The markets reversed direction following the bearish WASDE report last week. December, March and May futures all ended the week 30 cents lower on the week. The funds ended reduced their long position by 128,000 contracts and are now long 299,220 corn contracts while they remain long 232,558 soybean contracts.

The markets saw massive selling following the stocks report on Wednesday as the USDA confirmed it had been overestimating the 2025/26 feed demand. The average estimate for the September 1 stocks number was 1.918 million bushels. What the USDA delivered was 2.095-million-bushel carryout which came about through a combination of a slightly lower production number and ultimately a smaller feed demand number.

The 2.095 carryout offer a supply buffer to the 2026/27 supply and demand table. This adjustment is equivalent to adding almost 2 bushels per acre to the 2026 crop. Instead of a 178.5 yield that the USDA gave us back in August, technically just became greater than 180.

On Friday October 9^th the USDA will release its October crop production report. While not a lot of changes are expected, one that could surface is an adjustment to expected yield. Early reports from the southern states have reported yields below last year and in some cases by as much as 20 or more bushels. Will we see an adjustment lower or will the USDA surprise the majority with a higher yield. The only estimate available at the time of this writing was from well-known Stone X, whose estimates for this year’s crop come at 182.1 bushel per acre.

Harvest progress slowed last week and came in at 18% complete which is right in line with the five-year average. With excessive rains across the Midwest this past week, this afternoon’s report should show progress falling behind the average.

Historically the markets trend lower heading into October before slowly grinding higher into the end of the year. We filled the $5.09 CZ26 gap this past week and closed below multiple support levels to end the week. Look for the markets to stabilize heading into Friday’s report. Any significant adjustments on Friday could carry through until the November 10^th crop production report.

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Corn traded in a 20-cent range last week but ultimately settled unchanged to a penny higher in most contract months. Weather across the Midwest, China and US meetings along with rumors of peace in Iran kept traders’ attention during the week. The funds ended the week long 428,097 corn and long 277,159 soybean contracts.

President Trump and Chinese President Xi’s meeting had traders’ attention late last week. Following the conclusion of the meeting, there was no immediate mention of the 17-billion-dollar Ag purchase and no discussion of the 25 million metric ton soybean deal which sent the markets lower Thursday evening into Friday mornings trade. Fridays mid – morning comments from President Trump that the meeting was “very productive” and the US farmer would be “very happy” with the agreement caused the markets to rebound and trade back to unchanged to slightly higher to end the day. US Trade Representative Jamieson Greer stated Friday morning that the US and China have reached agreements on a subset of goods they can trade and that details of the agreement were going to be released on Monday September 28^th.

Late last week Iran offered to reopen the Strait of Hormuz and resume talks on its nuclear program within seven days if the United States lifts its naval blockade of Iranian ports, waives sanctions on Iranian oil sales and observes a ceasefire that would include Lebanon. These comments pushed crude oil $4-5/barrel lower to end the week. On Saturday President Trump said that he had rejected the Iranian proposal to reopen the Straight stating that they wanted to make a deal where they open the straight immediately because they’re losing so badly.

On Wednesday September 30^th the USDA will release its quarterly stocks report.  Estimates for the report are listed below.

USDA September 1^st Stocks (Billion Bushels)

Harvest progress remained slightly ahead of the five-year average at 13% complete last week. Yields continue to be reported in a wide range, but most of them are 10-20 bushels off last year’s results.

Historically the markets trend lower heading into October before slowly grinding higher into the end of the year. With the geopolitical influences and events, we have taking place today, I expect a lot more volatility and would look to capture both high and low that the market offers. Demand has been strong, but high prices have made the US less competitive over the last 30 days, and it is showing in export sales which is the first place it shows up.

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Corn struggled to maintain positive trade last week as traders monitor harvest reports and position ahead of the upcoming Trump/Xi summit. December corn ended the week 3 cents lower while March and May ended the week 4 and 5 cents lower respectively. The funds closed the week long 393,460 corn and 229,001 soybean contracts.

Early yield reports coming out of the Midwest are variable, which isn’t creating confidence in a bigger crop. Historically early yield reports often come from the lower-yielding ground due to any number of issues that may have brought the crop to early maturity. Harvest has slowed in the western corn belt due to heavy rains. The Midwest will see active rains over the next several days but nothing that will affect the yield at this stage.

President Trump and Chinese President Xi Jinping’s expected Sept. 24 summit in Washington is shaping up around reciprocal tariff reductions and an extension of the trade truce. China’s Commerce Ministry has confirmed negotiations on tariff relief covering $30 billion of goods from each country. For U.S. agriculture, the implications extend beyond another purchase announcement as lower Chinese duties could make American commodities more competitive with Brazilian supplies and create a pathway for Chinese commercial firms to re-enter the U.S. ag market.

