Grain Market Commentary 2/4/26
CBOT Pricing:
Corn finished the day up 0-1.25 cents. The market found support from the soybean rally but faced pressure from a below-average EIA ethanol production report. The Mar26 contract closed 1 cent higher at $4.295. May26 and Jul26 futures ended the session 1.25 cents higher at $4.37 and $4.4325, respectively.
Soybeans felt support from Trump’s social media posts about his conversation with Chinese President Xi. Mar26 futures closed at $10.9225, up 26.4 cents from the prior close, and 22.0 cent higher than the 200-day moving average. The May26 contract gained 27.5 cent to close at $11.0475, a value not traded since December 12th, 2025. The Jul26 contract closed at $11.1675, 26.25 cents higher.
Market Headlines:
Mexico agrees to send a minimum amount of water annually to the US:
The two countries have negotiated this issue for several months. After President Trump threatened to impose a 5% tariff on Mexican imports if Mexico failed to deliver additional water, a new agreement was made. Under the new agreement, Mexico will deliver a minimum of 350,000 acre-feet of water to the US annually during the current five-year cycle.
The existing 1944 Water Treaty requires Mexico to deliver 1.75 million acre-feet of water to the US every five years. The updated agreement maintains the same total volume but ensures consistent annual deliveries, rather than allowing Mexico to accumulate a water debt over the five-year period.
President Trump and President Xi phone call sent soybean on a rally:
This morning, President Trump said he had an “excellent” phone call with Chinese President Xi. The leaders discussed trade, military issues, Taiwan, Russia and Ukraine, the situation in Iran, and Trump’s planned trip to China in April. Trump also noted that China is considering additional purchases of US agricultural products, including increasing soybean imports to 20 million metric tons for the current year—an increase of 8 million metric tons.
Following the news, March soybeans gained 55.75 cents and reached a high of $11.1525, a level not traded since December 8, 2025.
Weekly EIA Data:
(week ended 1.30.26)
US ethanol production averaged 956,000 barrels per day, a sharp decline from the prior week’s 1.114 million barrels per day due to severe cold and snow across the Midwest. The weather disrupted plant operations and logistics, resulting in lower output. Production came in at the low end of market expectations of 900 kbpd to 1.111 mbpd and well below last year’s same-week production of 1.080 mbpd. The production slowdown lowered the four-week average to 1.096 mbpd, down from the previous week’s 1.132 mbpd but slightly above last year’s same four-week average of 1.091 mbpd.
US ethanol stocks totaled 25.136 million barrels, within market expectations of 25.0 to 25.7 million barrels. Despite the sharp drop in production, stocks declined by only 264,000 barrels, compared with the previous week’s draw of 339,000 barrels. Stocks remain 4.8% below last year’s same-week level of 26.412 million barrels and in line with the four-year average for the final week of January at 25.065 million barrels.
US ethanol exports remained strong, averaging 216,000 barrels per day. This compares with 157,000 barrels per day the prior week and the four-week average of 178,000 barrels per day.
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