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Farm Aid & Policy Update

Additional farm aid was not included in the current government funding package, catching many lawmakers and farm groups off guard. Senate Republicans had pushed just last week to add up to $15B in aid, but that language was left out.
With aid excluded for now, supporters say relief may need to come via supplemental appropriations or future legislation.
Congress must pass the funding package by January 30 to avoid another government shutdown.
It was also reported yesterday that nationwide E15 language was again dropped, though GOP leaders are discussing a possible supplemental bill that could allow year-round E15 sales.

Major Winter Storm Risk

A major winter storm is forecast to impact the Southern US this weekend. While the exact track remains uncertain, over 70 million people from Dallas to Little Rock to Nashville are currently under a winter storm watch.
Snow, ice, dangerous travel conditions, and power outages are possible.
Snow cover remains limited across key HRW wheat areas in the Southern Plains. Temperatures in western Kansas and surrounding regions could fall into the single digits, raising the risk of winter kill depending on snow totals and duration. Livestock stress is also a concern.

US–China Trade Watch

US and Chinese officials may soon hold another round of trade talks ahead of the planned April meeting between Donald Trump and Xi Jinping.
According to the US Trade Representative, negotiations would focus on common goods and services, avoiding sensitive areas like tech and national security.
China has already fulfilled its commitment to purchase 12 mmt of US soybeans. Treasury Secretary Scott Bessent said both sides are now looking ahead to China’s pledge to buy 25 mmt annually through 2028, though Trump continues to push for larger volumes.

Europe, Greenland & Tariffs

President Trump announced he will refrain from imposing new tariffs on European countries, following meetings at the World Economic Forum.
He stated that a framework for a future deal involving Greenland has been reached, marking a major shift from prior tariff threats. While details remain limited, Denmark continues to oppose any US takeover.

Grain Market Recap

Soybean futures rebounded Wednesday, with the most-active Mar26 contract gaining roughly 12 cents, settling near $10.65.
Support came from a slow start to Brazil’s soybean harvest due to rainfall in northern regions, along with comments from Treasury Secretary Bessent pointing to ongoing Chinese demand for US soybeans.

Global Protein Trade

China has reopened its market to Canadian beef imports, ending a ban that had been in place since 2021. Initial shipments are expected to be small, but the move is a positive long-term opportunity for Canada’s cattle industry.
Meanwhile, US beef exports to China have declined sharply over the past year amid ongoing trade tensions.

India & Wheat Exports

India has approved the export of 500,000 tons of wheat flour and related products. Wheat exports had been restricted since May 2022, but a strong monsoon is expected to boost domestic supplies.
India is typically self-sufficient in wheat and is sometimes a net exporter. Its re-entry into the export market is considered a bearish factor for global wheat prices.

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🇨🇳 China & U.S. Soybeans
China has reportedly completed its ~12 mmt U.S. soybean purchase, according to Treasury Secretary Scott Bessent
Shipments are expected to move by May
Focus now shifts to China’s 25 mmt annual soybean pledge over the next three years
Despite that pledge, South American soybeans remain more competitive, likely capping U.S. demand
Ongoing economic strain and a smaller hog herd could further weigh on Chinese soybean usage

📌 Important context:
USDA has only confirmed 8.1 mmt of soybean sales to China so far
Roughly half of recent “Unknown” sales likely end up in China, plus some unreported intra-house business
Even at 12 mmt, purchases are well below the ~22.5 mmt China bought last marketing year
That’s why USDA cut its U.S. soybean export forecast last week

📉 Grain Markets
Soybeans: Mar ’26 contract slipped ~5¢, settling near $10.53
Pressure came from:
Rising geopolitical tensions over Greenland
Expectations for a record Brazilian soybean crop
Corn: Mar ’26 futures eased ~1¢ to $4.24

🚜 Farm Economy Reality Check
Farmers face tight margins after years of weak prices and rising costs
New York farmer Ron Robbins used detailed field-level data to:
Fallow unprofitable acres
Improve marginal land
Shift some acres from soybeans to corn
His takeaway: the downturn may be the new normal—reassessment is no longer optional

