We were going to be having a conversation about the commodities markets and counting on the quarter ended for next month. We were joining us on Market Club podcast with John Heinberg from Total Farm Marketing and Joe Camp from Comstock. How are you guys? Doing well, Caesar. We're doing well. At least I am.
Yeah, same here. Thanks a lot. I'm glad to join you again and glad to be with John here. I will be starting with John. How is the green markets for today's close? Yeah, pretty disappointing close today being led by that soybean market this afternoon and
Obviously, you look at the double digit losses. Let's get into maybe a couple of reasons why they're on that soybean side. New contract lows and basically everything is up to January contract and we're a mere three cents or so away from that on the close today. One of the biggest areas I'm watching obviously is the soybean oil market since we put that August low and our rallies and our sell-off points have been kind of triggered by the movement in the soybean oil and yesterday
Soybean oil kind of broke through its uptrend line follow through today. Got Malaysian palm oil on the softer side here as well. So it looks like we have a little bit more room maybe in that soybean oil market that could continue to weigh in the bean market. Throw in there the strong crop that's forecasted for Brazil. We've been really seeing the impact on those deferred contracts in that regard. In fact, November beans trying to hang on to the $10 handle for 2026 today.
So the bean markets, definitely the seller corn kind of follow and stutes as well as the wheat market today just with that, that weakness in the beans.
I think couple factors there. First off, we do have December options expiring tomorrow. That usually brings a little more volatility into the marketplace. There are a lot of open calls down at the 420 level. So it wouldn't surprise me. We see some movement that way. And then on top of it, the US dollar today did break out to a new high for the move. Today, kind of pushing through its consolidation pattern. We'll see if we'll get some follow through. But that stronger US dollar just continues to kind of erode at our competitiveness a little bit on the export market.
I think that's some of the reason why this December corn contract has a hard time getting through the 430 level. How was the January beans because November beans are a gun for this year? January is that lead month and like I said with just another difficult day there kind of trying to push through some bottom end support
Ready to challenge that contract low, $9.73.5 was where that low was from back in August. Again, like said, $0.03 was around $4.25 away from that low on the close today. You know, we do also have some December options and beans that are tied to that January contract. So that could be some of it here. I still think there's just a lot of concern in this market that our demand window may be closing.
And in that case, it's just an easier path of least resistance, at least in this window, for being priced as to possibly close that gap to find a way to maybe keep that demand window a little bit more open. Joe, the world wheat futures are mixed with Russia and Ukraine war. What is your take on the wheat markets? Well, risk premium definitely ran reentering the wheat market.
Early this week, we're still holding gains on the week about a dozen in the nearby Chicago contract that after a small down draft, two to three, three and three quarters since lower for the Chicago contracts mentioned today, you have, I think that anchor of the soy complex that was mentioned, the corn being down as well, also brought up already that strong dollar still in the way of global markets like wheat.
When you talk about a stronger dollar and diminished terms of trade for your exports, that's going to come into play here. And it can offset what had been some potential view on maybe the US down the road getting some better demand out of the uncertainty all in the rising prices too, relatedly out of the Black Sea region, at least most recently Russia.
France, that's less of a pressure than what it had been. We're now, though, also weighing in production expectations rising for the southern hemisphere growers, Australia and Argentina, and the headlines more along with what we know is an improving lot at the US winter wheat crop, as early as it is. So all of those forces along with the negativity that we had highlighted in the corn and beans pulling the wheat down today.
How was the wind or wheat planting season in central Illinois near Peoria and South Plains? No, no complaining. You know, worst stages that we got into a dry stretch to finish off the row crop harvest, but you also have therefore time to get weed in. If you so choose coming off of last year's really rather strong crop, a couple of years worth of really strong
wheat crops in the state. It is incentive to want to plant the crop, although at the same time, the lower prices kind of are discouraging, no doubt. But yeah, we got it done, no doubt. And now recent rain, like elsewhere, the southern plains and other big regions, all types of wheat, at least on balance lately, we've had improved conditions.
