This is the SFN Market Report with Brooks Schaffer of Palmetto Grain. Reach him at [email protected] or 843-540-4540.
We continue to trade through the doldrums in the grain and oilseed markets. The trade volume in corn on Tuesday this week was the lowest since December 2023. We are coming to the end of the growing season, so U.S. weather does not matter as much. Everyone is estimating and debating what the yield will be, but harvest has not cranked up enough in the Midwest to give much meaningful data yet. We are getting closer to planting in South America but not quite there yet, so the weather does not matter as much yet.
Most discussions revolve around yield right now as everyone makes their guesses. We hope we saw the biggest number of the year on USDA’s August report. The growing season had a few challenges for the Corn Belt. Near record-high night temps in the eastern Corn Belt, on top of sporadic dryness, hurt yield in that region. There is lots of talk of increased disease pressure this year across much of the growing season. Early yield reports—anecdotal at best—seem to confirm lower-than-expected yields, including loss due to disease pressure.
Traders are positioning for the USDA report that will be released today, Sept. 12, at noon Eastern. The average trade guess is for USDA to drop corn yield by 3.1 bushels—from 188.8 to 185.7. That brings carryout down to 2.02 billion bushels from 2.12 billion last month.
On soybeans, the average estimate is a yield reduction of half a bushel, but expecting carryout to actually grow just a bit due to slowing demand. Historically, USDA does not typically make very big adjustments on the September report. But a reduction on this report would leave the market expecting additional cuts on subsequent reports. This report is the first of the year to use actual objective measurements in the estimate rather than just statistical trend or survey data used on previous reports.
Corn demand remains very strong. September is the first month of the marketing year, and we already have total corn export commitments of 890 million bushels, compared to 526 million last year at this time. This rapid pace is second only to 967 million bushels in 2021–22, when China was a major buyer.
Soybeans are the opposite. We still do not have any purchases by China yet. We have strong and growing domestic demand, but we still need some exports. Other nontypical buyers have stepped up and bought more, but there is still a big hole to fill. We currently have commitments of 344 million bushels, compared to 523 million last year at this time. Beans are still at the crossroads: If China buys from us, soybeans could be very tight. If they buy nothing, we are going to have too big of a cushion. South American weather will be another wild card.