🚢 Weekly Export Shipments (USDA)
Corn: Strong print, beating expectations
Soybeans: Near top end of estimates; China took 46% of the week’s volume
Wheat: Also near the high end of expectations
YTD snapshot:
Soybean shipments: well below last year
Corn shipments: well ahead of last year
China-bound soybean cargoes shipped via both PNW and Gulf

🌱 Flash Sale
USDA confirmed a soybean meal sale to the Philippines for next marketing year

🌍 Macro & Markets
Japan’s bond market saw sharp turmoil after fiscal concerns and a weak auction
Long-dated yields spiked, spilling into global credit markets
S&P 500 logged its largest one-day drop since October
A weaker dollar failed to spark meaningful buying in ag

₿ Bitcoin Watch
Strategy Inc. (formerly MicroStrategy) has gone all-in again:
Massive recent Bitcoin purchases
Now the largest corporate holder of Bitcoin globally
Strategy uses Bitcoin as its primary treasury reserve, funded largely through debt issuance
CEO Michael Saylor remains controversial due to the aggressive approach

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🚜 Farm Aid & Government Funding

Senate Republicans are pushing for an additional farm aid package, potentially totaling up to $15 billion (not yet confirmed).

The proposal includes:
Additional bridge payments
Support for specialty crop producers
Higher farm ownership and operating loan limits
Aid for farmers who suffered losses above the national average or were forced to sell at depressed prices
Lawmakers plan to attach the measure to upcoming government funding legislation
Farmer Bridge Assistance (FBA) payments remain scheduled for February 28

A possible government shutdown on January 30 could:
Delay FBA payments
Delay any new farm aid package
The House and Senate have passed several spending bills, but key issues remain unresolved

🌍 Global Trade & Geopolitics
President Trump announced new tariffs on NATO allies over Greenland
10% tariffs begin February 1
Increase to 25% on June 1
Tariffs remain until the US is able to purchase Greenland
The EU is weighing retaliatory trade measures
Trump also said he would consider using force if negotiations fail

Market reaction:
S&P 500 futures down 1.8%
European and UK equities sharply lower
US dollar weaker against major currencies

🇨🇦🇨🇳 Canada–China Trade Deal
China will reduce tariffs on Canadian canola oil from 85% to 15% by March 1
Tariffs also reduced on:
Lobsters
Crabs
Peas

Canada will impose a 6.1% tariff on Chinese EVs
China has reportedly purchased its first Canadian canola cargo since October
Canada continues diversifying trade away from the US

🌱 South American Crop Update
Brazil’s soybean harvest is ahead of schedule
2% harvested as of last Thursday
vs. 1.7% at the same time last year
Rainfall has been near normal overall, with slightly drier conditions in southern areas
World Weather notes a La Niña-style dry bias, but says it’s unlikely to threaten production

📊 Fund Positioning (CFTC)
Large speculators were heavy sellers last week:
Corn: Net sellers of 78k contracts
Net short now 91k (largest since late October)
Soybeans: Net sellers of 46k contracts
Net short 20k (largest since mid-October)
Wheat: Net buyers of 1k SRW contracts

🚢 Export Activity
USDA reported multiple corn flash sales:
298k mt to unknown destinations
120k mt to Japan
Both sales are for the 2025/26 marketing year
Accumulated corn sales are now 29% higher than last year

🐄 Cattle Market Shock
Live and feeder cattle futures plunged Friday on screwworm concerns
Texas officials report 14 active cases within 200 miles of the US border
The pest is expected to eventually reach the US

Market reaction:
Live cattle down as much as $4.45
Feeder cattle down as much as $8.10

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Farm Economy Under Pressure
Headlines this week focused squarely on the deteriorating US farm economy. The Wall Street Journal published an article detailing the challenges facing US soybean farmers, including high input costs, weak commodity prices, rising competition from Brazil, and sluggish export demand. The piece also referenced USDA’s $12 billion Farmer Bridge Assistance (FBA) program, noting that while helpful in the short term, it does not address deeper structural issues.
Reuters published similar coverage, emphasizing tighter bank lending standards, increasing financial stress, and a rise in farm bankruptcies. Together, the articles underscore mounting pressure on farmers and the broader ripple effects across rural America.

