Despite a volatile week in the corn markets, they managed to continue their sideways pattern. An early week selloff was followed by a mid-week reversal allowed corn to gain back most of its losses. Following a bearish USDA Stocks report on Tuesday the markets rallied Wednesday on news from President Trump that he was going to help the US producer by rerouting tariff revenues to them and that he would be meeting with Chinese President Xi Jinping in 4 weeks. This is much earlier than expected and looks to be supportive the soybean markets. Strength in the soybean markets spilled over into the corn markets, pulling both higher late in the week. December, March and May futures all ended the week 3 cents lower after trading as much as 13 lower early in the week. The funds ended the week short 98,323 corn and long 2,258 soybean contracts.

On Tuesday the USDA released their September 1^st grain stocks report. Corn and wheat stocks came in well above pre-port estimates, giving the markets a bearish tone. The biggest take-away from the report was the 182-million-bushel shortfall in feed residual use which adds to the current 2025-26 carry-out estimates.

USDA September 1 Stocks (billion bushel)

On Wednesday the government shut down which will have an impact on future government reports.

With the Congress continuing to negotiate votes to continue funding the government, trade is operating on innuendo and intuition. Missing some of these reports will not have a big impact, but there are some that could surprise us when they are resumed. US corn export offers remain the most competitive, so it is assumed that sales will continue the merits of economics. No sales will be announced during the closure, and the only export indications we will have will be on Monday for grain already sold earlier in the season and in the process of loading on ships. The US harvest should be proceeding as normal to above normal, but again crop progress won’t be known specifically, as that too is a report published by the USDA.  With three days of shutdown accomplished, the odds of a quick turnaround and a WASDE/Production report being released on October 9th are very low.

Argentina’s corn crop is up to 20% planted, compared to an average of 16%. Modest rains are expected to be over 70% of the country, with the better accumulations in the eastern half. Both Argentina and Brazil are projected to increase acres and production this year.

Corn harvest was reported at 18% complete this past year, which is right in line with the 5-year average but slightly behind last year.

Upcoming reports

As harvest ramps up with favorable weather and export demand for soybeans remains absent, the markets continue to remain rangebound while looking for bullish support. December and March corn ended the week 2 cents lower while May futures closed 3 lower. The funds ended the week short 108,323 corn and 35,742 soybean contracts.

US weather forecasts remain very good, which should aid harvest progress. Traders are expecting NASS to show strong numbers in Monday afternoons harvest progress report. Reports out of the field continue to vary with no direction other than yields don’t appear to be as good as we expected in August. A dry August coupled with disease pressure appears to have taken the top off of the crop. I am sticking to my 184 bushel per acre estimate but may adjust as I see more data in the coming weeks.

On Tuesday the USDA will release their September 1^st grain stocks report. Estimates are shown below. I do not expect the market to react much to this report as the focus remains on current harvest conditions.

USDA September 1 Stocks (billion bushel)

Late last week, US Secretary of Agriculture Brooke Rollins spoke on the current state for the farm economy in the US. In her speech she acknowledged that the tariffs have negatively impacted producers and that this administration is going to support American Ag. On Thursday President Trump backed this up by saying “We’re going to take some of that tariff money and give it to our farmers.” US farm production imputs are significantly higher than they were four years ago and commodity prices are much lower, putting pressure on farmers’ bottom lines. Between 2020 and 2025, seed expenses increased 18%, fuel and oil increased 32%, fertilizer increased 37% and interest expenses increased 73%.

Corn harvest was reported at 11% complete this past year, which is right in line with the 5-year average but slightly behind last year.

Upcoming reports

The grain markets may have found support but have struggled to find strength as harvest progresses along and politics give us no news. December, March and May futures all closed 6 cents lower on the week. December futures failed to fill the July gap at 4.3275 last week but remained close. The funds ended the week short 105,497 corn contracts and short 20,812 soybean contracts.

President Trump and Chinese leader Xi Jinping talked on Friday, and reports are that the call was cordial but there were no deals finalized.  President Trump said he would meet Xi Jinping at a regional summit meeting taking place at the end of October in South Korea and will visit China in the early part of next year.

Harvest continues to push northward fast, and early yield reports are starting to flow from the Midwest. Early yields are mixed, but the consensus is smaller than what the USDA is currently projecting. The market is currently under pressure from all aspects, shrinking yield, slow exports, South American production and a lack of trade deals.

