Grain Markets and Other Stuff
Joe Vaclavik and Mackenzie Johnston discuss the grain markets, the business of farming, news related to agriculture, and a variety of other topics.
Grain Markets and Other Stuff
LIMIT DOWN Soybean Trade Following Trump Comments
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🌾 Grain markets got slammed Monday, with soybeans limit down after President Trump suggested he may delay his meeting with Xi Jinping. Corn and wheat also moved sharply lower, while expanded soybean limits point to more volatility ahead.
🚛 Brazil’s soybean freight costs are rising fast as higher oil prices push diesel prices higher during peak export season. That’s creating logistical stress, hurting bids, and raising the risk that buyers shift demand to the US or Argentina.
🛢️ Crude oil pulled back Monday but bounced overnight as Middle East attacks continued and uncertainty around the Strait of Hormuz remained high. At the same time, China is tightening fertilizer exports, adding even more fuel to an already bullish global fertilizer story.
🫘 NOPA reported a record February soybean crush, while soybean oil stocks jumped to the highest level in years. Export inspections were solid overall, with soybean shipments beating expectations and China taking the majority of the load.
🥩 In the cattle market, a strike at JBS in Greeley adds another wrinkle to an already tight beef supply situation. Thanks for watching—subscribe, like this video, and drop your thoughts in the comments below.
Happy St. Patrick's Day
SPEAKER_01Good morning guys. It's Tuesday, March 17th, 523 a.m. Central Time. Grain markets are mixed this morning. May corn futures up one and a quarter at 455 and a quarter. May soybeans down four and three quarters at 11.50 and a half. May Chicago wheat up three quarters of a cent at 598. May Kansas City wheat up one at 617 and a half. May spring wheat down two and three quarters at 631 and a quarter. McKenzie, happy St. Patrick's Day.
SPEAKER_00Oh, happy St. Patrick's Day. Where is your green?
SPEAKER_01Um, I don't wear, I'm not a big St. Patrick's Day guy. Um, I am a little bit Irish though. Are you Irish?
SPEAKER_00Oh, most definitely, yes.
Limit-Down Soybeans
SPEAKER_01I am a quarter Irish, and uh that's where I get my pale skin and Catholic guilt. Uh where I grew up, McKenzie. I grew up on the south side of Chicago. St. Patrick's Day is a big deal because like their two favorite things to do there. It's like, let's get drunk and fight. Like that's what they do. So um it's a big deal where I where I grew up, where I live now. It's not so big of a deal. So happy St. Patrick's Day uh to you guys. Okay, so uh soybean market got absolutely smoked yesterday. Why don't we start there?
SPEAKER_00Right. So soybean futures plunged to their daily limit yesterday, with the May 26th contract falling 70 cents to settle near 1155 per bushel, marking the largest one-day drop since 2023. The decline followed comments from President Trump on Sunday indicating that he may postpone his upcoming meeting with Chinese President Xi Jinping. The potential delay is part of Trump's broader effort to pressure Beijing to help reopen the Strait of Hormuz. Corn and wheat futures also posted substantial losses. The May corn contract fell roughly 13 cents to settle at 454 per bushel, and the May Chicago wheat contract dropped nearly 17 cents to close near 597 per bushel.
Diesel Problems in Brazil
SPEAKER_01Comments from President Trump giveth and comments from President Trump taketh away. And yesterday it was the taketh away. So a lot of the reality that we saw, you know, especially from mid-February on, had to do with Trump comments about China and maybe they'll buy some more soybeans, and we've got this meeting coming up. And then yesterday there were basically two different items that caused this panic and liquidation event. It was Trump said, Hey, I may delay this meeting. I think that's all tied to the straight of four moves. Trump wants help reopening this thing, and he probably wants some help from China. So he's using this perhaps as leverage. And then there was the Reuters report, which cited some sources indicating that uh China might buy, might buy some additional U.S. ag products, but they used the phrase uh non-soybean row crops, indicating that China's probably gonna stop at that 11 or 12 million metric tons that they've already purchased. So this was just a big, like headline-driven liquidation event. We've seen headline-driven rallies uh based on things that Trump said, and now we've got a liquidation event. Um, we we dropped the limit yesterday, which was 70 cents. We have expanded limits today across soybean contracts,$1.05. I doubt we test any of that out, but uh who knows? The November soybean contract got beat up as well, was not limit down, uh, but we'll also see expanded limits today. Um, when you look at the weekly chart of soybeans, I'm not gonna say that it's it's over. I think that there's a big area of support that 1080 down to maybe 10 and a half somewhere in that neighborhood. So one day does not make a trend, but that was an especially ugly day. And it dragged the corn market lower, it dragged the wheat market lower to uh some extent. Not a fun deal. So these headlines when you got Trump with a truth social account, and he's, you know, this one was, I think, through Financial Times, but in any case, when he talks, the markets uh listen. And in this case, they listened very, very closely.
