OSU’s Dr. Todd Hubbs: Soybean Rally Offers Pricing Opportunity Amidst “Wishy-Washy” Global Markets and Drought Concerns
The grain markets are seeing significant movement this week, driven by geopolitical headlines and social media posts from the White House. Farm Director KC Sheperd recently caught up with Dr. Todd Hubbs, Oklahoma State University Crop Marketing Specialist, to discuss the sudden rally in soybeans, the stagnant wheat market, and the intensifying drought conditions in the Southern Plains.
The Soybean Rally: Real Demand or Selling Opportunity?
The headline story this week is soybeans. Following a social media post from President Trump suggesting China intends to purchase an additional 8 million metric tons of soybeans—potentially bringing total commitments to 20 million—the market responded with a sharp rally.
While the news is welcome, Dr. Hubbs advises producers to exercise caution.
“I haven’t heard any confirmation from China,” Hubbs said. “What I do know is that Brazil is harvesting what is probably going to be the largest crop they have ever made, and it’s coming to market.”
Hubbs notes that while an additional 8 million metric tons would equal nearly 300 million bushels, it is unlikely to translate directly to a one-for-one reduction on the balance sheet due to stiff global competition.
“This kind of rally… I love seeing it, but it’s a pricing opportunity in my opinion,” Hubbs advised. “At these higher prices, with Brazil’s crop coming in, it would be highly competitive. Will it shrink the balance sheet some? Yes. Will it shrink it 50 cents worth? I doubt it.”
Wheat Struggles to Break Resistance
While soybeans rally, wheat remains stuck in a holding pattern, struggling to break through the $5.00 to $5.55 range. According to Hubbs, the market is currently weighed down by a lack of supply disruptions.
“We need to get some kind of crop failure somewhere that is provable,” Hubbs explained. “I sort of hope we get an outside market rally from something like this soybean rally, but it is just not happening very much.”
Despite fears of winter kill in the Black Sea region last year, those concerns have largely faded. Meanwhile, the U.S. continues to face heavy competition from the large 2025 global wheat crop.
“We are on pace for USDA’s number [on exports],” Hubbs said. “We are moving the wheat out of the country. We’ve got a lot of it though, and the competition is stiff.”
Drought Returns to the Southern Plains
One factor that could eventually influence prices is the return of dry conditions. While the National Drought Monitor shows improvements compared to last year, the Southern Plains are experiencing a different reality.
“It is really dry here in the Southern Plains,” Hubbs noted. “It seems like someone turned off the faucet around this time of year, and they won’t turn it on again until spring. The drought is really building.”
Corn and Ethanol: A Bright Spot
On a more positive note, the corn market is finding support through domestic demand, specifically ethanol production. Hubbs highlighted that the crush rate has been strong since December 2025, supported by the finalization of the 45Z clean fuel tax credit.
“We have a good year ahead of us for ethanol grind in corn,” Hubbs stated. “I think we have a positive demand scenario for corn.”
However, he warned that for corn to hit the USDA’s 5.6 billion bushel demand target, exports must remain strong to complement the domestic ethanol usage.
Global Chaos and Trade Deals
Looking at the broader economic picture, Hubbs described the current geopolitical landscape as “chaotic,” citing unresolved conflicts in Ukraine and uncertainty in the Middle East as potential flashpoints that could cause short-term market shocks.
Domestically, the agricultural sector is keeping a close eye on the USMCA (United States-Mexico-Canada Agreement) review. With rumors circulating about potential changes to the trade deal, Hubbs emphasized its critical nature for U.S. agriculture.
“I can’t imagine a scenario where we scuttle the USMCA. That would be not good,” Hubbs warned. “We need Mexico and Canada.”
The Bottom Line
With a “wishy-washy” economy and a weaker dollar making U.S. exports more competitive, the market remains volatile. Hubbs suggests that producers looking to price old crop should watch the upper half of current trading ranges for opportunities, particularly given the uncertainty leading up to the USDA reports in late March.
“We see these little rallies that get up near the top of that thing, and then they come all the way back down,” Hubbs concluded. “I don’t see that stopping anytime soon.”
