Bulls Take Control After USDA

Friday’s strong rallies capped off a very bullish USDA report week with big gains and new multi-week high weekly closes in corn, beans and wheat as fund buying and significant world shipping issues continue to add bullish support. With fighting intensifying in the Black Sea and sharply decreased shipping capacity, the early week hope for cease fire talks evaporated between Russia and Ukraine. The US and Iran remain at an impasse over reopening the Straits which only adds to the problem. US weather remains inconsistent with more flooding rains across the ECB over the weekend while the southern tier of the Corn Belt sweltered in record heat. ProFarmer will start their crop tour Monday with their nightly updates adding to the news.

News and Notes:

• It is hard to find a comparable summer of wildly inconsistent US growing weather and even harder to find a 2-week stretch in August where too much rain was the problem. The ECB has been pummeled with drenching and flooding rain events and damaging winds while the S Plains and most of the WCB have been parched. Recent timely and well-placed rains in E Nebraska and d W Iowa will help push their crops safely to the end of the season, but the overall inconsistency in temperature and rainfall over the growing season has led to underwhelming crop ratings and corn yields 2-3% below last year’s record. Beans are in better shape, and the next month of weather will be key.
• The daily, weekly and monthly December corn charts are on Page 2 and shows that all three are putting in impressive technical breakouts in each chart. Wednesday’s USDA bullish yield estimate helped calm industry fears that larger yield and more planted acreage would be announced. With that concern now behind the trade, the funds continue to add to their net long position with their position approaching 1 BBU, or half of the expected US ending stock total. With Friday’s and last week’s strong closes, the apparent overhead targets are the July 24th high of $4.94 and then the May 13th contract high of $5.06 ½. Friday’s close was $4.83 ¾.
• The cattle markets have had a tough late summer trade and last week may have broken the low inventory bulls. Tyson announced late Thursday they will be closing/selling two additional beef processing plants as the lack of cattle and mounting losses forced the closures. It is counter-intuitive that high demand and less processing capacity would be so bearish, but the last time this happened the markets broke hard before finding solid footing for a meaningful bounce. This time it will be about timing of the Mexican border reopening and if record consumer beef demand continues into the winter.
• Please take a minute to listen to the special USDA report edition of the FieldLink podcastthat was recorded after Wednesday’s bullish report. If you want to hear my before and after report thoughts, here is the link to my segment on Chip Flory’s AgriTalkjust before the report.
• Crop tour season is upon us and the closely followed ProFarmer Tour starts on Monday. Other crop tours are finding the inconsistency cited by many agronomists with early findings supporting the USDA corn yield estimate of 180-181. High bean pod counts remain a consistent finding.
• Weekly Changes: Corn – 1 3/4 (Sep ‘26), - 2 (Dec ‘26), Beans  - 11 3/4 (Sep ‘26), - 11 1/4 (Nov ‘26), Wheat + 1/2 (Sep ’26), Crude - 649, Diesel - 1931, Dow + 1517, US Dollar  - 366, Cattle  - 5, Feeder Cattle + 362, Hogs  - 335 , Cotton + 261, Milk - 31 (16.78).

With the USDA supporting a generally bullish outlook with both their supply and demand numbers, the markets have a strong base of support for the rest of the month. China has consistently but quietly been buying US beans and are now 20% toward the goal of their 2026 calendar year purchases. With Chairman Xi and his trade entourage still working on the fine print for the September 24th trade summit in Washington, the demand outlook remains strong, with high gas and diesel prices supporting ethanol and bio-diesel profit margins. Since Covid, the “harvest” lows have moved forward into August as the USDA and September futures first notice day allowed for the bulls to gain footing into the fall. Opening calls are modestly higher after last week’s strong trade and lack of any breakthrough in either war. Have a great Sunday.