Grain Markets and Other Stuff

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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.

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📈 The 30-year Treasury yield just blew past 5.61%—its highest level since 2002! War-driven inflation fears, heavy government borrowing, and a hawkish Fed are all piling on, with markets pricing in roughly a 50% chance of another rate hike in October.

💬 Jim Iuorio breaks down the three forces pushing long-term rates higher—the AI boom pulling money out of bonds, fears that inflation is sticking around, and the massive cost of financing the war. He believes the Fed is hiking to bring long-end yields down, but so far it hasn't worked.

🌧️ Iowa is getting soaked with 2–4 inches of rain through Thursday, and 64 counties are under a flash flood watch! The heaviest totals are expected along and south of I-80, further delaying harvest and raising concerns about yield and quality losses.

📊 USDA's Quarterly Grain Stocks report drops today, with corn stocks expected at 1.92 billion bushels—up 24% from last year. Soybean stocks are seen nearly flat at 324 million bushels, while wheat stocks are projected to fall 12%.

🌱 Soybeans bounced back Tuesday as Nov26 futures gained nearly 10 cents to close near $12.98 on bargain buying after Monday's sell-off. Dec26 corn slipped a penny to $5.22 ahead of the USDA report, while wheat futures were mixed.

🇨🇳 China is cutting tariffs on US wheat, corn, and sorghum—but don't expect a buying spree just yet. High US prices and a sluggish Chinese economy are holding back demand, and soybean growers are frustrated that beans were left off the list entirely.

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🌱 Soybean futures plunged Monday, with Nov26 beans falling nearly 31 cents to close around $12.88/bu after US soybeans were left out of the US-China tariff reduction deal. 📉 Corn slipped ~5 cents to $5.23/bu on spillover weakness and a firmer dollar, while wheat also finished lower despite both grains getting tariff relief.

🇨🇳 The American Soybean Association voiced disappointment that soybeans remain under an extra 10% tariff, which limits access for private Chinese buyers and leaves purchases dominated by state-owned firms. 🤝 ASA still expects China to meet its 25mmt annual purchase commitment through 2028 and hopes two more Trump-Xi meetings bring further relief.

🌧️ Another significant storm system is set to soak the Corn Belt through Wednesday, with the heaviest rain expected in southern Minnesota, western Wisconsin, eastern Nebraska, and much of Iowa. ⚠️ Localized flooding is possible on already saturated fields, further delaying harvest.

🚜 US corn harvest reached 18% and soybeans 17% complete, both in line with the five-year average but short of the 20% analysts expected. 🐢 Iowa is lagging badly at just 5% corn and 3% soybeans harvested, while winter wheat planting sits at 27% vs. the 34% average.

🇧🇷 Brazil's soybean planting hit 3.4% complete, slightly ahead of last year's pace, while first-crop corn reached 34% planted. 🌦️ Wet weather in the forecast could slow fieldwork, with USDA projecting Brazil's crops at 186mmt soybeans and 139mmt corn.

🚢 Soybean export inspections topped expectations at 1.2mmt, up 50% week-over-week and a whopping 89% year-over-year, with China taking 70% of the volume. 📦 Corn inspections came in strong at 1.6mmt, while wheat shipments reached 310,635mt but were down 64% from last year.

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🤝 The US and China agreed to cut tariffs on $30 billion worth of nonsensitive goods, including US ag exports, and extended their trade truce until mid-January. 🌐 The two sides also launched an AI dialogue and agreed no country should impose tolls on international waterways, an apparent jab at Iran's grip on the Strait of Hormuz.

🇨🇳 China released a list of 1,619 US products exempt from additional country-specific tariffs, including wheat, corn, rice, sorghum, and meats. 🫘 Soybeans were left off the list and slipped overnight, even though China has been buying US beans aggressively.

🌽 Dec corn gained about a penny Friday to close near $5.28 after last week's selloff over the lack of detail on Chinese purchases. 📈 Nov soybeans rose 2 cents to $13.19, while wheat slipped on hopes for easing Black Sea shipping disruptions.

🌧️ Des Moines has received nearly 13 inches of rain this month, about 10 inches above normal, and needs just under 2 more to tie the 1914 September record. ☔ Another round of rain arrives Tuesday, but the 8-14 day outlook turns drier across Iowa.

💰 Western Corn Belt soybean processors are paying premiums of 60 to 85 cents for immediate delivery as rain delays harvest, with Cargill's Sioux City plant offering up to $1 over November futures. 🏭 It's a big opportunity for farmers with old-crop or early-harvested beans, as USDA projects a record 2.78 billion bushels crushed this year.

📊 Funds sold 10k corn contracts last week but still hold their third-largest net long on record at 404k. 🚀 They bought 24k soybean contracts, pushing their net long to a record 265k.

🛢️ Trump rejected a phased seven-day deal to reopen the Strait of Hormuz in exchange for lifting the US blockade of Iranian ports, and Iran says it won't soften its terms. ⚠️ Tensions are spreading as Iran-backed Houthis launch drones and a missile toward Saudi Arabia, with reports Trump could resume bombing after the midterms.

🐄 ICE operations in Kansas, Oklahoma, and Texas have caused labor shortages at feedyards and packing plants, delaying shipments of thousands of cattle. 🥩 Several southwest Kansas plants halted operations last week, which could tighten beef supplies and push already-high prices even higher.