Expanded sourcing from South America and the Global South
New quotas on beef imports and tariffs on EU dairy
Increased investment in agricultural innovation

₿ Bitcoin Update
Bitcoin has fallen to its lowest level since November 2024, pressured by:
Liquidations of leveraged positions
Weak sentiment in crypto derivatives
Broader financial market volatility
Despite some institutional interest, everyday investor participation has slowed, leaving Bitcoin under continued pressure.

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🇺🇸🇮🇳 US–India Trade Deal
The Trump administration announced a trade agreement with India that reduces tariffs on Indian imports into the US from 25% to 18%. In exchange, India agreed to remove tariffs and trade restrictions on US goods and halt purchases of Russian oil.
India also committed to purchasing more than $500 billion of American goods, including agricultural products. However, key details remain unclear, including when the deal takes effect and which specific products India will buy.

🌽 Grain Markets
Grain futures extended losses on Monday. The March 2026 corn contract fell roughly 3 cents to near $4.26 per bushel, while March 2026 soybeans slipped about 4 cents to around $10.60 per bushel.
Wheat futures also ended lower, pressured by concerns about frigid temperatures across the US Plains and the Black Sea region.

🚢 Export Inspections
US corn inspections declined last week but remain strong overall. The USDA reported inspections of 1.1 million metric tons for the week ending January 29, down 27% from the prior week and nearly 10% below the same week last year.
Soybean inspections came in near the high end of expectations at 1.3 million metric tons. That figure was slightly lower week-over-week but well above last year’s pace, with China accounting for roughly 56% of total shipments.
Wheat inspections totaled 326,828 metric tons, near the top of expectations. Shipments were lower versus the previous week but significantly higher than the same week last year. 

🥩 Tyson Foods
Tyson Foods reported another difficult quarter for its beef segment, posting an adjusted operating loss of $143 million. Tight cattle supplies continue to push costs higher, and Tyson expects those conditions to persist through this year and into 2027.
In contrast, Tyson’s chicken segment posted year-over-year sales growth, marking a fifth straight quarter of volume gains. The company expects chicken to be the preferred protein this year due to affordability. 

🇧🇷 Brazil Soybeans
Brazil’s soybean harvest continues to advance steadily. AgRural estimates that 10% of the crop had been harvested as of last Thursday, slightly ahead of last year’s pace.
StoneX raised its Brazilian soybean production estimate to a record 181.6 million metric tons, while Celeres lifted its forecast to 181.3 million. 

🚜 Farm Aid Talks
Lawmakers continue to push for additional farmer assistance. Michigan Representative Kristen McDonald Rivet said more aid is needed to help farmers cope with high input costs and tariff-related disruptions.
She emphasized that federal aid is a temporary fix and that farmers ultimately need more reliable markets and predictable trade policy. McDonald is a co-sponsor of the proposed Farm and Family Relief Act of 2026, which calls for nearly $30 billion in aid. She believes Congress will approve the recently discussed $15 billion package by the end of the month.

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🌽🌱 Grain Futures Recap

Grain futures finished lower on Friday, pressured by profit-taking and a rebound in the US dollar.

March corn slipped by nearly 3 cents to $4.28

March soybeans dropped 8 cents to $10.64

Wheat futures also declined, with Chicago March wheat down about 4 cents to $5.38

Markets also continue to price in strong Brazilian crop expectations, while traders assessed the impact of severe cold across the US Plains earlier this week and frigid temperatures in Ukraine.
👉 See grain charts below

🥇🥈 Gold & Silver: Historic Volatility

Precious metals suffered historic one-day losses on Friday.

Gold futures fell sharply

Silver posted its worst daily decline since 1980

The selloff followed President Trump’s nomination of Kevin Warsh as the next Fed Chair, which eased concerns about central bank independence and sent the US dollar sharply higher.

Longer term, metals may still find support from geopolitical risks and trade uncertainty, but Friday was a major reset.
👉 See gold, silver, and Dollar Index charts below

🏛️ Federal Reserve Update

President Trump officially selected Kevin Warsh to succeed Jerome Powell as Federal Reserve Chair when Powell’s term ends in May.

Warsh has historically been a policy hawk

Recently shifted toward supporting lower rates

Viewed by markets as more inflation-focused than other rumored picks

One analyst summed it up:

“Because Warsh has been a policy hawk his entire life, his newfound dovishness looks very suspect.”

👉 See Dollar Index and Bloomberg Commodity Index charts below

📊 CFTC Commitment of Traders

The Commodity Futures Trading Commission released its weekly COT report.

For the week ending January 27, funds were net buyers across major ag markets:

Corn

Soybeans

SRW wheat

👉 See Fund Tracker charts below

🚜 Farmer Assistance Update

Additional farmer aid remains under discussion in Washington.

According to John Boozman, the proposed $15B package was excluded from the current spending bill

Aid could still move forward as a standalone bill or disaster relief add-on

The $11B Farmer Bridge Assistance program is still scheduled to be distributed by February 28

🐄 Cattle Inventory: Historically Tight

The USDA cattle inventory report confirmed the smallest US herd since 1951.

Total herd: 86.2 million head

Beef cow numbers declined again

Slight uptick in replacement heifers, but not enough to signal real expansion

Bottom line: structurally bullish for the cattle market with no clear signs of herd rebuilding.

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🥈 Precious Metals Volatility

Silver futures were slammed this morning, with the nearby March contract down sharply in early trade. Gold also moved lower. Some traders are pointing to speculation around an imminent Trump pick for the next Fed Chair as a possible catalyst. Regardless of the reason, the size and speed of the move has grabbed everyone’s attention.

🎰 Prediction Markets & CME’s Next Move

The CFTC says it plans to update prediction-market rules, aiming to provide more regulatory clarity while supporting “lawful innovation.” Chairman Michael Selig confirmed the agency will withdraw a prior proposal that would have banned sports- and political-related contracts.

Platforms like Polymarket and Kalshi continue to grow rapidly, and CME is now partnering with FanDuel in the prediction-market space. With CME already planning 24/7 crypto derivatives trading, some believe this is a stepping stone toward round-the-clock trading in traditional commodity markets—an effort to avoid losing market share to online betting platforms. 🎲

❄️ Ukraine Cold Threat & Wheat Support

Extremely cold temperatures are forecast across much of Ukraine early next week, with readings potentially plunging well below zero. A large share of the country’s winter wheat crop currently lacks protective snow cover, raising winterkill concerns. These risks helped support wheat futures as traders also assessed lingering impacts from last week’s U.S. winter storm.

🌱 Soybeans Ease on Brazil Supply

Soybean futures softened as Brazil’s harvest ramps up and expectations build for a record-large crop. After completing initial U.S. purchases, China is expected to shift more demand toward Brazilian supplies. A weak U.S. dollar, however, continues to provide underlying support by improving export competitiveness.

🚢 Weekly Export Sales

U.S. corn export sales slowed from last week’s near-record pace, while soybean sales also declined. Wheat sales came in near the upper end of expectations. Japan was the top buyer for corn and wheat, while China led soybean purchases.

🛢️ Oil Rallies on Middle East Risk

Crude oil prices surged amid rising U.S.–Iran tensions. Markets are reacting to fears of supply disruptions, particularly the risk of instability in the Strait of Hormuz, a key global oil chokepoint.

🌧️ US Drought Update

USDA’s latest drought monitor showed limited improvement across much of the Corn Belt due to frozen ground conditions, though some areas did see relief. Drought conditions worsened in parts of the High Plains.