Market Bullets® Friday, October 31, 2025: AM
The air is slowly seeping out of the wheat price after Thursday’s brief meeting between Presidents Trump and Xi. It’s not that the market is disappointed, although the pre-meeting hype had been getting a bit thick. The results were not negative, we just were looking for a little more clarity. Now the expectations for Chinese ag purchases of soybeans and wheat will require some time to be fulfilled, and fentanyl precursor shipments from China and other Asian sources may be curtailed, but the big fish was rare earth metals and mutual tariff relief.
Without USDA data, the market is running on autopilot, private anecdotes, and authoritative statements by private trade sources. This has the effect of fog on ships and planes; it slows everything down. The market can’t see Chinese purchases on the screen in near real time, so we make do with rumors.
There is next to nothing on the wire services providing directional power, so the market will go back to grinding sideways.
It is month-end, so there is some profit-taking by early buyers in the recent rally. After the weekend we will pick up where we left off by first measuring the retracement depth of the current pullback. The renewed testing of the long-term lows is underway once again.
The Chicago Soft Red Winter (SRW) December futures contract will attempt to close below the Box-o-Rox indicator line (the solid green line on our Daily chart) which would turn the status back to “Execute planned incremental sales”. Our default calendar date for each month’s sales is the 1st, so November may act as if no rally ever took place.
The trend status is still positive until that “below the line” closing price is printed.
Stay tuned. A new chapter is beginning, and there are factors to watch.
“There is nothing wrong with your television set. Do not attempt to adjust the picture…You are about to experience the awe and mystery which reaches from the inner mind to…the Outer Limits.”
-Gary
Market Bullets® Thursday, October 30, 2025: Pre-Dawn
As this is written on early Thursday morning, October 30 in Pacific Daylight Time (UTC-7), the meeting between President Trump and President Xi in Busan, South Korea is over. It lasted 1 hour, 41 minutes, surprising some observers in its brevity.
China bought soybeans on Wednesday, ahead of the meeting in Busan. The psychology of this timing is fascinating; A possible gesture of good-will, expressing the Chinese desire to draw success from the negotiations. It could have been a way to blunt the soybean spear, and it did seem to reduce U.S. ag products’ emphasis in the talks. The bean sale is said to be for 180,000 metric tonnes (about 6.6 million bushels) for delivery December/January, for what may be considered slightly larger than a token volume. No wheat has been traded or discussed, at least according to the rumor and newswire vibes. The availability of fresh sales data is muted, with no active official USDA reporting until the government funding hiatus is ended, so the confirmation came directly from the U.S. Ag Secretary Brooke Rollins on Wednesday.
Wednesday’s early AM trade session in beans showed a fading price but soon reversed into positive territory (about +5 cents). At 3:20 AM Chicago Soft Red Winter and KC Hard Red Spring (HRW) wheat futures were both down $.10 to $.12, giving back about 30% of the last two week’s gains, but also expressed some buying energy in the next couple of hours and were trading Hard Red Spring (HRS) down 4-5 cents, Chicago and KC both -4-5 cents and Paris Milling Wheat was indicating an equivalent negative 3 cents per bushel. The pattern showed some disappointment that there was not a “big, beautiful agreement” signed, but still ok with the renewed status quo.
The old saw goes, “Buy the rumor, Sell the fact”, but this situation is a bit larger than a short-term trade. The market is whispering, “show me”. Have a look at yesterday’s, October 29, 2025, Pre-Dawn comment, “If Trump shrugs…”
The wheat market is recalibrating in the light of eased trade tensions between the U.S. and China, but details remain on many points. Wheat was absent or at least not prominent in any of the post-meeting summaries. The reset underway is just a technical retracement of a very fast rise of some 43 cents in two weeks in the runup to Thursday’s meeting. Now the technical job is to test the strength and conviction of the wheat price rise. Thursday’s trade session will deliver some of that data.
Completely overshadowed by President Trump’s visit with Chinese President Xi was the Federal Reserve interest rate cut of 0.25%, a decision acknowledging the already lower interest rates in the market. The 2-year Treasury Note promptly declined in price reflecting a higher interest rate, the opposite of “normal” behavior after a Fed cut. We will need more data to visualize the trend in the cost of money.
What we are left with is a vision of a long road ahead, with trade negotiations on multiple fronts, a one-year deadline and a pending southern hemisphere wheat harvest.
The wheat market remains in the very early stages of a potential reversal upward that must now prove itself in a tough environment. For the while, we are on “Suspend incremental sales” status that may be short-lived.
