Grain Markets and Other Stuff

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🌱 Soybeans: Harvest delays fueled a grain market rally, with Nov26 soybeans jumping 22¢ to $13.03. Corn gained 11¢ to $5.08, while wheat also finished higher. 🌧️ 
📉 Farmer Sentiment: Purdue’s Ag Economy Barometer fell to 123 as concerns over input costs and U.S. soybean competitiveness weighed on sentiment. A record 52% cited input costs as their top concern. 🇧🇷 
⛽ Fuel Costs: The Trump administration is considering suspending the 18.4¢/gal federal gas tax, but the move would require congressional approval and could cost billions in lost revenue. 🚗 
🇨🇳 China Demand: Trump said China will double its purchases of U.S. agricultural products, but it remains unclear whether the purchases would be in addition to existing commitments. China has fulfilled about 42% of its 2026 U.S. soybean commitment so far. 
🐄 Cattle: Additional U.S. beef imports have fallen well short of expectations, with an estimated 8%–22% of the September allocation entering the country. Strong consumer demand and a rally in equities helped send live cattle up nearly $4 to $5.30 and feeders up $6.65 to $9.58.

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🌽 U.S. Harvest Falling Behind: Corn harvest is 23% complete and soybeans 25%, both well below their five-year averages. Iowa and Nebraska are seeing the biggest delays, while winter wheat planting at 36% is also far behind average. 🌾 
🇧🇷 Brazil Election Boosts Markets: Flavio Bolsonaro narrowly edged Lula in the first round, setting up a runoff later this month. Brazilian stocks jumped more than 8%, while the real posted its strongest one-day gain in four years. 📈 
🌱 Brazil Soy Planting Lags: Soybean planting is 7.3% complete, slightly behind last year’s pace, while AgRural raised its production estimate to a record 182.7 MMT. 🇧🇷 
🛢️ Middle East Oil Exports Rebound: Gulf oil exports returned to pre-war levels in September despite ongoing tanker attacks, though security risks could make the recovery difficult to sustain. 
🚜 Red-Dyed Diesel Expanded: President Trump temporarily expanded access to tax-exempt off-road diesel for highway use through the end of 2026. Diesel prices remain elevated at $6.32/gallon, up 71% from a year ago. ⛽ 
🚢 Soybean Exports Stay Strong: U.S. soybean inspections totaled 1.1 MMT, up 45% from last year, with China accounting for about 66% of the week's shipments. Corn shipments fell 49% y/y. 🌎 
📦 Flash Sales: USDA reported sales of 129,540 MT of corn to Mexico and 104,000 MT of soybeans to unknown destinations for 2026/27 delivery. 
🐄 Cargill Earnings Hit by Cattle Costs: Cargill’s Q1 net income fell to $927 million, pressured by record-high cattle costs and rising cocoa prices. Its oilseed business was a bright spot, posting record soybean and canola profits. 📉

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🌦️ Corn Belt Weather: Drier weather this week should help accelerate corn and soybean harvest after weeks of rain. However, concerns remain about yield and quality losses in parts of the western Corn Belt, including reports of soybeans and corn kernels sprouting. Below-normal precipitation could continue into mid-October. 
📉 Grain Markets: Soybeans fell about 6¢ Friday to $12.78, their lowest close since late August, while corn dropped roughly 5¢ to $4.98. Favorable weather, bearish USDA data and China’s exclusion of U.S. soybeans from tariff relief continue to weigh on prices. Wheat was mostly unchanged near six-week lows. 
⛽ Fuel Prices: The G7 agreed to release 100 million barrels of crude oil and diesel from emergency reserves over four months, with much of the diesel expected to reach markets within 20 days. U.S. officials are also considering measures to bring down record-high diesel prices. Gasoline averaged $4.37/gal Sunday, while diesel averaged $6.34/gal. 
📊 Fund Positioning: Money managers were net sellers of 23K corn, 19K soybean and 10K SRW wheat contracts last week. Despite the selling, funds remain heavily net long corn and soybeans, with positions near record levels. 
🌽 Export Demand: USDA reported a flash sale of 218,600 MT of U.S. corn to Mexico, providing a boost to export demand. 
👷 Jobs & Fed: U.S. employers added just 29,000 jobs in September, far below expectations, while wage growth slowed to its weakest pace since 2021. The softer labor market reduces pressure on the Fed to raise rates, with traders pricing in a 78% chance of no change and 22% chance of a quarter-point hike in October.