How is the beans crushed for right now? That'll side too. We just really think we got cattle on feed tomorrow. We'll see what those numbers give us. Market just maybe a little bit tempered, obviously going into that report. Waiting for cash trade this week. We're seeing some very minimal trade, getting built with this time frame. Everything I'm hearing from producers in terms of what bids are out there that
Looks like we got a steady week coming when it does kind of get put back together. So let me await on the front end of that live cattle market today kind of getting back into that 185 zone. I do think that moving feeders a lot was tied to expiration and getting that market kind of caught back up to the index from last week.
But let's also just heard some chatter for some cattle guys today, too, that with the improved pasture condition, some of those wheat pasture out there that maybe the guys are looking for some background and cattle to get out in those wheat pastures here. Maybe that's bringing a little extra demand into the feeders. Jumping over into the hog side of the equation, that hog market, my biggest focus right now, continues to be on this fund long position last week on the commitment of traders are sitting at 120,000 long contracts. That is a record over time.
At the same time frame here, you do have some fundamentals that are supportive in this market.
We did kind of peek out on that December contract and now we've kind of rolled over a little bit. Uh, so it just really cares how the money flow is going to handle the combination of where the index is trading, where the December futures are. You know, we're still going to retail values that are, that are respectable in this area. So I'm a little more worried that we get some more technical break on just money flow. So my term that I like to use makes everybody kind of chuckle is I'm kind of cautiously bearish the hog market just given the value and where the money is positioned.
How about the box beef for right now, Joe? Talk up again today, just by the morning count. And that leaves this market looking overall resilient, mostly yet higher from a year ago, and consumers not showing that they want to push back in a huge way. So it's the supportive influence in a market that has otherwise
Again, stretch to places where we've talked about where we should be hedging, protecting risk, running into some of this technical resistance and some profit taking like the hogs that might also apply to the cattle futures and the fund position there. So we'll see those signals as mentioned, maybe the technical along with the outside financial markets, the direction of the dollar and the stock market, which gets back in to the cattle trade. But yeah, we talk about the
slight strength for box me probably holding up that market. And that would be what only thing I'd add on the hog conversation is how impressive the cutout is also held up for pork. And particularly, of course, the bellies where you have price averages there ranging up to 50% higher than a year ago. Of course, that after the inventories have dropped
So sharply from spring to fall this year. So yeah, the meat demand I think is still a very positive story for both of those markets. Do you have any final thoughts or recap of our conversation about the summary of the quarter? I'll start there, Joe.
You know, we've got a lot of volatility moving around right now and a lot of different markets, geopolitical events, what's going on here as we prepare for a presidency change, obviously just the end of the year and what we can be seeing. So, you know, it's going to be a time for producers to be on your guard, find value and protect value. It's always been my philosophy.
But again, these next basically six weeks here until we get to the end of the year could be very interesting just on headline to headline that we kind of run into as we move forward. So again, producers don't fall asleep in the holiday season. This is a window. Make sure you're taking advantage of opportunities. There you go. Yeah. Let me dovetail on that and talk about volatility. All these storylines or headlines.
As you say, I think that's worth watching and considering when you lay out your marketing plan and where your exposure is, how you can hedge going forward, I say, consider hedging against higher volatility in the wrong direction. Have you got a lot of exposure to prices falling? Or do you stand to benefit if we do turn them around heading into the rest of the winter because of whatever factor comes into play? We can think about a lot of them, whether it's
the political direction after the inauguration and some of these implementations of policy are already expressed. And that goes down to trade policy, of course, number one, but biofuels, immigration and labor, economic policy, everything under the sun, including global security and how we're going to approach these ongoing conflicts with the war in Ukraine, Israel and their war on terrorism, the involvement of Iran,
Those are just things, of course, that we're already talking about. And there's a lot that we don't know that could pop up here. And that makes me want to examine, you know, my risk management and have a plan for going forward. And of course, that's what I guess guys like John and I are talking with our customer about every day. Thanks, you guys. Thanks both. Yep. Thank you. Have a good day, guys.
This is Joan Heinberg from Total Farm Marketing and Joe Camp on the Markets Club podcast.
