Turnaround Tuesday is right on time.
March 3, 2026
Grain futures are higher this morning, as we said in yesterday afternoon’s newsletter, a turnaround on Tuesday was likely. Despite yesterday’s selling, Friday’s lows were never exceeded, so yesterday became a higher high with a higher low on the daily bar charts. Taking a chance in the Strait of Hormuz, a drone impact on the US Embassy in Riyadh, and Iran expands six strikes on the oil energy infrastructure, with more oil hubs getting hit with drones. This has crude oil pushing higher through Monday’s resistance, with diesel fuel values up 14% in one day.
Equity markets are sharply lower ahead of the open, and that risk-off tone is pushing capital into alternative assets, including agriculture. A strong move higher in energy is also lending support to corn and soybeans through the renewable fuels link. Higher crude prices tend to lift biofuel margins, which in turn tightens the outlook for feedstock demand.
Weather concerns in South America are gaining a little more traction as analysts begin trimming crop projections. Attention is centered on Brazil’s soybean crop. Even though production is still expected to set a record and run about three percent above last year, exports could slip if domestic consumption continues to expand. January crush data showed record soybean processing and a robust ethanol grind on corn, both of which are supportive this morning.
The larger issue hanging over markets is the developing conflict between the United States and Iran. While it does not directly change grain supply and demand, it absolutely affects price direction through energy costs and overall economic sentiment. If crude continues to climb, the inflation narrative could intensify, pressuring equities and consumer spending. That fear is weighing on some markets, but it is also drawing risk-oriented buyers into tangible assets, including commodities, including the ag sector.
Also supportive of the soybean trade is the fact that envoys from the US and China are expected to meet in mid-March to prepare for ongoing trade negotiations. Pres. Trump’s meeting with the Chinese Pres. Xi, on March 31, remains on track. This is counter to what many bears were saying, and that is China would now walk away from the table, given the recent attack on Iran. The reality is, Trump has taken away Venezuela and Iranian oil from China, which they so desperately need, and Pres. Trump has become a broker of oil to China, giving him another edge over China at the table.
Live and feeder cattle futures are called sharply lower this morning, after yesterday’s recovery bounce, which followed the stock market. The stock market was sharply lower this morning, but cash cattle surprisingly had said the southern trade was sharply lower in Kansas and Texas at 238. This is $6.00 lower than last week, occurring early in the week, and in the South, where there are no cattle. Obviously, even the cash market is now panicking like the board.
With cattle so heavily fat now and never being docked, we are finding in the weekly quality grade report that 88.6% of the Fed cattle grade choice or higher. Most of the increase pulling this choice grade up comes from the prime grade, as choice remains unchanged from a year ago. In the years to come, killing these heavy cattle will not be tolerated, due to the discounts that will be applied. But that is some years out.
Cattle look to start out the session lower this morning, with April cattle likely re-targeting massive support in the 228-229 price range. April feeder cattle rallied $8.00 off of Monday’s opening low. That low price (345.65) looks to get re-challenged today. Head-and-shoulder tops are now exposed on both live and feeder cattle charts (despite objections from cash traders who say the markets have never been stronger), with the direction of least resistance on the charts reassigned to lower prices.
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