Soybean Oil & Biofuels
Soybean oil futures surged on Thursday, gaining as much as 3.8% on expectations that the Trump administration will finalize US biofuel-blending quotas by March. Last June, the EPA proposed a sizable increase in biomass-based diesel targets, which would significantly boost soybean oil demand. There is optimism that stronger biofuel demand could help offset weak soybean export performance.

NOPA Crush Update
The National Oilseed Processors Association released its December crush report, showing US soybean crush at its second-highest level on record. NOPA members processed 224.99 million bushels, up 4.1% from November and 8.9% from December 2024, slightly above trade expectations.
For full-year 2025, crush totaled nearly 2.4 billion bushels—an 8% increase from 2024. End-of-month soybean oil stocks rose to 1.64 billion pounds, the highest level since May 2024, up sharply from both last month and last year, though just below average trade estimates.

Brazil Soybean Crop
Brazil’s soybean crop is shaping up to be record large. Agroconsult raised its estimate to 182.2 mmt, citing strong field conditions and limited widespread issues. Meanwhile, Conab trimmed its estimate slightly to 176.1 mmt due to marginally lower yield expectations. Even so, the crop remains record large and would exceed last season’s production.

Export Sales
US corn export sales impressed last week, with net sales of 1.1 mmt. While down from the prior four-week average, the number was a strong rebound from the previous week. Mexico was the top buyer.
Soybean sales exceeded expectations at 2.1 mmt, up sharply week-over-week and well above the recent average. China was the largest buyer. Wheat sales came in near the low end of expectations at 156,300 mt, with unknown destinations leading purchases.

USDA Flash Sales
USDA reported multiple flash sales on Thursday:
Soybeans sold to China and unknown destinations for 2025/26 delivery
Additional soybean sales for 2026/27 delivery
Corn sales to Japan and unknown destinations for 2025/26 delivery

Drought Monitor Update
USDA’s latest drought data showed mixed but generally improving conditions across parts of the Corn Belt and High Plains. Above-normal precipitation helped reduce drought intensity in portions of Wisconsin, Iowa, Michigan, Nebraska, and Kansas, while conditions worsened slightly in southern Missouri.
US Areas Experiencing Drought
Corn: 28%
Soybeans: 34%
Winter Wheat: 41%
Spring Wheat: 10%
Cattle: 34%

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🌽 Argentina Corn Crop Update
Argentina’s corn crop is shaping up to be record large. The Rosario Grain Exchange raised its estimate to 62 mmt, well above the prior record of 51.5 mmt set in the 2023/24 season. The increase reflects more planted acres than expected. Despite recent hot and dry conditions, crop stress has been limited, and rainfall is forecast for key growing areas.
For comparison, the USDA is currently projecting Argentina’s corn crop at 53 mmt.

📈 Corn & Soybean Futures
Corn and soybean futures finished higher on Wednesday, bouncing from oversold levels.
March corn settled near $4.22
March soybeans closed around $10.43
The gains were largely technical after futures fell to their lowest levels since October earlier this week following Monday’s bearish USDA report.

🔥 US Ethanol Production
US ethanol production surged to a new all-time high last week. Output jumped to 1.2 million barrels per day, crushing the prior record set in December. Ethanol stocks also climbed to a record weekly high of 24.47 million barrels.

According to Reuters data, ethanol margins remain solid across the Corn Belt, running 10 to 40 cents positive based on spot corn, DDGs, and input prices. Margins improved following Monday’s sharp sell-off in corn futures.

🇨🇳 China Soybean Imports
China imported a record 111.8 mmt of soybeans in 2025, topping the prior record set in 2024. Imports rose 6.5% year over year as buyers front-loaded shipments from Brazil and Argentina amid trade war uncertainty.
China largely avoided US soybeans during the year due to President Trump’s tariffs, but purchases resumed after the October trade truce. Traders estimate China has already bought nearly 10 mmt of the 12 mmt it committed to under the agreement.

