China Takes Center Stage as Grain Markets Reset

The bulls took Friday off as the markets worked lower with wheat lower on rumors of Ukraine/Russian talks to reopen the Black Sea shipping corridor while beans and corn were lower on profit taking a general lack of bullish news heading into next Thursday’s China/US trade summit in Washington. Wet Corn Belt weather continues to plaque early harvest, but a break from the brutal summer long heat is on the horizon for the southern tier of the US. Weekend meetings between Sec Bessent and his Chinese counterparts will yield some insight into next week’s agenda which hopefully includes more corn and soy sales.

News and Notes:

• The super El Nino pattern is already causing concerns for the Southern Hemisphere as Brazil is starting their planting season much drier than normal. The opposite problem is being seen across the US central Corn Belt as heavy rains continued through the weekend with more expected early next week from E NE to the Great Lake states.
• The charts had held up well until Friday’s trade when the support of the 20-DMA was breached in corn while beans fell to the closet test of its 20-DMA since the breakout in mid-August. The psychological support of $13 in November beans is just under Friday’s close while wheat continued its recent struggles moving lower to a potential test of the 50-DMA and the $7 level. The overbought conditions seen in early September have largely been solved but the funds remain heavily long corn and beans. The last chart is the October diesel chart and last week’s new round of all-time highs took a small break to end the week, but the diesel market will be harder to solve than the oil market, as Russia and the rest of the world simply do not have excess refining capacity if Ukraine continues to knock out Russian refineries. Top off your tanks on every 15-20 cent break.
• Please take a few minutes to listen to the latest podcast we did for Helena’s FieldLink where the latest in agriculture government affairs are discussed and my general overview of the recent USDA report and the road ahead.
• The most bullish pre-trade meeting news would be Sec Bessent announcing that both China and the US are dropping the existing 10% tariffs on multiple key products.
• China was announced as a buyer of another 2 cargoes of beans on Friday morning showing China continues to make good will purchases ahead of Sec Bessent’s weekend agenda setting meeting with his Chinese counterpart. It is unclear when any announcements on new trade deals or agreements on AI could be announced, but the meetings will kick off with an official State dinner for all participants on Thursday night. Any announcement on new corn sales would spark a run to new contract highs.
• Weekly Changes: Corn – 2 3/4 (Dec ‘26), + 7 (Nov ‘26), Wheat - 11 (Dec ’26), Crude + 406, Diesel + 2895, Dow - 1241, US Dollar  + 787, Cattle - 375, Feeder Cattle – 900 , Hogs  - 343, Cotton - 491, Milk - 45 (15.69).

It is hard to tell if current prices are accounting for what could come out of Thursday’s trade meetings, but we do know that the USDA did not include any additional purchases in the September update. If a larger trade deal is reached, the tightness of the stocks becomes even more acute. As harvest accelerates and more yield numbers become available, a more accurate yield estimate for both crops will come into focus but the poor end to the growing season and this week’s flooding rains, the market is expecting the October USDA update to further trim the corn yield. Opening calls are slightly higher after last week’s consolidation and optimism ahead of the trade meeting. Have a great Sunday.