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🌧️ Weather: Heavy rain drenched Iowa and eastern Nebraska, with Omaha receiving nearly 5 inches and Lincoln more than 3 inches. ☀️ Dry weather is expected through the weekend and into next week, but flooding and saturated soils will continue delaying harvest.
🌵 Drought Monitor: Rain improved drought conditions across parts of the Upper Midwest and High Plains, while dryness worsened in Kentucky, southern Missouri, and southern Illinois. Oklahoma remains the hardest-hit state in the Southern Plains.
📊 Drought Impact: U.S. drought coverage stands at
🌽 Corn: 21%
🫘 Soybeans: 27%
🌾 Winter wheat: 57%
🌾 Spring wheat: 48%
🐄 Cattle: 57%
📉 Grain Markets: November soybeans fell 9¢ to $12.84/bu., their lowest close since late August, pressured by fund liquidation, export concerns, and expectations for a record-large crop. December corn edged 2¢ higher to around $5.02/bu., while wheat futures finished higher.
🚢 Export Sales: Soybean sales jumped 77% week over week to 1 MMT (38 million bushels), exceeding expectations, with China leading purchases. Corn sales fell 36% to 536,000 MT, while wheat sales rose 8% to 289,300 MT; both were near the lower end of expectations.
🇷🇺 Russian Grain Exports: Black Sea shipping disruptions continue limiting Russian grain exports. Alternative ports shipped just 1.3 MMT of grain and oilseeds from July through September, compared with roughly 12 MMT through major Black Sea ports. Higher transportation costs and infrastructure constraints are complicating efforts to reroute shipments, potentially adding pressure to global food prices.
🏦 Federal Reserve: Fed officials signaled that additional interest rate hikes may be needed to bring inflation back to 2%, although expectations for an October increase have eased. Persistent price pressures remain a concern despite softer-than-expected underlying inflation data for August.

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🌽 Corn futures tumbled Wednesday after USDA pegged September 1 stocks at 2.095 billion bushels, up 35% from a year ago and well above every trade guess. 📉 Dec26 corn plunged about 21 cents to $5.01, while soybean and wheat stocks both came in below expectations but still couldn't stop beans and wheat from slipping lower.

📊 USDA will now have to "solve" for that 2.095 billion bushel old crop corn carryout in the October 9th WASDE, after demand was overstated by roughly 232 million bushels. 🐄 Most of the cut will likely come from Feed and Residual Use, which could drop from 6.350 to as low as 6.118 billion bushels.

💵 Republicans are pushing to include roughly $11 billion in new direct farm aid in a proposed defense spending package. ⏳ Even if it passes, checks likely won't reach farmers until spring 2027, pushing total US farm payments this year to about $55 billion.

🌧️ More heavy rain is hitting eastern Iowa this morning, with another 1 to 3 inches possible and dozens of counties under flood warnings or flash flood watches. ☀️ Drier, sunnier weather is expected to return Friday and stick around into next week.

⛽ US ethanol production fell to a 34-week low at 1.007 million barrels per day, while stocks hit a 12-week low but remain a record for the week. 💰 Margins are still strong across the Corn Belt, ranging from breakeven to 40 cents per gallon positive.

🚢 Sovecon cut its Russian grain export forecast by nearly 10% to 44.7mmt, with wheat exports lowered 11% to 36.7mmt as Black Sea and Azov ports are expected to stay closed through year-end. 🇹🇷 Turkey is leading efforts to restore Black Sea grain trade, and Russia could quickly restart up to 80% of its terminal capacity if a ceasefire is reached.

🫘 USDA confirmed a flash sale of 105,000mt of soybeans to unknown destinations for 2026/2027 delivery. 📈 Accumulated soybean sales are now up 94% compared to the same point last year.