Grain markets were higher early Tuesday, with cattle lower and hogs firmer.
Grains See Technical Bounce
Jon Scheve with Scheve Grain says grains were all seeing a technical bounce after the lower day on Monday as support areas were still intact on the charts.
Corn Pricing in Lower Yield Reports
He also thinks corn is getting a bump from early yield reports which are showing some lower production than a year ago due to disease pressure, especially Southern Rust.
It is most prominent in fields where producers did not use fungicide to prevent again the disease and the market is taking note of that.
“Some early results that I’ve seen in the field have been that, while farmers might have been hoping for a record for this crop, they’ve been very happy that it’s still above average in most areas,” he says.
Corn Market Doesn’t Believe USDA’s Yield Estimate
Corn solidly rejected the bearish news in the September WASDE as Scheve says the market thinks USDA’s 186.7 bu. per acre national average yield is too high.
“The trade just does not believe that there’s a 186, 187, 188, whatever the USDA printed off. The trade still continually believes that the yield is getting smaller. I think the trades with a number sub 183 at the moment, that’s what they’re really trading. ‘Cause because if we were up around 186.27, the carryout would be so significant, we’d be dropping back sub $4 futures,” he explains.
Can Corn Yield Fall Enough to Get Ending Stocks Below 2 Billion Bushels?
Scheve says he thinks the USDA’s corn demand numbers are possible with the robust export program the U.S. currently has.
Plus, he says if the U.S. soybean export program continues to lag with no China business the elevators will move corn into export channels instead which could bolster the export program.
USDA’s Soybean Export Estimate Already Accounts for Lost China Demand?
Scheve says USDA’s 1.685 billion bu. soybean export estimate for 2025-26 is the lowest in 15 years and already accounts for the loss in China business.
So if the U.S. gets a deal that would be positive for the supply and demand tables for soybeans especially if soybean yields also fall due to the dry finish.
Does the Market Believe USDA’s Acreage Figures?
If the market thinks USDA’s yield estimates are too high, do they also have doubts about acreage especially on corn?
Corn planted acreage came in at a whopping 98.7 million acres, which was up 1.4 million from August leaving some market analysts crying foul.
However, Scheve thinks that number makes sense because all the crops looked unprofitable at planting time but corn was not as bad as other crops including soybeans, so he thinks that enticed more acres of corn verses soybeans and cotton.
“And when you look at the total number that USDA printed here, 98 million and 82 million on the beans, that’s 180 million, and if we look at over time, 180 is dead center of what we normally plant on corn and beans. It’s usually planted between 178 and 182,” he adds.
What About 2026?
With low grain prices and high fertilizer prices the outlook for margins is once again negative for 2026 is the entire grain sectors and Scheve says this fall and spring look scary for producers.
“And it does cycle out the the key is to just figure the best possible scenario to lose the least amount of money to get through to the next good cycle,”
USDA Secretary Brooke Rollins said on Monday she is working with Congress to provide some sort of bridge payment for producers for this fall.
Scheve says, It’s a good band aid. I think what you will see is it might keep prices from going down because if farmers at least have some money then they don’t aren’t forced to sell. That could open up some opportunities in the market maybe at a time where you don’t expect it to normally happen,” he says.
