know, I spent the latter part of last week traveling to and from the Quad Cities area. I had been invited to speak at the Rock Island County Farm Bureau market outlook meeting Thursday evening, this one being held at a local winery, The Lavender Crest, a short drive across the Mighty Mississippi River from our hotel in Le Claire, Iowa. I opened my part of the program with the observation the organizer of this year’s event must’ve been a fortune teller, scheduling it well in advance at a place that makes alcohol. I then told the story of my recent interview with Michelle Rook when one of her last questions to me was something along the line of, “What should producers do when making marketing decisions in these volatile times?”. Without thinking, I replied in Paul Lynde fashion, “Drink heavily”. Michelle wanted me to let you know she had to cut that part out, but in her words, it did get a “belly laugh” from her.

As I talked about in last week’s column, my initial plan was to use a similar presentation to what I gave at the annual meeting of a local soybean processing plant this past January. But those plans were skuttled due to developments that began shortly after that presentation and lasting through at least mid-March. For fun, though, I did start with the same look at the economic Law of Supply and Demand, much like what I’ve talked about on our website for many years. But after the quick Economics course, I asked how many were familiar with the Robin Williams’ movie “Dead Poets Society”. Only a few hands went up. I followed with the question, “What did Williams’ character have his class do with the Introduction to Poetry section of their textbook?” No response from the crowd. “Rip it out!”, I repeated, with the next slide telling the crowd fundamentals no longer matter. The only thing that does matter is trend, or price direction over time.

As we know, or at least should know at this point, trend is set by the noncommercial side of the market, largely driven by algorithm trade (aka Watson). And as I talked about in last week’s Column (Just One Thing), Watson does not use classic technical analysis (patterns, trendlines, etc.) or reads on real fundamentals (intrinsic value, basis, futures spreads, forward curves). The past decade has proven time and time again that Watson is easily manipulated by not necessarily the Truth Social media posts, key words strategically placed in “news” headlines, and unfortunately imaginary numbers released by government agencies. The powers-that-be have shown they understand these new dynamics and use them to their advantage, both political and economic.

I told the audience the new dynamics make the job of analysis nearly impossible yet easier at the same time. The reality is analysts cannot account for all the factors being used by algorithms as each could be slightly different creating an infinite number of possibilities. On the other hand, we don’t have to look at charts or our reads on real fundamentals as closely but rather spend more time analyzing news and government generated numbers to see how Watson might next be triggered. (As the situation continues to devolve, the light at the end of the tunnel marking the end of the race grows brighter for me.) At this point I introduced Physics into the discussion, to go along with the brief lesson on Economics 101, by stating Newton’s First Law of Motion Applied to markets: A trending market will stay in that tend until acted upon by an outside force. And that outside force is usually (note the Vodka Vacuity[i] used here) noncommercial (fund, Watson, etc.) activity.

How do we analyze Watson? There are a couple ways, neither having anything to do with actual markets. (Buckle up, it’s about to get a bit confusing.) The first way is to monitor what is called “predictive markets”, the latest phenomenon where websites use public opinion to show the odds of a particular event happening. Anyone – you, me, public officials, Martians, etc. – can “take a financial position” on nearly any subject on these sites, while the rest of the world (universe?) can sit back and track the results. These ever-changing numbers can be fed into Watson as well, so as an analyst, all we have to do is watch the trend of certain subjects to gauge what the next social media post might be to trigger an “official” policy social media post.

For example, on one such site called Kalshi we see the question “How many House Republicans will lose their primary this year?” The response “7 or more” was up 3 percentage points to 46%. Think back to what happened last fall when the party in power did poorly at the polls, with one of the answers as to why came back as high food prices, including beef. This immediately put the US cattle/beef industry in the crosshairs of the White House, resulting in a decree the industry must increase supplies and lower prices. While fundamentals DID NOT CHANGE, the noncommercial net-long futures position in live cattle went from roughly 120,000 contracts in mid-October to 76,000 contracts in early December. A look at the weekly chart for the April live cattle futures contract shows a corresponding drop in price from nearly $251 to $205, a loss of approximately $46 (18%). All on a social media post. Think about that for a moment.