Stay tuned.
Market Bullets® Wednesday, October 29, 2025: Pre-Dawn
Early morning hours of Wednesday had Chicago Soft Red Winter December futures taking a breather, down 1 cent at $5.28, now 36 cents above the low of October 14th (a 5-year low on continuation charts). The driver of the grain prices for the last 72 hours of trade has been a sense of anticipation of new and positive developments in global trade via a “Framework” deemed “very positive” by some credible sources. The market has begun to price in this ebullient atmosphere, but it’s time for a gut-check. We have had little confirmation of tangible agreements and there is a sudden calm. The wheat (and other grains) complex has paused to measure.
There is no reason to sell here, right? The Chinese/U.S. escalation of trade tension over the last few months came to a head over the Chinese tossing their “Rare Earth Global Supply Control” card on the table. The crowd gasped! President Trump saw their bid and raised them a new 100% tariff along with a couple of new trade agreements in Asian countries. Has China blinked? There is no doubt that there is a quiet among the gallery. Chinese officials are more measured and cautious, calling it a “preliminary consensus”.
The market is in effect saying “OK, now show us the money”. We believe in what the market is saying, that the efforts so far appear to be excellent, but the process has not gone far enough to go all-in. It would be foolish to sell out, as well. It’s time for “The pause that refreshes.”
Let’s talk about a plan for the result of the “Big Meeting” in Busan, S. Korea on Thursday, October 30th. The following seems intuitively sound, but it is only blowing smoke rings for now…
If it comes out that there are trade agreements between China and the U.S., that they will buy wheat and soybeans, allow access to rare earth metals, etc. Then the market is likely to celebrate. We will reinforce our “Suspend Cash Sales” of wheat status and watch other parts of the world for a while.
If Trump shrugs and says, “We still have work to do on this”, then wheat producers will likely be presented with a “consolidation” trade pattern, giving back some of the gains of the last week of trade. We will go back to grinding out a fundamental base for a rally, with more testing of lows and sideways price movements. There won’t be much time to scalp off much of the recent gains, such as they are.
Meanwhile: Russian wheat continues to be the cheapest in the world, and their approach to selling is constantly evolving. The Russian Ministry of Agriculture continues to promote the Russian Grain Union’s idea of “direct” sales, ensuring that "Russian grain should be supplied to consumers only by Russian exporters" to discourage “dumping” by intermediaries”, in addition to ceding more direct control over prices and destinations by the Russian administration (That has been met with raspberries from the trade).
Russia harvested 93.5 million metric tons of wheat in 2024-25 according to SovEcon. Several Russian regions earlier this year declared emergencies on extreme drought conditions. The Russian deputy ag minister stated the country expects to cut back winter and spring wheat area by 6.2% this year, with acres shifting to oilseeds. The Russian Ruble
The Australian wheat harvest for 2025, already seeing early progress, is expected to be a large one, with official forecasts around 33.8 million tonnes, an improvement over earlier estimates due to favorable rainfall.
Argentina's 2025/26 wheat crop is healthy, potentially tying a record with an estimated 23 million metric tons coming on abundant rainfall and favorable soil moisture. The Buenos Aires and Rosario grain exchanges both report that nearly all of the planted area is in normal to excellent condition. Their harvest is expected to begin soon and conclude in January.
The supply-side news is all old and already built into the global futures markets. It is the demand side that is top of mind for the trade.
Curiously, the global demand total is measurable, unlikely to shift dramatically. At the end of the marketing year, the buyers will have bought what they need, doing their best to be thrifty and efficient in the process. The only way to win a buyer’s heart is through low prices, and there are very few sellers willing to discount much to secure sales. There are few places in the world where producers have the capacity to hold onto wheat very long, and we are the leaders of that pattern. Just sayin’.
The trend has shifted toward a positive slope. There are never any guarantees that prices will continue to rise, leaving us with the task of optimizing sales in a changing market. Our best approach is to try to hold in a rising market and to be an aggressive seller in a falling one. Our only problem then is to be aware of the trend, while minimizing risk. It would be dull, indeed, if it were otherwise!
Stay tuned.
Market Bullets® Thursday, October 23, 2025: Close
If I were short, I would reduce position (see red, 20-day line on BoR Chart). It may only be a flash, but the timing is reasonable after such a long decline. Its not a trend-change yet.
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Good hunting!
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Chicago Soft Red Winter (SRW) Wheat Futures in 30-Minute Candles