Turnaround Tuesday looks promising for grains if the selling vigilantes can be pushed back on the day session opening.
January 27, 2026
Grains are firmer this morning, in Turnaround-Tuesday style, and soybeans are ignoring yesterday’s outside-day lower close. (I discussed this in yesterday’s newsletter, how the outside-day movements don’t carry the leverage they used to years earlier, as the algos are just overpowering these individual days with nonstop selling or buying throughout the session that overpowers itself.) Part of this strength could be coming from Pres. Trump’s visit to Iowa is a campaign stop, but there is speculation that he may bring up the 45Z completion, which, it is said, the White House has signed off on. What is yet to occur though is announcements on RVO’s and reallocation of SRE’s. The EPA is set to announce those in early March.
There are increasing pockets of concern now developing in South American production, but it’s mainly tied to Argentina. But some of this is spreading into southern Brazil and Paraguay. There’s always rain in the forecast, but it never gets pulled forward into the near-term events. Right now, rain is in the near-term forecasts, but the chances are low and are not widespread. This will not provide adequate crop relief, as crop ratings in Argentina are already falling for the third week. Crop stress is on the rise, as last week’s Argentine soybean crop was 61% G/E, and this week it is 53% G/E. Brazil’s second corn crop is slow to get in the ground, and delays may impact yields.
Bitter cold temperatures remain a factor for the US into your market, slowing movement, which can also affect the crush and ethanol grind.
Grains were softer start the night session when Pres. Trump announced that he will increase tariffs on South Korea, as he suspects that country is not meeting its trade deal commitments. Because South Korea is a large importer of US ag products, it spooked the market last night. But this morning’s recovery values seem to have priced that fear already in.
The Federal Reserve meets today, with its interest rate decision tomorrow, and it’s not expected to make any rate adjustment this month. The focal point and concern for this week is the potential for another US government shutdown by Saturday if Democrats continue to move and block certain funding elements. Blocking ICE’s funding does not work, as they were already taken care of in the last round of procurement’s, and they are now funded through 2029. So, making political statements about funding in the current bill for ICE is based solely on public misunderstandings. Recall that the grain market rallied nicely when the government was closed, and we had no USDA data. The next big USDA event will be in February, when they hold their Farm Forum, which is usually price-negative as they discuss how much grain is expected to be grown this year. So, there is a feeling out there that who cares of the USDA is closed.
Something that cannot be ignored, as index funds will soon take notice, is the sharp break in the US dollar. If it closes on a Friday below 96.00, something is amiss and further weakness will start to manifest. This is always a friendly part of the grain trade; it may not be as sexy as a crop report that drops yields or a threat of hot weather, but it has an elevating effect on agricultural products. The metals aren’t the only inflation game in town to play.
Live and feeder cattle futures pushed higher yesterday, with feeder cattle closing above near-term resistance at 361. The cash feeder index was only up nine cents, at $3.60.57, and is a discount to the January contract, which ends on Thursday and has settlements on Friday. There were a few cattle sold in Iowa yesterday at $368 dressed, which was $1 higher than the week before; otherwise, they were still awaiting business with feedyards, anticipating higher prices to offset the cold-weather stress and increased costs to maintain heavy animal harvest.
Box beef yesterday had choice down 2 cents, while select gained a substantial $4.73, narrowing the spread again today to within $1.78 of the choice premium. Last week’s reported negotiated trade had packers buying 73,372 head, with 59,447 for 1-14 day delivery and the remaining 13,915 for 15-30 day delivery. Live cattle April is up against resistance at 238-240, while support is at 232. March feeder cattle are now targeting their high made two weeks ago at 365 with significant support that can create a right shoulder on the continuation chart that is in the 370 range. This Friday’s Cattle Inventory Report will have our first look at herd retention, but it’s the dairy side that will also be watched, as a lot of beef has been coming from that sector.
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