Advice alerts – Cotton producers: Advance 2025-crop sales... Nearby cotton futures pushed above our 65-cent target in trade earlier today. We advise cotton producers to sell another 5% of production, bringing total sales to 20%. Livestock producers: Extend feed coverage... We advise livestock producers to cover through March for soymeal needs in the cash market. Check our advice monitor at ProFarmer.com for updates to our marketing plan.
Some of the world’s largest investors are set to begin selling last year’s winners and buying last year’s losers in the commodities markets on Thursday as the annual rebalance of two closely tracked indexes gets under way.
The event takes place every January, beginning on the fifth trading day of the month and running over the course of five trading days. That means from Jan. 8 to 14, investors and funds who track the Bloomberg Commodity Index or the S&P GSCI commodity index, will be adjusting their portfolios to meet the new 2026 weightings that were announced last fall, while also accounting for market moves over the past year that have left them over- or underweight exposure to individual commodities.
That indicates significant selling of silver, gold and other precious and industrial metals that sharply outperformed the indexes last year, and purchases of laggards. The addition of cocoa to the Bloomberg index for the first time is expected to spark significant purchases of the commodity.
But while the annual event promises some large, near-term money flows, past history suggests markets tend to take it largely in stride. In other words, the rebalancing alone is unlikely to provide game-changing tailwinds to soybeans, wheat or other agricultural commodities that underperformed the broader indexes in 2025, nor is it likely to be enough alone to sink last year’s winners, including cattle futures.
The main movers will be large, institutional investors – think pension funds, endowments, sovereign wealth funds – who use the indexes to maintain long-only exposure to commodities as portfolio diversifiers. Index-tracking ETFs and other funds are also part of the mix. The expected moves are no secret, and some front-running by speculative traders is often seen beforehand. The rebalancing itself often sees big increases in volume, particularly toward the end of trading sessions. But for the most part, the event tends to go off without sparking an appreciable jump in volatility, noted Jake Hanley, managing director and senior portfolio strategist at ag-focused ETF provider Teucrium. He noted that volatility across commodities in January over the last five years has been lower than in the rest of the calendar year.
The big market mover for agricultural commodities is almost certain to be the Jan. 12 release of the USDA’s final crop production estimates and World Agricultural Supply and Demand Estimates.
“To the extent that there is any volatility related to this, don’t get too worried or excited about it,” Hanley told Pro Farmer. “I think it’s more a back office situation for the traders.”
Quotable…”A bull market in industrial metals continues on and I eventually expect it to be joined by energy and agriculture,” said Peter Boockvar, chief investment officer of One Point BFG Wealth Partners in his closely followed “Boock Report” newsletter on Wednesday.
“Corn by the way is just a nickel from the highest since May 2025. Soybeans are well off their November highs though at just over $10 a bushel. Wheat a year ago was $5.40 a bushel vs today’s level of $5.13. The CRB Food Stuff index is 15% off its 2025 peak of 560, currently at 476 as of yesterday’s close helped by the pullback in cocoa,” he wrote.
Brazil set to pass U.S. in beef production…Brazil topped the U.S. as the world’s top beef producer last year, Reuters reported, citing market estimates, with the country beating output forecasts by hundreds of thousands of tons. Brazil was already the biggest beef exporter, with meat shipments of almost $17 billion, government trade data showed Tuesday. Beef production numbers aren’t due until February, but analysts have been raising estimates as farmers send more animals to slaughter in response to high export demand, the report said. While that has led some analysts to call a turn in Brazil’s cattle cycle, Reuters reported that industry participants expect efficiency gains to damp or even prevent a downturn.
Flipping the pyramid…The Trump administration on Wednesday released new dietary guidelines that flipped the food pyramid, putting meat and dairy near the top.
Unlike the old pyramid’s grain-heavy base and processed carbs, new recommendations limit whole grains to 2 to 4 servings per day and added sugars and highly processed oils should be avoided entirely. AgWeb: New Dietary Guidelines Move Food Pyramid Closer to the Farm
Coalition presses for year-round E15…In a letter sent Wednesday to congressional leadership, more than 70 biofuel and agricultural organizations called for the immediate passage of legislation to allow year-round nationwide sales of the U.S.-made E15 fuel blend, containing 15% ethanol. “The U.S. Department of Agriculture projects a record 16.8-billion-bushel corn harvest in 2025—up roughly 13% from 2024,” the groups wrote. “While this demonstrates the strength and productivity of America’s farmers, it also intensifies pressure on corn prices and farm incomes. Expanding E15 access is one of the most immediate and practical ways to address this imbalance.” The letter was led by the Renewable Fuels Association, American Farm Bureau Federation, Growth Energy, and the National Corn Growers Association, according to a joint news release.