Grain Markets and Other Stuff

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🌎 Brazil Weather: Brazil’s soybean areas remain in good shape, with slightly below-normal rain in the north and above-normal rain in the south. This morning’s forecast calls for adequate moisture nearly everywhere, though excessive rain could become a concern in southern states. 🌧️

📈 Markets: Soybeans extended gains on Wednesday, with Jan27 futures closing near $12.31 after the USDA’s bullish crop report. Dec26 corn slipped a penny to $4.48 on profit-taking and export concerns, while wheat finally caught a break on skepticism over Russia-Ukraine peace talks. 🌽🌾

🇨🇳 China Buys Wheat: China’s Cofco booked at least 120,000mt of French wheat, the largest shipment from France since 2024, plus an undisclosed amount of Argentine wheat. The purchases come as falling Chicago futures erase much of the Black Sea war-risk premium, though no US wheat sales have been confirmed. 🚢

🕊️ Russia-Ukraine Talks: Wednesday’s peace talks ended without a ceasefire or progress on reopening safe Black Sea shipping, though a large prisoner exchange is being discussed. With exports constrained, IKAR estimates about 20mmt of Russian grain will need to be stored in polyethylene grain bags. 🛑

🇮🇷 Iran Diplomacy: Vice President JD Vance is considering face-to-face talks with a senior Iranian security official, but no meeting date has been set. Tehran’s demands to lift the naval blockade, release frozen assets, and ease sanctions remain major hurdles, while Strait of Hormuz oil flows stay well below prewar levels. 🛢️

🪰 Screwworm Update: New World screwworm cases are climbing across the Southwest as cooler, humid weather favors the pest, with nearly 130 confirmed cases in Texas, New Mexico, and Arizona. The USDA says strict inspections make infected imports unlikely and plans to keep Mexican cattle ports open as long as safeguards hold. 🐄

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📊 USDA Report: The USDA cut its US corn yield to 179.6 bpa and production to 15.893 billion bushels, both below trade estimates. Soybean yield and production were raised to 53.3 bpa and 4.574 billion bushels but still fell short of expectations, and US ending stocks for both crops came in lower than anticipated.

🌽 Market Reaction: Jan27 soybeans surged nearly 40 cents to settle at $12.28, driven by the yield miss and a stronger export forecast. Dec26 corn gained about 10 cents to $4.49, and wheat followed higher on spillover support.

🕊️ Russia–Ukraine Talks: Russia and Ukraine resumed US-mediated peace talks in Abu Dhabi for the first time in nine months, focusing on humanitarian issues, prisoner swaps, and security guarantees. Zelenskyy named restoring Black Sea grain shipments as a key goal, but it wasn’t addressed on Tuesday, and talks continue today.

💵 Inflation & the Fed: October CPI rose 0.4%, beating the expected 0.3% for the third straight hotter-than-expected month, with gasoline and food prices both climbing. Fed Governor Waller called for a December rate hike, and markets now fully price in a quarter-point increase, with half-point odds near 14%.

🚢 Flash Sales: US exporters sold 312,700mt (12 million bushels) of corn to Mexico for 2026/27 delivery. Exporters also sold 150,000mt (6 million bushels) of soybeans to Mexico for the same marketing year.

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📊 USDA WASDE Report Today: The USDA releases its November Crop Production and WASDE report at 11:00am CST, with traders expecting lower corn yield and production estimates, though the crop would still be the second largest on record. Soybean production is expected to edge higher toward a record harvest, while global ending stocks for corn, soybeans, and wheat are all forecast to rise.

🔮 2027/28 Baseline Projections: USDA’s early long-term baseline shows farmers shifting acres away from corn (95.5M) and toward soybeans (87.5M) and wheat (44M) next season. Corn yield is pegged at 184 bpa, with ending stocks projected at 1.82B bushels for corn, 300M for soybeans, and 748M for wheat.

🚜 Harvest Progress: Corn harvest reached 81% complete, trailing both the five-year average of 86% and trade expectations, with notable delays in South Dakota, Nebraska, and Iowa. Soybean harvest hit 92%, slightly ahead of average, while winter wheat planting reached 89% with good-to-excellent ratings improving to 49%.

📉 Futures Recap: December corn fell to a four-month low near $4.39, as a still-massive crop outweighed expectations for a lower USDA yield estimate. January soybeans dropped nearly 6 cents to $11.88 on record crop expectations and strong Brazil planting, while wheat slid on ample global supplies and hopes for Russia-Ukraine peace progress.

🇧🇷 Brazil Planting Update: AgRural reports Brazil’s soybean crop is 64% planted, ahead of last year’s 61% pace, with fewer challenges than expected for an El Niño year. Concerns linger over dryness in central Brazil and excessive rain in the south, while first-crop corn planting reached 71%.

