Soybean Outlook: China Demand, Brazil Weather and Signs of a Harvest Low

[PAUL YEAGER] Welcome back to the table for the Friday, October 30th, 2026 installment of Market Plus. Brad Matthews back with us. Okay, Brad, you, I think I asked you this the last time you're getting used to all these questions and me having going blank, I have to admit, I listened to everything you say, and there's a couple of things I try to not write a lot of notes, but there's a couple of things that you said I want to start with here. First, could you, for the record, define the commercials? You talked about that in a couple of the commodities in the main TV show. But tell me what These commercials are. 

[BRAD MATTHEWS] It's going to be more of the end users. They call it the producer merchants. So, when a farmer sells corn to an elevator, they have to take a short position. When that corn gets moved, they have to lift that short position. If somebody's coming in and buying corn, that's going to be a long position. So, when you're seeing the short positions by the commercials shrink, that means that the demand and the corn is actually being used and being moved on from. 

[YEAGER] And commercials could be anybody that's buying, but mostly not the farmer who is going to walk the corn off the farm with an animal. 

[MATTHEWS] It could be potentially somebody buying feed if they're buying it from the elevator, potentially, but it's usually going to be the bigger boys. 

[YEAGER] All right. I appreciate that. Thank you. The other thing I want to talk about, John Roach used to always talk about being the side of the boat. Sometimes there's a whole bunch of people on one side of the boat, and there's something to be said about being on the other side of the boat right now. Which commodities do you think that we're maybe a little balanced -- I guess we wouldn't be balanced -- we're a little too far on one side of a boat. 

[MATTHEWS] Before the break would have been corn, right? I mean, corn, it was a record long position. And that's what got everybody caught off guard is because when you had back to back, I mean, it was a nine day window, a Wednesday, which was the end of September, followed by the following Friday, October WASDE. And that nine day period had back to back bearish report. And that was huge fund liquidation. And that's what wiped out the market. And that was because everybody was extremely long at that point in time. 

[YEAGER] And that's then what about now. Is there any of these commodities where you feel that the boat might be leaning one way or another? 

[MATTHEWS] Wheat, the boat is leaning very short now in Chicago, wheat and corn, I would say they're getting closer to neutral. I mean, the last report showed about 50,000 net long, but that doesn't include the last three days. We were down more. So, they're probably sitting there closer to neutral. The question is with all the inflation that's out there, do the funds really want to take a big net short position? My belief is no. So, I think that they've liquidated enough or close to enough there. And I think that they are getting on the aggressively short side in the wheat market. 

[YEAGER] So, is there anything that's record long that you would want to be maybe taking advantage of, of somebody in that position? 

[MATTHEWS] I wouldn't say corn, beans, wheat, hogs, cattle? I would say no. The only one that's still a little concerned is soybeans. They're not record long, but they still had a pretty long position. And that's why you're seeing more pressure. Even with all the export sales that we were seeing to China over the last two weeks, why we've continued to go down, it's because the funds are still getting out, because they have the contracts to still get out of. 

[YEAGER] Okay. And the commitment of traders, I think also we're going to get a second look during the week now starting next week?

[MATTHEWS] I believe it's December. 

[YEAGER] Oh, it's December. 

[MATTHEWS] I think it's December. 

[YEAGER] So what does that mean then for the average person? 

[MATTHEWS] Well, I guess it's just a little bit more transparency, more often you're going to see what the funds are actually doing. Because right now, when you get it as a Friday, it's technically as of Tuesday's close, you have a three day lag, right? So, it's always something it's a little behind. It's still going to be a little bit of a lag, but it's going to be less of a lag and you're going to get it more often. So, you have, like I said, a little bit more transparency of what's actually going on.

[YEAGER] Which might be indicative of what truly is happening more in the market on any given time. 

[MATTHEWS] Yes.

[YEAGER] Less of a surprise. 

[MATTHEWS] It's better for the market. I'm happy to see them do that. 

[YEAGER] And we're going to get into a little bit more about what the market is telling us right now with some of the questions. So first, before we get started, Dan in Oregon, thank you for your question. I stole it, I used it in the TV show. Thank you. But first I want to go Holt's View Farms to start our discussion off here with Brad. Looking forward to the next year's crop season. Which commodity are you most favorable to, corn or beans? 

[MATTHEWS] I said earlier, beans. I stick to it. I believe that the demand in beans is completely understated, and the lower you go and the longer we take price down. I'm not saying we're done going down now, but the longer you stay down, the more bullish it gets. Big picture to me. I truly believe China is going to buy all 25 million metric tons. I don't think the what happened in real matters. I don't think the size of South American crop matters. I believe they're buying it for political reasons. If the super El Nino happens, though, and they don't have the crop that they're supposed to have in South America, then it gets even more interesting. 

[YEAGER] Hold on. That's the next question, because I got to ask a follow up that you just opened up the door to Tuesday's election. Let's say that changes one political dominance. Does that change anything with China? 

[MATTHEWS] I don't think it's going to change a lot with China right now. I think it's going to potentially change after Trump's presidency. I think as long as Trump is still in as president right now, I don't think that they're not going to honor the commitment of the 25 million metric ton. 

[YEAGER] All right, let's go to that El Nino question, then, that you were referring to, Roger in Nebraska is going to tee this one up for you. Is the super El Nino in Brazil enough to fuel a rally and improve U.S. exports? 

