A Brutal September Gives Way to the October Test

An ugly end to an ugly week saw prices for the summer row crops continue their recent slide while wheat was little changed. Once the US/China trade meeting results ended the mid-September rally, the gut punch of the bearish USDA quarterly corn stocks report last Wednesday ended the bulls hopes for a quick recovery. With a sizable 173 MBU (2 BPA of yield loss or $800 million in Chinese purchases) cushion now priced into the markets and corn below $5, beans below $13, and wheat below $7, the pre-harvest optimism and profitability has been severely hurt. Next week will be about harvested yield reports and private yield estimates for the Friday October USDA yield report.

News and Notes:

• The WCB will be dry for a few days with limited field work starting this weekend with a faster pace by mid-week. Unfortunately, rain is forecast to return late next weekend to again stall harvest. US harvest progress is on a normal pace but the deterioration of the WCB crop quality while they sit in saturated soil is expected to be an issue once enough harvested data is collected. S Brazil and N Argentina remain historically wet as planting stalls on their flooded fields.
• The corn, bean and wheat charts look terrible after substantial fund liquidation after the USDA’s big corn number. The corn and bean charts have some room between Friday’s closes and the next level of technical support, while wheat is sitting right on the 100-DMA (blue line) after finding support in Friday’s trade. The funds remain sizably long in corn and beans, with a more neutral/short position in wheat. The markets are oversold, so trade into the October USDA report should lean friendly. The diesel chart shows the steady 49-cent three-week decline. Continue to top off tanks on pullbacks.
• Please take a few minutes to listen to the latest podcast we did for Helena’s FieldLink where their Agri Intelligence program is discussed and a pre-USDA report market overview.
• There remains only talk and no meaningful action regarding ending either war to reopen the Straits or the Black Sea. EU released diesel from their reserves last week, but it is a drop in the bucket to what is not being refined by Russia due to blown up refineries. Crude oil continues to trade around $90 a barrel as crude is getting out of he OPEC states in alternate ways while diesel was stopped several time on attempts to break through $5 a gallon futures. The wheat logistics got a little more strained last week as several countries bordering Russia voted not to allow Russian wheat to be transported through their countries. The wheat market has little premium for the reduced world available supply.
• The two-week collapse in prices for corn and beans could not have been timed any worse as the fall insurance revenue price will be set this month. For the first two days of trade the corn average is $5.00, and the bean average is $12.81 1/4. They are still better than the February price averages, but not as attractive as the price levels just a few weeks ago.
• Weekly Changes: Corn – 20 1/2 (Dec ‘26), - 11 ½ (Dec ’27), Beans – 40 3/4 (Nov ‘26), - 23 ½ (Nov ’27) Wheat – 20 1/4 (Dec ’26), - 20 ¾ (July ’27), Crude - 130, Diesel + 390, Dow - 686, US Dollar  + 1009, Cattle - 3, Feeder Cattle – 30 , Hogs  - 45, Cotton - 383, Milk - 22 (14.94).

It has been a brutal 2-weeks of trade since the overheated optimism before the US/China trade summit pushed markets to new yearly and contract highs before the disappointment of no massive new ag purchase program was revealed. The break has dented everyone’s enthusiasm, but the USDA decided to pile onto everyone’s developing price problem with a hotly debated addition of 173 MBU of corn in last Wednesday’s Quarterly corn stocks column. The losses are a painful reminder that as soon as something seems obvious, the obvious is usually the wrong conclusion. With the October USDA yield update coming out on Friday the 9th, next week is unlikely to trade very eventfully until Friday as China is on a weeklong festival break and little export news from them is expected. At such discounted prices from a month ago, China will be buyers of the break but will probably be doing more futures purchases which only show up on the Friday commitment of traders report rather than cash purchases which show up on the daily sales updates. Have a great weekend.