Harvest progress remained slightly ahead of the five-year average at 8% completed last week. Expect things to be slower in the next two weeks as rain hampered progress across most of the mid-west.

While early yield reports are coming in all over the place, most of them are below last year’s records. This could add support to the markets long term if demand remains strong. Harvest pressure should keep things in check over the next 30-45 days. As I stated last week, there is a gap in the charts at $5.09 in the December contract that remains intact. I don’t know how quickly it will happen, but I do expect to fill the gap before coming back to current or higher levels.

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Corn closed lower for the first time in five weeks following a USDA report that was in line with expectations.

December and March corn ended the week 6 cents lower while May closed 7 cents lower on the week. The funds ended the week long 412,459 corn contracts and long 245,258 soybean contracts.

The September WASDE report released on Friday was in line with trade estimates resulting in spec traders taking profits. The national yield fell 2.2 bushels/acre to 178.5 due to larger yield reductions in the western states. (ND, SD, NE, CO and KS) On the demand side, exports were left unchanged, but Feed and residual use decreased by 150 million bushels to 5.950 billion bushels. Net-ending stocks were down 86 million bushels and are currently projected at 1.567 billion bushels.

USDA 2025/26 US Carryout (Billion Bushels)

USDA 2026 US Harvested Acreage (Million Acres)

USDA 2026 US Yield (Bushels per Acre)

USDA 2026 US Production (Billion Bushels)

USDA 2026/27 US Carryout (Billion Bushels)

Harvest progress came in ahead of both last year and the five-year average. Look for harvest progress to push north in the coming weeks as favorable weather pushes the crop to the finish line.

With harvest pressure building, the funds extreme length and another USDA report a couple weeks out, I am looking for some weakness in the markets. (Provided we don’t see geopolitical support) There is a gap in the charts from 3 eeks ago that remains intact. If this market is going to remain supported or move higher, we are going to need more fund support. Setting the markets back 20-25 cents would allow the funds to make some profits and allow others to buy back in. I don’t know how quickly it will happen, but I do expect CZ26 to fill the gap at $5.09 before coming back to current or higher levels. Remember my stat from last weeks letter, “December corn futures have never posted a high in September.” The USDA’s latest estimate puts the stocks to use ratio at 9.7% which is supportive of $5.50 CBOT prices.

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The markets put the brakes on their rally last week as traders headed for a three-day weekend. With a USDA report on the 11^th, the funds long position and a chance for peace talks in the Black Sea region trade was light to end the week. December corn ended the week unchanged awhile March and May futures finished 1 and 3 cents higher. The funds ended the week long 394,003 corn contracts and long 244,920 soybean contracts.

Ukraine’s President Zelenskiy said U.S. negotiators visited Kyiv and Moscow over the weekend to discuss the war, although no major breakthroughs have been seen with the visit. This is the second time Steve Witkoff and Jared Kushner have gone over to try and end the war, the last being in February.  Despite the talks and outside efforts toward peace, Russia & Ukraine strikes continue.

This Friday the USDA will release its September Crop Production report. I am not expecting this report to have any significant changes but would not be surprised if they lowered corn yield by a bushel or two from their August report. The USDA’s August report put yield at 180.7 bushels per acre. I feel like the market is currently trading at 178 bushel per acre, so any estimate above this level is probably neutral to bearish the market.

With the next quarterly Grain Stocks report out at the end of the month, the USDA most likely will not touch the current feed/residual usage estimate until the October WASDE report, once the results of the Grain Stock report are available. This is the number that has the potential to add significant bushels to our carryout. The USDA is currently using 6.350 billion bushels as its estimated. This is an 896-million-bushel increase from last year, while combined major livestock numbers (cattle on feed, hogs, broilers) over the corn marketing year are essentially flat from a year ago. In my opinion we could easily see 200 million bushels back on the balance sheet which changes our stocks/use ratio significantly.

Harvest progress ratings remain ahead of pace for corn doughing (92%), denting (62%) and maturity (13%).

I look for the markets to soften a bit this week ahead of the USDA report and stabilize over the next month or so as we digest field reports. Interestingly, December corn futures have never posted a high in September, and soybeans have only done it once (2012). Could this be the year?

Markets are volatile and we appear to trade more on comments than fundamentals. It took one headline from Putin to break the wheat market 30 cents! That’s what we’re dealing with here, and who knows what the next comment or tweet may bring.

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