The Bull Run Rolls On as Grains Hit New Highs

A sensational end to an exceptional week saw beans and wheat move sharply higher while corn finished well off early double-digit gains but still finished higher. Weather, demand, only modest farmer selling and a frenzied buying appetite from the speculative community all contributed to the massive weekly gains. A hot/dry finish to the 2026 US growing season is becoming more likely to add even more market bullishness to the reality of the shrinking corn crop that the USDA and several major crop tours found in recent weeks. Political posturing, war stalemates, and record demand continue and will welcome the US weather concern as August ends on Monday and the calendar accelerates into harvest.

News and Notes:

• The US bean crop was expected to be on its way to a near trend yield until this week’s forecasts added excessive heat and the early stages of a flash drought for many areas of the Soybean Belt into mid-September. The late season heat and dryness will not let the US crops finish with the potential that was expected just a week ago. China’s crops are also finishing poorly after a very inconsistent growing season that will leave their yields below average. Add in Europe’s record drought and the northern hemisphere growing season will be the worst since 2012.
• The corn, bean and wheat charts show the inspiring two-week rally that has seemingly gained steam each day with either another piece of bullish news or an increasing anxiety from the end user community or near unbridled enthusiasm from the speculative community. The run to new three-year highs in each market may just be a prelude now that the weekly charts have major bullish breakouts and if the markets hold together on Monday, the monthly charts will have an equally impressive breakout. The funds are holding huge new longs in corn and beans and with the wheat market also having a fundamental and technical breakout, the funds are likely to shed some of their corn and bean positions and roll those longs to wheat.
• After the bean oil and RIN markets fell sharply on fears that the administration would implement larger totals for Small Refinery Exemptions, President Trump announced on Friday a substantial 500 Mga RVO expansion will be offered to help offset the larger SREs. Like the cattle news, this is all about kissing a## to get votes in the November elections.
• All six standing Sales Targets were hit last week, and the updated totals are on the table on Page 3 along with the move to put all crop year’s Sales Targets to On Hold. The November ’27 bean target was hit in Friday’s rally. Another corn call re-ownership trade was rolled up to take risk off the table but keep upside intact. This is the most interesting market offering great opportunities we have seen since late 2021 and the first half of 2022.
• The worst-case scenarios that were traded into wheat prices when Russia invaded Ukraine are becoming more a reality every day. The Black Sea remains mostly closed and with this week’s strong threats from President Putin to escalate Russia’s bombing of Ukraine energy and logistics infrastructure, the loss of Black Sea exports will get worse before it gets better.
• Weekly Changes: Corn + 28 1/4 (Sep ‘26), + 28 (Dec ‘26), Beans  + 51 1/4 (Sep ‘26), + 48 1/2 (Nov ‘26), Wheat + 85 1/2 (Sep ’26), Crude - 336, Diesel - 1358, Dow + 231, US Dollar  + 929, Cattle  - 620, Feeder Cattle – 813 , Hogs  + 102, Cotton + 303, Milk - 14 (16.41).

What a twelve-trading session performance in every major crop as not only were the grain and soy gains scary, cotton, oats, and several other crops are on their best heater in years. Unfortunately, the cattle markets have been going hard the other way as election year actions to lower food costs have produced even larger losses over the last 4-months than at the start of Covid. It is impossible to determine how is high or to find the “black swan” event that could derail the bullish runaway train, so that is why sales should continue to be made to reward the rallies while also appreciating that these prices may not be high enough to accomplish the dual mandate of rationing some of the record demand and to attract significant acreage expansion in all crops in both hemispheres in 2027. Expect increased volatility with an ongoing bullish bias. Have a great weekend.