Monday January 20, 2025

• The grain markets were able to close in the green on Friday.
  • Soybeans were able to make up for Thursdays loses.
  • Old crop corn was finally able to push over the $6/bu cash price.
• Rains remain in the extended forecast for the dry areas of Argentina and southern Brazil which contributed to the sell-off on Thursday.
• It seems the market was able to make its reversal on Friday after reports that Trump and Chinese president Xi held constructive talks. Trump called the talk “a very good one” and went on to say “It is my expectation that we will solve many problems together, and starting immediately.” Both Xi and Trump are hoping for a positive start to China US relations.
  • The hopes for a quick agreement between China and the US including a possible trade deal helped corn and soybeans rally. 
• China made a few purchases of US soybeans last week. Brazilian beans are cheaper but they do not store well. China continues to pay extra for US beans to go into their reserves.
  • See the chart below for the price differences between US, Brazil, and Argentina beans.
• China may have incentive to pay extra for US beans going forward in exchange for lower or no tariffs on consumer goods from the US. If this agreement were reached it would be short term (the 4 years Trump serves) but could help salvage the US soybean market. 
• Wheat has stayed as a follower of soybean and corn prices with no fundamental reason to sustain a rally.
• The market has been headline driven and will most likely remain so for the weeks ahead. As Trump is sworn in this afternoon we are expecting to see some volatility in the market.