With fall harvest complete and the government open, the November WASDE report offered modest balance sheet tightening. Yields were trimmed slightly, changes were made to the export balance sheets, and questions arose on domestic demand needs.
During the government shutdown, one thing remained: U.S.-China relations will keep volatility in the grain markets.
The United States’ first quarter corn export program is well over 500 million bushels shipped, while soybeans to China are at just over half of last year’s shipments at this time. Just around the corner is the beginning of the South American harvest season where U.S. soybean exports are showing they will likely struggle to compete into early 2026.
Before harvest began, the message was clear: Hold and own soybeans over corn while waiting for opportunities to sell against the widening carries. Pre-harvest cash values were well below selling objectives in soybeans, but as harvest finished up, we saw those cash values converge near futures on growing U.S.-China optimism.
Soybean processors had to firm their cash bids to cover their soymeal demand needs and keep their draw of soybeans from going to export markets. And those who were able to buy and hold soybeans saw great margins while liquidating some length to cover logistics and/or financing needs.
For commercial elevators, the core strategy still should be remaining functional as we transition to picking up post-harvest piles, managing space for off-farm movement, and protecting the financial balance sheets of the company.
With cash values widening again, continue to (re)build basis length while keeping logistics and space needs in mind. Cash and futures will eventually converge in the delivery months, or spreads will widen to full carries to pay someone to retain that ownership. Remember those selling objectives when valuing them against the current spread environment.
Alex Grohsmeyer is a broker and consultant with Advance Trading Inc., Bloomington, IL; 309-664-4313; @philwcc.