🚢 USDA Flash Sales
The USDA reported multiple flash sales on Wednesday:
136,000 mt of corn sold to South Korea
334,000 mt of soybeans sold to China
Both were for delivery during the 2025/26 marketing year.

🥈 Silver & Gold Hit Records
Silver prices exploded to a new record high, surging more than 5% and breaking above $90 per ounce for the first time. The rally was fueled by renewed attacks on the Federal Reserve, expectations for additional rate cuts, and rising geopolitical tensions. Silver is now up nearly 30% year-to-date and almost triple where it traded a year ago.
Gold also hit record highs, with prices up more than 70% over the past year.

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🌽 Ethanol & E15 Push

The Renewable Fuels Association is calling for year-round, nationwide sales of E15 following Monday’s bearish USDA report. The group says allowing E15 nationwide could eventually create demand for more than 2 billion bushels of corn and sorghum.

The RFA is urging Congress to pass the Ethanol for America Act, finalize Renewable Fuel Standard volume requirements, limit small refinery exemptions, and reallocate any waived volumes.

Despite the push, year-round E15 is unlikely to materially boost ethanol demand in the near term:
Infrastructure: Many stations would need upgraded tanks, pumps, gaskets, and EPA sign-offs
Consumer behavior: Most drivers don’t know what E15 is and are hesitant to buy it
Production capacity: US ethanol production is already near capacity
An E15 mandate would be the fastest way to meaningfully increase corn demand—but that would require new plants, new infrastructure, and billions of dollars.

🚜 Trade Policy Risk: USMCA

President Trump said this week that the US-Mexico-Canada Agreement is now “irrelevant” and no longer benefits the US. The agreement is up for review this year, with renewal requiring all three countries to agree by July 1.
Mexico has been the largest buyer of US corn in recent years. Any disruption to USMCA would be a major risk to corn exports. See chart below.

🥩 Beef Prices Hit New Records

Ground beef prices averaged $6.82/lb in December, up 16% year over year. Steak prices averaged $12.51/lb, up 18%.

Beef prices remain a major driver of higher food costs and are expected to keep rising into 2026 due to historically low US cattle inventories and new dietary guidelines encouraging higher animal-protein consumption. See beef charts below.

🌱 Soybean Flash Sales
USDA reported multiple soybean flash sales on Tuesday:
168,000 mt to China
152,404 mt to Mexico
Both are for delivery during the 2025/26 marketing year.

📊 Inflation Update

The December CPI showed inflation at 2.7% year over year, unchanged from November and in line with expectations. Food prices jumped 0.7% month over month, the largest increase since October 2022.
Despite tariff concerns, inflation remains relatively stable, and the report is unlikely to change the Fed’s cautious stance on rate cuts. See CPI chart below.

🌎 Largest US Landowner

The owner of the LA Rams and Denver Nuggets is now the largest landowner in the US. Stan Kroenke recently purchased 1 million acres in New Mexico, bringing his total US landholdings to over 2.7 million acres.

Other top landowners include:
Emmerson Family: ~2.5 million acres
John Malone: ~2.2 million acres
Ted Turner: ~2.0 million acres
Jeff Bezos: ~462,000 acres
Bill Gates: ~275,000 acres

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🌽 Corn

Corn futures plunged on Monday, with prices down nearly 6%, marking the largest single-day decline since June 2023. The selloff followed a decidedly bearish report from the USDA.

The agency raised its estimate of the 2025 U.S. corn crop to a record 17.02 billion bushels, up 269 million bushels from the prior forecast. USDA also increased last year’s national average yield to a record 186.5 bpa, up from 186 bpa previously. Many analysts had expected cuts to both production and yield following dry fall conditions, making the revisions a surprise.

USDA also boosted December 1 corn stocks to 13.3 billion bushels, the largest Dec. 1 corn stocks on record.

