USDA Report Looms as Markets Hold Their Ground

Early gains in corn and beans eroded through the day for mixed closes as weekend and pre-report positioning controlled the trade volume. Wheat finished higher on more Black Sea closures but finished mid-range after strong double-digit gains in the morning. Wednesday’s major USDA report will dominate early week conversation as concerns over higher yields and more planted acreage, especially in corn, could be the straw that breaks the camel’s back after the recent better weather induced break. The lack Black Sea ship movement and the refusal of Iran to re-open serious negotiations or the Strait will add other cross-currents around the report release.

News and Notes:

• US weather remains non-threatening through mid-month for most of the central and eastern Corn Belt while the Dakotas and WCB remain dry with heat returning in the 10-14-day. The USDA is going to have to address the record losses because of the European drought as the ripple effect of their much larger import needs will change the world balance sheets.
• The grain and soy daily charts on Page 2 all have a similar look as this week’s flat trade kept prices within areas of moving average congestion, without really threatening to break out or breakdown. The funds continue to hold a very large, long position in beans, a modest long in corn and a very small short in wheat. A bearish reaction to Wednesday’s USDA report will turn the charts bearish, but with such strong demand, any sharp break should find end user buying.
• All major Russian and Ukraine ports remain closed after the recent escalation of attacks on key shipping points. Ship insurance is unavailable to complicate matters. Although Sec Bessent and Pres Trump announced on Wednesday a deal to reopen the Straits would happen soon, the weekend developments show that it has not. Another missile attack hit a ship late Friday and Iran said that no deal would be made unless all conditions are met. The conditions remain the same and have been non-starters and it is unlikely the US will give in on any conditions, especially allowing Iran to build nuclear weapons. Crude oil should trade higher on Sunday’s opening.
• China was again announced as a buyer of beans in Friday’s daily sales report as well as Mexico making equal 11 MBU purchases for this year and for next year. Despite some other tariff related moves against China by the US, the September 24th visit by Chairman Xi is still on. The USDA has not addressed the new 25 MMT bean purchase pledge, so it will be interesting in Wednesday’s report if they begin to increase export sales totals.
• Weekly Changes: Corn – 1 3/4 (Sep ‘26), - 2 (Dec ‘26), Beans  - 11 3/4 (Sep ‘26), - 11 1/4 (Nov ‘26), Wheat + 1/2 (Sep ’26), Crude - 649, Diesel - 1931, Dow + 1517, US Dollar  - 366, Cattle  - 5, Feeder Cattle + 362, Hogs  - 335 , Cotton + 261, Milk - 31 (16.78).

The better US weather and understandable steep losses in corn and beans over the last 2-weeks have set up a concerning landscape heading into Wednesday’s USDA report. Every year there is always concern going into the August report because the USDA has a history of finding more planted acres than in the June planted acreage report and are slow to make major adjustments to yield with another 5-6-weeks of key growing weather for corn and beans. There have been some very bearish private corn yield estimates as the eastern half of Iowa, southern Minnesota and most of the ECB are seeing big yield potential, despite national crop ratings that are well below last year. With the Straits remaining closed, Black Sea shipping halted, and strong industrial and export demand, there are underlying bullish factors that should positively affect prices if the USDA does not make any major changes to planted acres and yields in the Wednesday report. Have a great Sunday.