The current weather pattern and longer-term forecasts favor a speedy harvest that could put some pressure on storage facilities due to the size of this year’s crop and lack of exports. I expect basis levels to weaken during harvest before stabilizing and becoming stronger after the crop is put away.

Corn harvest was reported at 7% complete this past year, which is right in line with the 5-year average and slightly behind last year.

Upcoming reports

The markets ended on a strong note last week, closing 10 higher in Friday’s trade despite a neutral USDA report. December corn ended the week 12 cents higher while March and May futures ended the week 11 and 10 cents higher respectively. The funds reduced their corn short position ending the week short 76,593 contracts. They are currently short 7,382 soybean contracts.

Friday’s report was neutral for corn as the domestic balance sheet calls for larger supplies, larger exports and slightly smaller ending stocks. Corn yield was lowered to 186.7 bushels per acre versus the 188.8 we saw in August. Harvested acreage increased from 88.6 million acres in August to 90.0 in September.

Total production was higher as a 2.1-bushel reduction in yield was more than offset by a 1.3 million acre increase in harvested area.  Exports were raised by 100 million bushels to 2.975 billion, which offset all the increased production. Ending stocks were reduced slightly to 2.110 billion bushels. Global corn production was lowered slightly, primarily on decreases in the EU and Russia. Global corn ending stocks were lowered to 281.4 million metric tons. This was slightly below analysts’ average pre-report estimate of 282.8 million metric tons but within the range of estimates (279.7 to 287.6 million range).

USDA 2025 US Yield (Bushels per Acre)

USDA 2025 US Harvested Acreage (Million Acres)

USDA 2024/25 US Carryout (Billion Bushels)

USDA 2025/26 US Carryout (Billion Bushels)

While the report was neutral to bearish, the market seems to be excited about TS Bessent’s upcoming meeting with China’s Vice Premier this week in Madrid. The market had similar reactions on 7/2, 7/18, and 8/11 to upcoming meetings. It is worth noting, two of these rallies were followed by swift selloffs when deals did not materialize.

I feel it is important to keep in mind that Fridays yield report is based on early harvest and limited physical sampling. A lot of the test weights that are used in the sampling are presuming good ear fill down the stretch. With the dryer weather we have had over the last month, I would anticipate test weights to come in lighter than those used in the sampling assumptions. I look for a further reduction in yield due to test weights and am sticking to my estimate of 184.0 bushel per acre when we get the final report in January.

With Friday’s rally, we closed only .0275 cents off of the gap in CZ25 that I mentioned last week as the next target. Mondays open and close will be a good indicator if this recent strength holds through harvest.

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Trade was quiet last week as traders returned from the Labor Day weekend. December corn ended the week 2 cents lower while March and May futures lost 1 cent. The funds ended the week short 93,197 corn and long 6,416 soybean contracts.

While the markets were quite last week, there were a few noteworthy items that could impact the markets long term.

The first came when The White House announced that President Trump had signed an Executive Order to officially implement the new U.S.–Japan trade agreement. As part of the deal, Japan is moving to expedite a 75% increase in U.S. rice purchases, while the U.S. will apply a baseline 15% tariff on nearly all Japanese imports. In addition, the two countries issued a memorandum of understanding outlining $550 billion in planned Japanese investments in the U.S., to be carried out through January 19, 2029, underscoring both the trade and investment dimensions of the accord. While the rice deal may not directly impact corn, it sets the stage for additional commodities to be purchased. Japan was the second largest importer of US corn with 532 million bushels purchased of the 2024/25 crop.

Private analysts StoneX and Allendale released their farmer survey results for this year’s crop. StoneX estimated the national corn yield at 186.9 bushels per acre compared to the USDA’s 188.8 that was released in August. Allendale estimated the corn yield at 187.5 bushels per acre, which was also below the USDA’s estimate. Dry weather in August and the prevalence of disease (southern rust) hitting corn fields are the reasons we may be looking at a smaller crop than the USDA estimated. Southern Rust has been showing up in many areas of the northern corn belt over the last several weeks. This disease thrives in warm, wet conditions and is spread by the wind blowing spores. Rust prematurely kills the plant leading to diminished grain fill and stock rot that can cause the plant to fall. It is too early to determine the impact this disease may have on the final yield, but losses are expected.

With the flip of the calendar to September we will begin to get yield reports from some of the major corn growing states. I am aware of combines rolling in IA, IL and IN and look for reports to start rolling out next week.

We didn’t lose much ground last week, and I still look at $4.3275 for the CZ25 (December futures) as the next target. The lows are historically set in late August and the first week of September so we will know real soon if this trend continues.

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