One Hoop or Three? The Hard Truth About Beans, Cattle, and Market Discipline

Momentum Is Exciting. Margins Are Reality.

The Discipline Test in Soybeans

Soybeans have done what soybeans do best. They’ve surprised people.

Funds piled in. Headlines about China circulated. Prices moved fast. And when a market moves quickly, it creates emotion. That emotion usually sounds like this:

“What if this time is different?”

Before you answer that question, look under the hood.

Spreads aren’t confirming aggressive commercial demand. Export inspections haven’t exploded. South America is harvesting. There’s no clear evidence of a supply shock.

That doesn’t mean beans can’t go higher. They absolutely can. Funds can push a market farther than fundamentals suggest. But if your marketing plan requires three separate bullish events to justify holding — a major China purchase, a biodiesel surprise, and a weather scare — you don’t have a strategy. You have hope.

A better approach? One hoop.

If China makes a large, confirmed purchase beyond expectations, maybe that’s your trigger. If biodiesel policy shifts materially, maybe that’s your trigger. But narrow it down. Discipline beats imagination in commodity marketing.

For producers with old crop in storage, the real question isn’t “Can it go higher?” It’s “What am I paying to wait?” Storage costs money. Time is risk. If you continue holding, know exactly what outcome you’re holding for.

For new crop, this price level likely warrants doing something. Not everything. But something. Protection does not require panic — it requires planning.

The Myth of the All-Knowing Funds

One dangerous trend in today’s market environment is the belief that “the funds know something.”

Sometimes they do. In weather markets especially, large players often have better data and react quickly.

But more often than not, funds are chasing momentum. They are not coordinating on some secret hotline. They do not have guaranteed inside information. And they’ve been wrong in soybeans multiple times over the past two years.

Your edge isn’t guessing what funds know. It’s watching what commercials are doing. Watch spreads. Watch basis. Watch whether the cash market confirms the futures move.

Confidence in marketing decisions doesn’t come from scrolling social media or listening to the loudest opinion. It comes from narrowing your inputs to two or three reliable sources and cross-checking the story.

The most expensive words in marketing are: “I almost pulled the trigger.”

Cattle: When Good News Stops Working

The cattle market has been in a powerful, supply-driven bull run. Tight numbers. Strong cash. Supportive reports.

But this week, something changed.

Despite supportive data, futures did not respond the way they normally would. That matters.

Commodity markets do not collapse because supply suddenly appears. They collapse when margins break somewhere in the chain.

Right now, the cow-calf producer has been profitable. But feedlot margins are tightening. Packers are struggling to maintain profitability. Retail prices are elevated. When one segment in the chain can’t make money, behavior changes.

You’ve already seen signs: plant closures, feedlots adjusting, pressure building inside the system.

This does not mean cattle fall tomorrow. It does mean risk management deserves more urgency than it did six months ago.

No commodity market in history has gone up forever. Oil didn’t. Corn didn’t. Cocoa didn’t. Eventually, price moves far enough that demand has to recalibrate.

The good news? Beef demand appears structurally stronger than it was in past cycles. That likely means when the correction comes, it may eventually find a healthier long-term equilibrium. But corrections rarely stop at “comfortable.”

Protection in mature bull markets is not bearish. It is disciplined.

Hogs: A Market Setting Up for Opportunity

Hogs are quieter — but potentially interesting.

Summer contracts are carrying sizable premiums relative to the front months. Structurally, the market looks stretched. That doesn’t automatically mean prices collapse, but it does suggest opportunity may be forming in spreads or option structures.

Seasonals still favor strength into spring. But when back months get overextended relative to cash and nearby contracts, the market often hands disciplined traders something to work with.

The key word is disciplined.

Corn: A Different Kind of Frustration

Corn has been the opposite of soybeans — steady, stubborn, and uninspired.

Spreads are improving from recent weakness, which is constructive. Exports have been strong enough to keep the market supported. But there are still bushels in storage, and basis risk will likely become the bigger story.

If you’re thinking about sales, consider this: what are your neighbors likely to do? In a heavy-supply environment, being just a few cents ahead of the crowd can make a meaningful difference.

Again, not panic. Planning.

Final Thoughts: Narrow the Story

Markets get loud when they move.

The best operators get quiet.

If your plan depends on three bullish miracles, simplify it. If you’re ignoring risk because the trend has been friendly, tighten it. If you’re waiting for perfect clarity, you’ll rarely get it.

Whether it’s beans showing momentum without confirmation, cattle flashing subtle warning signs, or hog spreads stretching out — this is a moment for intentional decisions.

Have one hoop.

Know your trigger.

And when your criteria are met, act with confidence.

If you’d like to walk through your specific situation, call Jon at 218-731-1578.

Stay disciplined.