How then do we anticipate what the current US White House, the most powerful market manipulation mechanism the world has possibly ever known, will post next? The past decade has shown us a clear pattern, but I will tell you right now that if you are a die-hard supporter of the administration, stop here. Don’t worry about the rest. You will not like it and will not agree. I can’t apologize for what I, and many others, have observed. Please, note I gave you ample warning to end your reading Now.

Okay, if you have stayed for my analysis of the situation, let’s push on. What I have observed over the past decade:

  • If the US president is concerned about his party’s political showing, similar to what we saw last fall, we will get social media posts meant to move particular markets. I already pointed out what happened with live cattle during the fall of 2025, but we’ve seen it time and time again in the oilseed sub-sector the past 10 years. When complaints over low US prices get loud, there will be a post about how good the relationship between the US president and his counterpart from China is; how China is set to buy everything the US can produce; how US crush demand will be “yuge” of “bigly”, telling us the lack of exports is not important to talk about; and so on. Recently, we saw these play out last fall as the noncommercial net-long futures position in soybeans swelled to 254,090 contracts before falling to 57,400 contracts in late January as reality sank in. Then the posts started again in early February as prediction markets started talking of the Republican party losing seats in both the US House and Senate, driving the noncommercial net-long futures position back up to the latest reported figure of 230,270 contracts. Meanwhile, the May soybean contract has rallied from a low weekly close of $10.5850 on Friday, January 2 to a high weekly close of $12.2525 on Friday, March 13, a gain of $1.6675 (15.8%).
  • If domestic news headlines turn against the president himself (e.g. regarding the Epstein files), then the US will likely launch a military move somewhere around the world to divert the attention of news headlines. Recently, these attacks have been against countries whose dominant export market is crude oil. Since I don’t believe in coincidences, I’m not surprised by the fact the financial winner in the most recent military actions – Venezuela and Iran – has been Russia and its oil rich leader Vladamir Putin (aka Vlad the Invader). To the situation we can now add the “temporary” lifting of “specific sanctions on Russian oil”. Not that it was necessary as recent US military action created more demand for Russia’s cheap crude oil from fellow BRICS[ii] Alliance members.

Therefore, the bottom line is we have to be aware of what is being talked about in the “news” and on prediction websites, for this will dictate what we should expect when it comes to triggering algorithms. It’s a new world for those of us who learned the profession by studying silly things like intrinsic value and weather.

As the question-and-answer period was winding down last Thursday, and there were a lot of questions, one of the last one’s summarized the discussion brilliantly. A gentleman up near the front who had already posed a number of good queries asked, “Based on your Market Rule #1 (Don’t get crossways with the trend), how will you know when the trend has changed?” He referenced our inability to reliably use technical and fundamental analysis. I’ve struggled with this thought for a long time. How will we, I, know when the trend has changed? Given the extreme volatility seen in a number of futures markets, particularly as entire sectors move in and out of the spotlight (e.g. Softs a few years ago, Livestock the last couple years, Energies and Grains so far during 2026), by the time my use of the Four-Week Rule comes into play[iii] market price will have changed dramatically. Fortunately, I have our in-house algorithms[iv] to give me a heads up when change in the industry is occurring. The other answer I have at this time is not good, but the best I can do as an old-school analyst: Apply former Supreme Court Justice Potter Stewart’s test for obscenity, “I know it when I see it”.

Until next time.

Darin Newsom

[i] The Vodka Vacuity: There are no Absoluts in markets.

[ii] BRICS = Brazil/Russia/India/China/South Africa while Egypt, Ethiopia, Iran, Saudi Arabia, and the UAE have been added along the way.

[iii] I wrote about this recently for Barchart: (LINK)

[iv] We have started posting a summary of Ben’s algorithm readings in Weekly Analysis.