This is the SFN Market Report with Brooks Schaffer of Palmetto Grain. Reach him at brooks@palmettograin.com or 843-540-4540.
Grain and oilseeds are having a disappointing week on very low volume. Trump is scheduled to have a call with Chinese President Xi Jinping on Friday. Early in the week, there were rumors that he would announce Chinese purchases of soybeans and jets from Boeing, in addition to a deal on TikTok and computer chips. As the week has gone on, there seemed to be less and less credence to that rumor, so the bean market traded lower.
We are starting to see harvest gain more steam in the Midwest. Yield reports are still very mixed, but there are a lot of people disappointed in their yields compared to their expectations. There is certainly more chatter about disease pressure. Producers across the Midwest are racing to harvest wet corn because the stalks are degrading so rapidly. There is some rain in the forecast now for parts of the Midwest, but it is going to do more harm than good on the crops in the field. We do still need some moisture to keep water levels in the Mississippi from getting too low.
The market is turning focus to South American weather, and there are no major threats yet. We are still on the early side. Most planting occurs in October, so it is rapidly approaching. Crops planted in October could be harvested starting in January. If China is going to try to hold out and avoid U.S. purchases, it is January they are shooting for. If planting is delayed or there is any threatening weather in South America, that changes the dynamics dramatically. The Chinese could be positioning to appear to avoid making any U.S. purchases of U.S. beans and then make a deal tomorrow. The market is struggling on how to put odds on that. If China buys, we could be very tight on beans and trade north of $11. If they do not buy anything, we are going to have way too many and trade below $10. We are still sitting at a crossroad that we have been at for months.
Outside markets are positive but have not translated to strength in the ag markets. The Fed cut interest rates by a quarter point, as widely expected, and the dollar has traded to lows not seen since 2022. Gold rallied to all-time highs. Exports this week were right in the middle of the range of expectations for corn, wheat and beans. Corn total commitments of new crops stand at 938 million bushels, which is up 68% from last year’s 559 million and are the highest in four years. The market assumes some of these will be front-loaded, but we are still expecting very strong exports on corn.
The market will turn focus to South American weather now. As we enter harvest season, U.S. weather cannot really help yield — only hurt it. Rain now in the Midwest is not bearish anymore. The market will be watching harvest progress and yield reports. USDA will release quarterly stocks on Sept. 30, which will be the final old crop carryout number. That is the number that will go as carry-in on the new crop balance sheet. Then the next supply and demand update will be on Oct. 9, which will have some harvest data included in the yield estimate.