Grain Markets and Other Stuff

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📈 Inflation heated up in September, with CPI rising 0.6% month over month and annual inflation hitting 3.7%, topping expectations of 3.6% as gasoline surged 9.1% and fuel oil soared 74% y/y. Ground beef was a rare bright spot, falling 1.3% to $7.06/lb, though markets still see only a 29% chance of a Fed hike on October 28th.

🇨🇳 China’s soybean crushing capacity has grown nearly 20% over the past decade, but operating rates stuck between 55% and 70% are squeezing profits as daily capacity heads past 520,000mt. With an aging population, shifting protein habits, and low-protein feed gaining ground, China’s soymeal demand may be peaking, raising questions about future US soybean purchases.

🚢 USDA confirmed a flash sale Wednesday of 470,000mt (17 million bushels) of soybeans to China for 2026/2027 delivery. It’s the first US soybean flash sale to China since the September 24 Trump-Xi meeting in Washington.

🌧️ Rain is returning to the Corn Belt after a mostly dry week, with radar active this morning across parts of the western Corn Belt and Plains. Totals look light, though, with few areas topping 1.5" over the next 5 days, while TX, OK, and southern MO see the heaviest amounts.

🫘 Soybeans fell for a third straight session Wednesday, with Nov26 down nearly 7 cents to around $12.77 on mostly favorable weather forecasts. Dec26 corn slipped 2 cents to about $4.81, while wheat posted modest gains on Black Sea shipping concerns.

⚡ Russia accused Ukraine of drone strikes on two western Russian refineries with roughly 540,000 barrels per day of capacity, which Ukraine denied, citing Trump’s proposed energy truce. Meanwhile, Russian strikes reportedly knocked out power and water in Kyiv, and US diesel sits near record highs at $6.30/gal, up 72% y/y.

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🇨🇳 China Corn Imports: Despite recent tariff relief, US corn is still priced out of China, with imports projected to fall to 3.5mmt and the US supplying just 900,000mt vs. 1.2mmt each from Brazil and Argentina. 📉 Negative import margins and a 5–8mmt jump in China’s domestic production limit upside, though Reuters reports China bought 8–10 cargoes of US soybeans, the first since the Sept 24th Trump/Xi meeting. 🫘

🚜 Harvest Progress: Corn harvest reached 33% and soybeans 46%, both behind the five-year average and marking the slowest weekly pace since 2019. 🌧️ Iowa and Nebraska are furthest behind, while winter wheat planting hit 51% in its slowest week on record. 🌾

🇧🇷 Sorghum Competition: Brazil has more than doubled sorghum output to ~6mmt and shipped its first-ever cargo to China in August, with up to 2.4mmt expected to ship by the end of October. ⚠️ Meanwhile, US sorghum production is forecast to drop 33%, and exports to China have plunged from over $2 billion a decade ago to just $86 million in 2025. 📦

📊 Futures Recap: Dec26 corn held steady near $4.83/bu while Nov26 soybeans slipped 4¢ to ~$12.84/bu, both pressured by advancing harvest. 🌾 Wheat closed lower on technical selling and spillover weakness, with traders shrugging off new Black Sea vessel attacks. ⚓

🚢 Export Inspections: Soybean inspections fell short of expectations at 1.1mmt, though still 27% ahead of last year, with China taking about 59% of the week’s total. 🌽 Corn came in strong at 1.3mmt (+5.3% YTD), while wheat lagged at 304,660mt, down 35% from last year. 📉

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🌊 Super El Niño Watch: US forecasters put the odds at 83% that the developing El Niño ranks among the strongest on record, raising concerns about heat, drought, and excess rain in major growing regions. In Brazil, dryness in the Center-West and north could delay soybean planting and hurt the second-crop corn that follows.

🇷🇺 Russian Grain Cuts: IKAR lowered Russia’s total grain crop to 137mmt and wheat to 88mmt, while trimming wheat exports to 42mmt from 43.5mmt. Most shipments are being rerouted to Baltic terminals, since Black Sea and Azov ports remain closed due to the war.