SPEAKER_00Rising oil prices tied to the Middle East war are pushing diesel costs higher in Brazil, making it more expensive to move soybeans. Brazil is near its peak, soybean export window, and higher freight costs are hitting at the worst possible time. Some buyers have stopped bidding for soybeans because rising diesel prices could quickly turn profits into losses, logistics problems, and shipping concerns to China are adding even more uncertainty to the market. If the situation continues, global buyers may shift purchases to the US or Argentina. While barges play a big role in long-distance U.S. soybean transport, about 55% of soybean travel relies on trucks in Brazil.
Oil Update
SPEAKER_01Yeah, so the diesel fuel thing in Brazil as it relates to logistics is a much, much bigger deal because like everything moves to the ports on a truck for the most part. Not everything, but more than half. Uh Bloomberg had this chart, which I'm not smart and I don't understand. Percent normalization of like fuel prices, whatever. It's it's not that important. In any case, um, so the the gist of this story is Brazil's having some logistics issues because of high fuel prices. I don't think personally this is going to drive any additional soybean business to the U.S. If it did, it would probably be minimal. We're still way too expensive relative to Brazil on the export market. Uh, gasoline prices here in the United States are rising and rising rapidly. National average gas price, yesterday,$379, and the national average diesel price now above$5,504 per gallon nationally. There are some areas where it's higher than that. So this uh fuel thing is getting very messy. And uh I think the president and the administration, they got to do something about it. I don't know if I don't know if like trying to reopen the Strait of Hormuz is is the way to go. I don't know if they're gonna try to do something else. Are we gonna we can restrict oil exports? We can restrict gas exports, they're gonna have to do something because it's getting it's getting messy out there.
SPEAKER_00Oil prices did retreat yesterday as WTI crude fell 5.3% to settle at 93.50 per barrel. Prices eased after Scott Bessant announced that the U.S. would allow Iranian oil tankers to pass through the Strait of Hormuz. The pullback was also fueled by reports that President Trump is urging other nations to help escort ships through the waterway. However, several countries, including some U.S. allies, have expressed skepticism and push back on the proposal. Over the weekend, President Trump stated that Iran is ready to negotiate a ceasefire, but he is not ready yet to make a deal.
China Fertilizer Exports
SPEAKER_01Okay, so overnight there were some additional tensions or um um conflict. Iran continued its attacks on energy supplies in the Middle East. They targeted a large natural gas field in Saudi Arabia. So the crude oil market uh regained overnight most of what it lost yesterday. We're back to um$96 in change in the April WTI contract. I think that this 95 area is kind of the line in the sand on the charts. But as you saw with soybeans yesterday, when you get a headline, the tr the charts don't really matter a whole lot. There's a lot of money flow um out there. There is a gap on the crude oil chart. It's somewhere in the like$68 neighborhood on the on the weekly. And uh that's somewhere that, hey, if this thing ever gets resolved, that's that's gonna be a big um area of interest for sure.
SPEAKER_00China is tightening restrictions on fertilizer exports. The measure comes as the conflict in the Middle East disrupts fertilizer supplies and drives global prices higher. China has asked exporters to halt shipments of nitrogen potassium fertilizer blends and has reaffirmed existing limits on urea exports. As a result, exports of most fertilizer types, including compound fertilizers, have largely been suspended. The policy is intended to ensure adequate domestic supplies for the spring planting season and help stabilize domestic prices combined uh with supply disruptions tied to the Iran War. The move is expected to further tighten global fertilizer supplies and push prices even higher.
SPEAKER_01Yeah, China's gonna take care of itself, of course. We've talked a lot about their push for self-sufficiency. Uh, this chart, I think this one was from FarmDoc. Um, China accounts for 10% ballpark of fertilizer exports, uh, 12.3% of nitrogen exports, 24% of phosphorus exports. FarmDoc had this cool map, which is kind of like um nitrogen exports minus imports. Or are you a net exporter or net import? You could see that China and Russia both are huge uh net exporters when it comes to uh nitrogen products. The um CME, urea contract at the Gulf is at 601, and that's up 255 bucks a ton or up 70% from the low that was posted in December of 2025. So the prices remain uh very much elevated. And this is, of course, is a quote at the Gulf. Like retail is is above 700 if you can even get an uh offer at all.
SPEAKER_00If you guys have not checked out our premium content, you sure need to do so. Joe, can you tell our viewers about some of our recent premium videos?
