Soybeans Test and Fail the 200-Day Moving Average for the Tenth Time This Year - 1/27/26

(Chicago) January 27th, 2026 - Corn remains under pressure as the market continues to discount near-term demand growth from biofuels, even amid ongoing policy discussion. While year-round E15 remains a political talking point, any meaningful expansion would require congressional action, which was effectively punted on last week. US ethanol production capacity has grown only marginally in recent years and plants are already operating near practical limits, leaving little room for incremental corn grind in the short run. At the same time, export sales are seasonally slowing and global competition from South America and the Black Sea continues to weigh on US market share. A weaker US dollar has offered some marginal support, but without a clear, executable demand catalyst, corn futures have struggled to attract sustained buying interest and continue to trade defensively.

Soybeans again tested the 200-day moving average, now near 1068½, marking the 10th session this month the market has traded through that level but failed to secure a decisive close above it, reinforcing the view that rallies are encountering persistent overhead supply. Recent strength has been driven primarily by soyoil gains and aided at the margin by a weaker US dollar, but follow-through buying remains limited by the same demand-side uncertainty weighing on corn. Ongoing questions around renewable fuels policy, including the Renewable Volume Obligation, the impact of Small Refinery Exemptions, and unresolved details surrounding the Clean Fuel Production (45Z) tax credit, have prevented the market from pricing durable biofuel-driven demand. With renewable diesel run rates recently reduced, cash soyoil stocks building, and USDA demand assumptions increasingly under scrutiny, soybean futures continue to treat policy headlines as optional upside rather than a confirmed shift in underlying fundamentals.

Wheat continues to trade with more underlying support than corn or soybeans, driven less by demand expectations and more by ongoing supply uncertainty. While global wheat stocks remain ample on paper, production and export flows are highly concentrated, particularly in the Black Sea region, where weather variability and policy controls continue to inject risk premium into the market. In the US, parts of the HRW belt remain vulnerable as the crop moves toward spring green-up, keeping yield potential and winterkill concerns in focus. A weaker US dollar has improved marginal export competitiveness, but like corn and soybeans, wheat lacks a clear demand-led catalyst. As a result, wheat prices have been more resilient but also more headline-sensitive, with rallies driven by supply risk rather than a shift in underlying consumption trends.

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