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The new year didn’t do much to lift spirits. Instead, the January Purdue University-CME Group Ag Economy Barometer reflected a big downturn in farmer sentiment. Deepening worries over farm finances and the outlook for exports was a big driver, the survey found.
The poll was conducted Jan. 12-16, on the heels of the release of the Jan. 12 USDA crop production and supply-and-demand reports, which sparked a grain market selloff, particularly for corn.
Here are some of the key findings:
- Sharp Sentiment Decline: Both the Index of Current Conditions (down 19 points to 109) and the Index of Future Expectations (down 25 points to 115) saw major retreats. The five-year outlook for the ag economy hit its lowest level since late 2024.
- Worsening Farm Finances: Half of the surveyed farmers reported their operations are in worse financial shape than a year ago. Looking forward, 30% expect their financial performance to weaken further in 2026, while only 20% anticipate improvement.
- Rising Debt Concerns: There is a notable shift in the reasons for increased borrowing. Of the 21% of farmers expecting to take out larger operating loans, nearly one-third (31%) cited the need to carry over unpaid debt from the previous year, a massive jump from just 5% two years ago.
- Pay it down: Asked about how they planned to use Farmer Bridge Assistance payments due to be delivered by the end of February, over 50% of the respondents said they would pay down debt. Another 25% said they would use these payments to improve working capital, while the remainder said they would be used for family living (10%) or to invest in farm machinery (12%).
- Export Anxiety: Pessimism regarding U.S. ag exports jumped significantly in a single month, with 16% of producers now expecting a decline over the next five years versus just 5% in December. Soybean and corn growers are particularly worried about Brazil’s growing competitiveness, with 80% saying they were concerned or very concerned over losing market share.
- Investment Pullback: The Farm Capital Investment Index dropped to 47, its lowest point in over a year. Just 4% of producers plan to increase machinery purchases, as high interest rates and tight margins force a “wait-and-see” approach to capital spending.
China’s ‘No. 1’ priority: There’s no need to tell U.S. soybean farmers that China is looking to diversify the sources of its agricultural imports. While a trade-war-induced 2025 soybean boycott dealt a blow to U.S. sales to the world’s No. 1 soybean importer, a rural policy blueprint discussed this week by Chinese officials underscored that diversification is a top priority.
The State Council’s “No. 1 document” says China will look to stabilize grain and oilseed output, diversify agricultural imports and boost support for farmers, Reuters reported, citing state media. The document, a blueprint for ensuring food security, comes as Beijing prepares its next five-year plan amid growing trade frictions, a slowing domestic economy, and climate-related challenges.
The report noted the document mentioned diversification three times, up from once in 2025, and emphasized plans to expand oilseed supplies, diversify the food system and broaden agricultural imports.
- When it comes to soybeans, the blueprint shifts from consolidating expansion in 2025 to consolidating and enhancing production capacity, Even Rogers Pay, director at Beijing-based consultancy Trivium China, told Reuters.
India trade deal cheers soyoil bulls: It was a big day for soybean oil futures Tuesday, with the release of a long-awaited rule proposal for the clean-fuel tax credit known as 45Z getting most of the attention. That wasn’t the only reason for the rally, however.
Soyoil futures were boosted overnight after President Donald Trump unexpectedly announced a trade deal with India. Bloomberg noted that shortly after Trump posted the news, which was confirmed by Prime Minister Narendra Modi, soybean oil’s premium to Malaysian palm oil widened to the most in over a week. Soybean oil, the report observed, is one of the few major farm products that India imports in significant quantities.
Details around the deal, however, remain thin on the ground. Trump said India agreed to buy over half a trillion dollars worth of U.S. products, including farm products, but didn’t provide a breakdown. Agriculture had been a major sticking point in the talks, Bloomberg said, as New Delhi sought to protect farmers that account for around half of the country’s workforce.
- Also, USDA Monday afternoon reported U.S. soy crushings totaled 229.865 million bushels in December, below most analysts’ average of 230.5 million bushels. The figure, however, was a record for the month of December but shy of October 2025’s all-time high of 236.346 million bushels. Soyoil demand remained robust at a record 2.497 billion pounds for December, bringing U.S. soyoil stocks well below expectations, at 2.179 billion pounds.
March soybean oil gained 129 points to 54.49 cents Tuesday, its highest close since August.
AI fears jolt tech stocks: Fears artificial-intelligence will steal business from software companies sparked a stock-market pullback Tuesday. Big losses for big-name software companies dragged the tech-heavy Nasdaq down by 1.4% while the S&P 500 and Dow Jones Industrial Average also ended lower.
- The focus was on an announcement by AI firm Anthropic, which said it was adding new legal tools to its Cowork assistant that would help automate legal drafting and research tasks.
- Software companies that serve the legal field were hard hit, with shares of Thomson Reuters falling 15% and LegalZoom dropping nearly 20%, while business development companies (BDCs) that have funded a slew of start-ups in that sector also saw steep losses.
- Worth watching: Bloomberg noted that fears of disruption have rattled credit markets globally, sending software loans in what’s known as the broadly syndicated market lower last week. As publicly traded entities, BDCs provide a real-time window into the otherwise opaque direct-lending market, the report noted.
Wings over the Super Bowl: The National Chicken Council is projecting Americans to eat 1.48 billion chicken wings watching the New England Patriots and Seattle Seahawks battle for the Lombardi Trophy in the Super Bowl this Sunday. This figure represents an increase of about 10 million more wings than last year’s game.
Don’t miss these Tuesday must-reads:
Landowner defeats feds in mind-boggling private-property case
Farmer financials: From a yellow light to a check-engine warning
More DEF relief? EPA takes new action for farmers and truckers
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