NOPA Crush Record
SPEAKER_01All sorts of hardcore grain marketing info the last few days. Yesterday I did capturing new crop soybean carry and targets. Um, we're not to the point now where you need to think about capturing carry and new crop soybeans, but I laid out the numbers, and this is a video that will be relevant uh throughout the remainder of the U.S. growing season. Like I guess it hasn't started yet, but uh through the U.S. growing season, you know, when you got November soybean HTAs or short futures. When do you roll those forward and and how and at what prices? Um that's what I talked about yesterday. I laid out all the spreads. I did Nove Jan, Nov March, Nove May, uh, Nove July. Did the same thing for corn uh on Friday last week, and then um on Thursday last week, I believe, did uh kind of a review on new crop corn and soybean marketing, everything that I've advised, my general thoughts and kind of where I stand now. We lay it all out in a spreadsheet. It's just cash sales. We don't do uh futures or options or anything complicated, super simple to follow. If you guys want to see the premium stuff, go to standardgrain.com this morning. Uh, you can sign up. This is a$50 per month subscription. You can cancel at any time. There's no other fee, no other obligation. Nobody will try to sell you anything, anything else. Uh, we do two email blasts per day plus an optional text message service. Um, the first email blast is the big one that goes out at 5 a.m. Central Time. The second one is our premium video blast that goes out at 10 a.m. Central Time. If you are the decision maker in your farm operation, if you do the marketing, the crop insurance, the financing, um, all that stuff, this is must-watch material. Give that deal a shot this morning, guys.
SPEAKER_00NOPA released its February crush data yesterday. The U.S. soybean crush rose to its highest level on record for the month, with NOPA members processing 208.79 million bushels. The crush was 17% higher than the same month last year and exceeded even the highest pre-report forecast. The daily crush rate of 7.46 million bushels per day in February set a new record, topping the prior record set back in October of last year. End of month soybean oil stocks climbed to their highest level since April 2020 at 2.08 billion pounds. Stocks were up 9.5% from January and up a whopping 38% from last year, exceeding the average trade estimate of 1.93 billion pounds.
Export Inspections
SPEAKER_01That's an excellent print, of course, but it's not a surprise. We knew that this is kind of the pace that we're headed at. Just so you guys understand, uh, demand for U.S. soybeans or soybeans grown in the United States, domestic crush, which is what we're talking about here, now accounts for ballpark 60% of our demand. Uh, exports account for 37%. It used to be more of kind of a 50-50 split for a long time, and now we're exporting less, we're crushing more domestically. So the um stocks numbers are a little bit too high. I don't love that, but the the crush stuff is is excellent. And I think USDA is is pretty darn close with its projection for uh record soybean crush this year.
SPEAKER_00U.S. corn shipments were near the upper end of pre-report expectations last week. USDA reported that 65 million bushels of corn were inspected for export during the week ending March 12th. The print was up 9% compared to the prior week, but down 2% versus the same week last year. Soybean shipments surpassed expectations at 35 million bushels. The print was up 9% compared to the previous week and up 45% versus the same week last year. China accounted for 57% of the week's inspections. Wheat shipments were near the lower end of expectations at 13 million bushels. Uh, the print was down 31% from the previous week and from the same week last year.
JBS Strike in Colorado
SPEAKER_01Um, so corn shipments have, I'm gonna say, normalized slightly relative to seasonal patterns. Like we're not at, we're not doing records every single week like we were for a while. We've kind of reverted back to something that's more normal in terms of corn shipments. Still fantastic, though. We're up 39% uh year to date, uh or year over year rather, with regard to shipments and sales are up 30%. Soybeans, that's a good, very good print seasonally, but given what we learned about China this week and that they probably, and I say probably, aren't gonna buy more old crop soybeans out of the United States, this chart may normalize as well. I had talked about the possibility in the past of like some big contra seasonal spike in shipments. And I just uh given what we know now now about China and the headlines this week, I'm gonna say probably not, but you know, the headlines, as we saw yesterday, they change very quickly.
SPEAKER_003,800 workers at the JBS packing plant in Greeley, Colorado officially went on strike on Monday morning over alleged unfair labor practices. The facility is one of the largest in the nation with a maximum slaughter capacity of roughly 6,000 head per day. The strike comes at a time when the U.S. cattle herd is at its smallest size in more than seven decades, which has significantly reduced beef production and pushed beef, uh push beef prices to record highs. However, the impact of the strike may be limited as cattle can be re redirected to other slaughter facilities, and we obviously have in the uh an abundance of slaughter capacity right now, considering that our cattle numbers are as low as they are.
SPEAKER_01So minimal impact on beef prices and cattle prices, or what do you think?
SPEAKER_00Um, I would say so. And they they didn't kill cattle last week at this plant. So I feel like the impact is already baked into the cake. We saw it, I feel like we saw it impact the markets last week. And yeah, I mean, we could see beef prices tick a little bit higher, but again, like these cattle can go to other facilities, so it shouldn't have a huge impact.
SPEAKER_01And the cattle market was higher yesterday.
SPEAKER_00It was, yeah. So live cattle were 230 to 292 higher. Feeders saw gains ranging from 507 up to six up to six seventy five box beef prices. They were higher once again. Choice was up 474 at 402.66, and select was up 296 at 394.51.
SPEAKER_01Stock market's just a little bit lower this morning, treasury's off a little bit, US dollar close to flat. Crude oil is up$2.90 in the April WTI$96.40, gold and silver just a little bit higher. Have a great day, guys. We'll be back on Wednesday.