🌾 Winter Wheat

US winter wheat acreage is expected to decline marginally for the 2026 crop. USDA estimates 33.0 million acres planted, slightly below last year’s 33.2 million acres but above analyst expectations of 32.4 million.

Notably, USDA is forecasting record-low winter wheat acres in Nebraska and California.

Hard red winter wheat: slightly lower year over year
Soft red winter wheat: modest increase
White winter wheat: sharp decline

🚜 Farm Policy & Aid

The American Farm Bureau Federation is calling for additional farmer aid. AFBF President Zippy Duvall said the Trump administration’s $12 billion Farmer Bridge Assistance program is welcomed, but falls far short of offsetting tens of billions of dollars in recent farm losses.

Duvall is urging:
Expanded trade opportunities
Labor reform
Year-round approval of E15, which could boost corn demand and lower fuel costs

Farm Bureau supports greater market access for U.S. agriculture while opposing President Trump’s tariffs.

🚢 Exports & Demand

US soybean shipments beat expectations last week. USDA reported 1.5 mmt (56 mil bu) of soybeans inspected for export during the week ending January 8 — up 55% week over week and up 13% year over year. China accounted for 59% of the total.

Corn inspections: 1.5 mmt (59 mil bu), near the upper end of expectations
Wheat inspections: 317,465 mt (12 mil bu), sharply higher week over week

USDA also announced multiple flash sales of corn:
204,000 mt to South Korea
310,000 mt to unknown destinations
Both for 2025/26 delivery.

🏛️ Macro & Markets

Republican lawmakers are pushing back against the Justice Department’s investigation into Jerome Powell, arguing it could undermine Fed independence. Treasury Secretary Scott Bessent reportedly warned President Donald Trump that the probe could spook financial markets.

Trump denied knowledge of the investigation, which comes amid months of pressure on the Fed to cut interest rates further. The controversy could complicate Trump’s efforts to nominate Powell’s successor.

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🌽 USDA Reports Preview (Crop Production, WASDE & Grain Stocks)
USDA will release its monthly Crop Production and WASDE reports on Monday, along with the quarterly Grain Stocks report.
• Analysts expect a notable decline in US corn production and yield, though both would still be record large
• Soybean production and yield are forecast to slip modestly
• US ending stocks for corn and wheat are expected to edge lower
• Soybean ending stocks are projected to increase slightly
• Corn exports are forecast at record highs
• Soybean exports are expected to decline amid slow sales to China
• World ending stocks are expected to remain largely unchanged

🇨🇳 China Buys More US Soybeans
China purchased at least 10 cargoes of US soybeans on Friday for April–May shipment.
• At least eight cargoes will ship from the US Gulf
• The remainder will ship from the PNW
• The deal follows another 10-cargo purchase earlier in the week by Sinograin
• Several smaller flash sales were also reported last week
Despite the recent buying, traders remain uncertain about if and when the soybeans will ultimately ship.

🚢 USDA Flash Sale Update
USDA reported a flash sale of 198,000mt (7 mil bushels) of soybeans to unknown destinations for the 2025/26 marketing year.
• Accumulated US soybean sales are down 29% vs. last year

🇧🇷 Brazilian Soybean Harvest Begins
Brazil’s soybean harvest is underway and running ahead of normal.
• 0.53% harvested vs. a five-year average of 0.39%
• Only 0.05% was harvested at this time last year
• Warm, dry weather is expected to persist
Both Conab and USDA are projecting a record Brazilian soybean crop.

📊 CFTC Fund Positioning
For the week ending January 6:
• Funds were net buyers of corn
• Net sellers of soybeans (continuing a large liquidation trend)
• Net sellers of SRW wheat

💳 Trump Calls for Credit Card Rate Cap
President Trump is calling for a 10% cap on credit card interest rates for one year, down from current rates near 20%.
• Banks warn the move could reduce credit availability
• Riskier borrowers could face credit line cuts, higher fees, or larger minimum payments
• Proposal could take effect as early as January 20
Shares of some credit card companies were lower this morning, with Capital One down about 2.5%.