Turnaround Tuesday did show up, led by soybeans.
February 3, 2026
As I deduced in yesterday’s newsletter, a turnaround Tuesday was highly probable today, with soybean oil and soybeans getting a boost from a positive crush number yesterday. Not only was the crush just above expectations, but soybean oil stocks were revised lower back in the November numbers. This led to gains of over 1.50 in soybean oil. The OMB has completed scoring of 45Z guidelines, and we should hear the results this week. It’s anticipated that the tax credit for green diesel producers will bump from $0.32/gallon to $0.64 while renewable diesel producers will see $0.53 per gallon.
A sharp rebound in metals today (gold up over $300/ounce, with silver gaining $11.50) after a two-day washout is helping to bring back risk-on action, which has index funds reconsidering their short exposure in some of the grain contracts they are prevalent in.
South American weather, more importantly, Argentina, is again seeing some firms trimming back their expectations for Argentina. As for the fourth week in a row, we will see crop deterioration, as podding is underway, and rains continue to remain widespread and disappointing showers. Have no fear, rain will be here in seven days is starting to become old news. Widespread showers are again expected this week.
Demand continues to remain underestimated in the corn market, while the soybean crush has domestic buyers helping make up for soybean sales, you wouldn’t know that, as headlines still capture market participants crying about Chinese demand that is still lower than in at dammit lost a bunch data back it was nice stuff and I rebuilding in here prior years. The December crush was 230 MB while soybean oil stocks were trimmed back to 2.18 Bil pounds. In wheat, year-to-date sales are 18% above last year and are already 88% of the yearly estimate. Russian wheat values are firming and have gained $2.00 a MT in the past week as harsh weather disrupts Russian exports.
Yesterday’s sharply higher cattle market was more of risk-on buying, putting the market back to where it was Friday at 10:00 a.m., when April cattle were trading just below 240 as the cash trade developed in the country at 240. Meanwhile, March feeder cattle were trading at 366 before getting pummeled below 360 ahead of the close as the trade was “throwing the baby out with the bathwater”. Yesterday was more of a realigning the trade back to where it was prior to the report. The Cattle Inventory report was friendly and supportive, but note that the dairy industry is growing, which has been a new source of beef from feedlots. The dairy industry is becoming a beef source, offsetting losses from milk.
Yesterday’s cash feeder index gained $3.72 and is now at $374.41 and is within dollars of last fall’s record high. Packer margins are at their worst losses since January 2013. The cattle market is supported by low fed cattle numbers and beef stock supplies, which help when outside markets attempt to trigger corrections. Hedging currently is about Black Swan events, and February/March is known for Black Swan hunting season.
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