🚢 Export Inspections: Soybean inspections totaled 1.9mmt (70M bushels), down 25% week-over-week, but year-to-date shipments are running 58% ahead of last year with China taking about 67%. Corn shipments reached 905,267mt (36M bushels), while wheat disappointed again at 248,536mt, leaving year-to-date totals 36% behind last year.

🌽 Flash Sale to Mexico: USDA reported a flash sale of 110,000mt (4M bushels) of corn to Mexico for the 2026/27 marketing year. Despite the sale, accumulated corn sales remain down 34% from last year.

🐄 Beef Industry News: Tyson Foods is partnering with Allied Beef to restart a second shift at its Amarillo, TX plant by summer 2027, likely reflecting improving cattle supplies in the Southern Plains. Meanwhile, JBS missed Q3 earnings expectations with $1.18B in adjusted earnings, though it sees its US beef business recovering in 2027.

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🤖 USDA Turns to AI: USDA is rolling out a new AI tool in tomorrow’s November Crop Production report as an extra safeguard to catch errors, following September’s corn miscalculations. The move comes as confidence in USDA data has slipped amid reporting inconsistencies and staff cuts across the agency.

🇨🇳 China Extends Tariff Truce: Beijing will hold off on an additional 24% tariff on US goods for two more months while keeping its 10% blanket tariff in place, and port fees on US ships are delayed until January 10. Trump and Xi are set to meet later this month at the APEC summit in Shenzhen, with ag purchases and rare earths high on the agenda.

📊 WASDE Preview: USDA releases its Crop Production and WASDE report Tuesday at 11:00am CST, with traders expecting lower corn yield and production but still the second-largest crop on record. Soybeans are expected to edge higher toward a record harvest, while global corn, soybean, and wheat stocks are all forecast to rise.

⛽ Harvest Fuel Relief Program: USDA’s $8 billion Harvest Fuel Relief Program has an October 16 acreage reporting cutoff, which passed three days before the program was even announced. Paul Neiffer recommends reviewing your FSA-578 reports and checking with your county FSA office, especially if you picked up land late or operate a new entity.

💰 Fund Positioning: Large money managers sold 72k corn, 51k soybean, and 13k SRW wheat contracts for the week ending November 3. The funds’ corn net long is now the smallest since early July, while their SRW wheat net short is the largest since late January.

📈 Friday’s Markets: Soybeans bounced about 6 cents to near $11.94 on short covering after a week of steep losses, and Dec26 corn added roughly 2 cents to near $4.42. Wheat kept sliding to its lowest level since February as Russia-Ukraine peace talks raise hopes for improved Black Sea shipments.

🚢 Flash Sales: USDA reported a sale of 101,000mt (4 million bushels) of corn to unknown destinations for 2026/27 delivery. Exporters also sold 136,000mt (5 million bushels) of soybeans to China for the 2026/27 marketing year.

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🇨🇳🌾 Chinese buyers signed $600 million in US sorghum and wheat purchase agreements with Illinois-based Hang Tung Resources at the China International Import Expo in Shanghai. The deals come as China lags far behind its $17 billion annual commitment for US farm goods beyond soybeans, buying just $7.2 billion through September.

📉💻 The stock market plunged Thursday as a massive tech and AI selloff pushed the Nasdaq down 5.5% and into correction territory, while the S&P 500 fell 4.4% and the Dow dropped 3.4%. Investors worried that Democrats’ sweeping midterm victories could bring tighter AI regulations, erasing Wednesday’s strong postelection rally.

🏦📈 Treasuries rallied as investors fled to safe-haven assets, sending yields down as much as 12 basis points to their lowest levels since early September. Traders are now scaling back expectations for more Fed rate hikes, with some positioning for no change in December.

🫘🌽 Soybean futures extended their losing streak to nine straight sessions, with the Jan27 contract falling 14 cents to $11.88 on expectations of a record-large US crop. Corn also slipped on big-crop expectations, while wheat edged higher on technical buying despite Russia-Ukraine peace deal optimism.

🚢📦 US soybean export sales fell 44% week over week to 1.5 MMT, though China was the top buyer, and accumulated sales are up an impressive 76% from last year. Corn sales held steady at 1.3 MMT, with Mexico leading, while wheat sales dropped 37% to 538,000 MT, with the Philippines as the top buyer.

☀️🏜️ USDA’s latest drought monitor showed worsening conditions in northern Indiana, southern Illinois, and Missouri, while Minnesota and the High Plains saw improvement. About 31% of the Corn Belt is in drought, down from 35% a year ago, and the dry weather has been ideal for harvest.