Yesterday’s COT report shows corn longs have turned around 600,000 contracts from their August short.

This morning’s grain trade has a light Turnaround-Tuesday going for soybeans and corn while wheat tries to find traction on further short covering from yesterday’s trade. The COT report was released Monday afternoon, delayed from its normal Friday release, due to Jimmy Carter’s funeral on Thursday. It showed speculative interest, pushing their longs in corn contract the 310,000. I had discussed back in August that the funds would swing their short position from a net 300,000 short 600,000 contracts by the early part of 2025, and they have achieved that. This is making many players nervous that recent strength is at risk if a negative event is thrown at them. It’s not uncommon for index funds to go long 400,000 contracts as they did in 2020 and 2021; it just heightens the volatility for swings to increase.

Soybeans are stalling as they trade near the November high of 1055, and weather forecasts maintain the prospect of rain next week, but currently, it is dry and hot with temperatures in the upper 90s to lower 100s. Temperatures look to ease next week to the upper 80s/low 90s, with showers in seasonal temperatures expected to return. Range a return next week with the prospect of .3-1.50″ with 40-50% coverage and then further totals developing in the week two forecast of .5-2.00″. Otherwise, losses will start to be experienced in the Argentine soybean crop.

In the soybean trade, despite the cuts in the US supply report of 100 million bushels, the trade is still focused on combined world supplies out of South America, with many anticipating the Brazilian soybean crop will come in above 170 MMTs, which can help mitigate a loss of 5-10 MMTs out of Argentina. Getting soybeans to push above 11.00 would require substantial cuts in the Argentine crop into February, a large drop in US acreage, and weather troubles this coming summer.

Live cattle and feeder cattle futures pushed lower yesterday after they failed to attack last week’s highs in early morning strength. Yesterday, a small number of cattle reportedly sold in Kansas at $200, which was steady with last week. Light dressed trade was also at $320, and Iowa, which would also be steady. The trade was thin and under 1000 head. Box beef prices had choice picking up $0.51 while select jumped $3.43. The choice/select spread narrowed to a $15.78 choice premium. The market is extracting holiday premium in the choice cutout value, while select remains supported by tight supplies.

The COT report ending January 7 showed that funds bought 14,261 contracts against 12,592 contracts commercially sold. The fund length is now in 143,004 and 56 contracts which is the largest since April 2019. This continues to raise market volatility as the markets searches out more elevated prices awaiting a slowing of demand