📈 Markets Recap: Dec26 corn gained about 3 cents to $4.83 on short-covering, while Nov26 soybeans slipped about 4 cents to $12.88 on expectations of a record US crop. Chicago wheat edged higher and KC wheat ticked lower as traders watched Black Sea shipping disruptions.

🇨🇳 China Soybean Outlook: China’s Ag Ministry cut its soybean production estimate 2.8% to 20.36mmt and slashed stocks 25% to 1.75mmt. China is projected to import 115mmt this year, yet USDA hasn’t reported a flash sale to China since September 24th.

⚡ Energy Ceasefire Doubts: President Trump announced a Russia-Ukraine energy ceasefire, but Zelenskyy said he learned of it through the media, and Russia struck an energy facility Monday. WTI crude is trading near $92/bbl, and national diesel averages $6.28, down from the record $6.53 set September 21st.

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🌽 USDA shocked the trade Friday, raising the 2026 US corn yield to 181.2bpa, up from 178.5bpa last month and well above the 177.7bpa trade guess. 📊 Combined with higher beginning stocks, total corn supply jumped a whopping 407mil bushels, only partially offset by a 125mil bushel bump in demand.

📉 Corn futures fell sharply Friday after the “super bearish” USDA report, with Dec26 dropping more than 20 cents to its lowest close since mid-August. 🫘 Nov26 soybeans bucked the trend to gain more than 4 cents, while Dec26 SRW wheat lost more than 12 cents.

💰 The funds were net sellers of 51k corn and 7k SRW wheat contracts during the week ending October 5th, while buying 12k contracts of soybeans. 🔻 Private estimates show they sold another 63k corn, 17k soybean, and 8k SRW wheat contracts on Friday following the USDA report.

☀️ The Corn Belt stayed mostly dry over the weekend, likely allowing harvest to continue or accelerate across the region. 🌀 Rains from Hurricane Isaias soaked the Gulf Coast and mid-south, with Corn Belt rains returning midweek ahead of today’s 3pm CST Crop Progress report.

🇧🇷 Brazilian soybean planting is moving at a record pace, reaching 19.77% complete vs. 12.86% last year and 11.55% on average, per Patria AgroNegocios. 🌧️ Early, satisfactory rains are aiding progress as USDA projects a record 186mmt crop on a record 123.5mil acres.

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💰 USDA pegs inflation-adjusted US farm debt at a record $605+ billion, roughly double the 2000 level. 🔍 But officials warn the true number may be even higher, with one economist estimating vendor and nontraditional financing could be 2–3x larger than USDA’s $45 billion figure.

🌽 Grain futures were choppy Thursday, with Dec corn settling near $5.00 and Nov soybeans dropping 10 cents to around $12.87. 📊 Traders are squaring up ahead of today’s Crop Production and WASDE report while keeping an eye on harvest yields.

📋 USDA releases its October WASDE at 11am CST, and the trade expects corn yield and production to be trimmed. 🤔 There’s a 9-bushel gap between the highest and lowest corn yield guesses, while soybean yield is expected to hold steady.

🛢️ Trump said the US will not attack Iran before the November 3 midterms, a day after strike talk sent Brent crude up more than 4% to above $104. ⛽ Gas is averaging $4.36 a gallon, up about 40% from a year ago, as public support for the war slips to just 31%.

🌧️ Heavy rain of 3 to 6+ inches brought major drought relief to the central and southern Plains, while the core Corn Belt remains drought-free. ☀️ Dry, warm weather through October 12 should fuel a strong harvest push before wetter conditions return.

🚢 Corn export sales jumped to 769,500mt, up 44% week over week, with Mexico and Colombia leading the way. 🌾 Wheat sales were also strong at 451,600mt, while soybean sales slowed 47% despite China buying 382,900mt.