Tariffs and trade took markets, including grains, for a wild ride over the past seven months. U.S. farmers suffered a downturn in corn and soybeans, but agriculture lives and dies by longer cycles dictated by weather and economics. What goes down eventually comes up. So, is it finally time for prices to turn the corner?
Both crops, of course, tend to move in tandem. The statistical variance between their average annual prices is around 93% — not a perfect 1:1, but close. Fundamentals for corn and soybeans, as measured by the ratio of stocks-to-usage, have much less of a connection. Sometimes corn drags soybeans lower, and other years soybeans are the bell cow for gloom.
And in each market, prices can turn both before and after fundamentals do.
Cycles between bottoms in marketing year corn prices average 7.4 years, while the duration in soybeans is 8.4 years, with both ranging from 5 to 11 years long. The 2025-26 marketing year marks nine years since the last corn bottom, with soybeans on year 8, so historically speaking, both markets are ripe.
So, what are the prospects that futures are finally ready to rally?
No road map
To find out where you’re going, it’s vital to know where you are and where you’ve been. Without USDA data, key mile markers are stuck in September, before the lights went out in Washington. The next World Agricultural Supply and Demand Estimates are due Nov. 14. Assuming no report, what do we know from other sources? Here’s an overview.
- U.S. crops look big, with corn yields above the government’s last survey and soybeans little changed recently. Acreage was the disruptor in USDA’s last production estimates, but the shutdown stopped Farm Service Agency summaries of farmer certifications, removing one important clue about plantings.
- Availability of demand news is mixed. Livestock production data went dark, making feed usage even more difficult to estimate. Biodiesel data also is missing in action. The Energy Department is still publishing weekly totals for ethanol, which enjoyed a record grind last week, though September-October totals are nearly 5% below last year and stocks are around 3% higher.
- Export data also is mostly on hold from USDA though private sources and estimates from other countries, including China, help fill in some of the blanks.
- Chinese October soybean import totals hit a record for the month but those were sourced from South America, which is typical for the season as U.S. exports gear up for deliveries with the new crop harvest.
Watch the cash market
The best barometer of futures without USDA likely is the cash market, where buyers and sellers are going about their business. Corn basis is trying to confirm its harvest low as farmers decide whether to lock bins tight or move part of the crop now for cash flow. Bids for the feed grain tested lows from 2021, when the world was trying to crawl out from the pandemic. Soybean basis is weak but is also trying to confirm a low and avoid the extended weakness seen during the first trade war with China in 2018-19.
What’s happening in South America?
Recovery hopes for both corn and soybeans now shift to South America, where it’s way too early in the growing season to draw significant conclusions. So far conditions are mixed. Prospects in the Argentine corn belt are 20% better than average, while Brazil is 15% below normal, with some soybean planting delays already in play there.
If La Nina cooling of the equatorial Pacific continues through the rest of the southern hemisphere growing season it could dent yields in Argentina. That said, Brazil’s growing region is so huge that size alone can mitigate some of that risk.
La Nina is associated with some of the big U.S. droughts, but the phenomenon is expected to be over long before summer in the northern hemisphere.
Based on what the market knows now, nearby corn faces considerable resistance that could hem in rallies below $4.60 to $4.72. Soybeans’ ability to rise above $10.85 opens the door to $11.80 to $12.56 if China follows through on its pledge to buy more U.S. originations.