[MATTHEWS] It can be way more than enough. It depends on how much production they lose. But the thing is, if China is buying the 25 million metric tons, our prices are going to go higher to where we're going to have to see our demand to non-Chinese buyers shift, right? Those guys are going to shift to South America. South America doesn't have it. They're not going to be able to shift, and our demand is going to stay too strong. So, I absolutely think that if you have something where they lose ten, 15% of their production, prices could get very, very hot in soybeans. 

[YEAGER] And that's kind of been a common talking point at what I asked you this earlier, but what's a time frame to look at when this truly is unfolding? Is that something we know by Christmas, by the first of the year, February 1st? 

[MATTHEWS] It seems to be that December through February, sometime in that time slot, is when a major high comes seasonally on a rally out of South America. There's already some issues, you know, it's too wet. And in areas of southern Brazil, central and northeastern Brazil starting to develop a little bit of dryness, but it's still a little early. So, we'll know a lot more as we get into the winter months. 

[YEAGER] All right. Well, that's always something to watch. You can't take the winter off, I guess is what you're saying. Stephen in Nebraska, I want to let you know we did answer your question in the in the program about the cattle on feed report. So, let's go, Eric, in Ohio next, if we could please. Are there any indications, Brad, are there any indicators showing that the bean market has reached a bottom? What would they be? What would be those indicators? 

[MATTHEWS] The funds. I think we'll have to see more transfer of ownership of the funds, getting out of more of their longs, while the commercials are getting out of more of their shorts, and you don't see a big decrease in price, meaning that the transfer of ownership is changing hands. You still have a big, long position to where they could leak out a little bit more. The 200 day moving average in January, soybeans is around $12. It's possible that it might need to go challenge that a close above 1280 lows are in. Look out, we're going a lot higher. 

[YEAGER] When I get a warning like that, I have to sit up straight when I say it. Conversation with farmers. You mentioned the September report. October report. Let's do this question. I didn't think we were going to, but I, I can't resist a week. Let me set this up before you put that question on the screen. A week ago at this time, we received news from USDA about a change in a report that everybody was talking about. So, let's now do the question, Jeremy, in Michigan, can or will we see a market correction to go with the USDA's WASDE correction? 

[MATTHEWS] So if he's asking if we're going to see a market correction -- the correction that they made in September was minimal to where it made no difference, because you still were then trading the October number. The question now becomes, is there an adjustment from their October number in November? Because we haven't seen an adjustment in October. So right now, we're still trading the 181.2. We're trading the 11 bushel higher Nebraska yield that a lot of people are having a hard time with is irrigated versus non-irrigated air counts, which I'm not even going to try to get into. I do believe that yield is too high based on what changes they have currently made, where they have the state of Iowa, where they have the state of Nebraska, where they have the state of Illinois. All those seem a little high to me. So, I believe yield does need to come down. I don't know if you see it in November or if we're waiting until January before we see that.

[YEAGER] it's not uncommon for government reports, USDA included, to have some adjustments from before. They'll say, you know what, we're adjusting August. We're adjusting September, whether it's the consumer price index or WASDE like this. So, there is precedence. It's not like it's unheard of. But the damage is done to the market. Are people angry that call your office and want to talk about that?

[MATTHEWS] There seems to be a lot of people that are a little angry and a lot of people talking about not really having interest in filling out the reports anymore. I mean, from what I've heard, out of the state of Nebraska, Illinois, the different farm bureaus that have reached out to Nass that have reached out to USDA, there seems to be a lot of complaining, more than I would say, than I've ever heard before, because they just want to understand how they came about it. Just give us the explanation, explain this to us, because it doesn't make sense to people right now. 

[YEAGER] Well, Nass spent the summer, they were at the Iowa State Fair. They were doing listening sessions, trying to figure out how to improve the situation. But there is still this hesitancy from some producers to fill out that information. And then if you don't get that information, then you're stuck with either private estimates or crop tours as your only data source. And we could get into the whole USDA history for another day, but we'll save that for the next time. Let's close with something fun. Let's talk debt, shall we? Dan in Nebraska is talking about debt cycles, and he thinks that we are in phase two of a debt cycle environment. And he's talking about the persistent inflation that's come with higher input costs like energy and fertilizer. Now, given the historical and current technical setup points that we see what happens next?

[MATTHEWS] I would believe higher prices for grains. With that, you're going to need to make sure that you lock in the acres and to be able to afford to plant those crops with where those inputs are, you're going to need to have higher commodity prices to go along with it. So, I believe that that is going to be beneficial to the grains in the long term. 

[YEAGER] Long term, years or months? 

[MATTHEWS] I think that we're trying to find bottoms right now. It can take a little bit. You're not just going to go, like I said, screaming higher, but you know, three, four, five, six months from now, should we be working our way higher? Yes. 

[YEAGER] A couple other things before we leave. Screwworm cases had changed in a couple of states. The borders reopen. Do we see any change or any whispers of policy that might reclose borders and reverse what we've just done? 

[MATTHEWS] You know, I guess that's possible. I haven't heard anything about that. And I don't know if we did, obviously, that would be very beneficial to the price of cattle again, but I have not heard anything about that.

[YEAGER] I haven't either. But it's just a matter of sometimes you just don't always hear. So that's why I ask. Brad Matthews thanks for sitting in the hot seat this week. Great to see you as always. 

[MATTHEWS] Thank you, I appreciate it. 

[YEAGER] Thank you Brad. Next week, how a changing climate is redrawing the map for global fisheries and Ted Seifried will sit right over there and break down the markets for us. Thanks for joining us. Have a great week. 

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