New weekly highs for soybeans overnight. Traders challenge the USDA's soybean carryout estimates.
February 12, 2026
Soybeans lead overnight gains by gapping higher from yesterday’s strong close, as it was confirmed yesterday afternoon that China and the US will roll back tariffs likely ahead of the President. Trump’s visit to China is set to arrive on March 31, which just so happens to be the day for our first look at acreage intentions in the US. This agreement is a one-year truce. This pushed soybeans into double-digit gains overnight and breached last week’s high before stabilizing at elevated levels overnight.
China has been replacing damaged corn supplies by having already bought sorghum from the US since November and barley from Australia. It will be long; this could also become US corn in March.
It is February, and we continue to average out revenue insurance, with soybeans leading the way. The current new-crop price ratio is 2.4:1, and those who were not committed to fertilizer last fall will bring the interest into beans. Also, many analysts are questioning the USDA’s crop report on Tuesday about soybean carryout. No other importers are backing away, and we also have a soybean crush running well above USDA estimates. Leaving their carryout closed unchanged on the early week number, as many again stated that the USDA is poor at estimating demand. The carryout for soybeans is obviously much lower than what they’re reporting, and the market is saying so.
Reports from Brazil indicate that, due to excessive rainfall, quality issues are emerging. In Mato Grosso, some locations are rejecting low-quality beans because they are already at their limits for receiving and blending. Meanwhile, more rain is forecast for Brazil, complicating harvests and further delaying critical corn planting in the safrinha area, risking pollination into the warmer, drier season that begins in May. Unfortunately for southern Argentina, we are now rolling into the sixth week of disappointing rains when plentiful amounts have always been forecasted to arrive.
Technically, soybeans have made another new weekly high over last week, and continue to elevate their valuations, keeping soybeans on target for 12.00 for the July or possibly May contract. Soybean meal has gained recent strength on crush, as soybean oil has become more mature in its rally. We are targeting a 12.00 range for old crop sales and 1145-1150 for new crop bean sales. Corn and wheat have become tagalongs, but China’s interest in sorghum and barley for feed, will likely extend to corn, tightening the world balance sheets.
After struggling for several sessions, cattle and feeder cattle recovered yesterday with April cattle closing above the critical $were 240 range. It appears that live cattle this week will be all steady if not higher, as cattle weights have declined. Yesterday, the cash feeder index picked up $0.53 and is at $374.36, continuing to hold the premium above the feeder cattle board. Meanwhile, boxed beef prices are drifting, putting more pressure on packer margins.
The expiring fed cattle in a few weeks is carrying a $2.00 premium to April, which held in yesterday’s trading action. Momentum from yesterday’s April closing should allow for a retest of 244. Meanwhile, March feeder cattle have just under 50 days to align themselves with the cash index, which is $7.00 above yesterday’s close. March feeders will likely rechallenge the low 370 range, but there is a reluctance for the board to chase the excitement that’s at the sale barns.
As bull markets age, contracts always have to climb a wall of worry, as no one wants to get caught buying the high. They leave that to bullish cattle buyers to purchase the highest-priced unhedgeable pen. The musical chairs of buying too-high-priced feeders that work out will someday again catch someone who can not get a chair. That’s just the way it works, so hedging is always difficult at this time until a Black Swan event surprises the market. It’s not the truck you see coming that hits you; it’s the truck you don’t see.
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Past performance is not indicative of future results. The information contained in this report is intended for informational purposes only and is the opinion of the writer and may change at any time. This information was compiled from sources believed to be reliable to Heartland Investor Capital Management , Inc. but accuracy cannot be and is not guaranteed. There is no warranty, expressed or implied, in regards to this information for any particular purpose. There is SIGNIFICANT RISK of LOSS involved in trading futures and / or options on futures and may not be suitable for all investors. Investors should consider these RISKS and evaluate their suitability based on their financial conditions. No one should ever consider trading futures or options on futures with anything other than RISK CAPITAL . NO LIABILITY on the part of the author exists for any trading loss you may incur in the use of this information. The information contained in this newsletter is privileged, confidential and protected from disclosure. Any further disclosure or use, distribution, dissemination or copying of this message or any attachment is strictly prohibited. Provided by Heartland Investor Capital Management, Inc. a registered CTA with the NFA, of which Eugene Graner is principal. This entity is a separate legal entity from the Introducing Broker Heartland Investor Services
