Grains were lower on Thursday with livestock mostly higher.
Record Brazil Estimates Pressure Corn and Soybeans
Craig Turner with StoneX says corn and soybeans saw additional profit taking Thursday and pressure from Brazilian production estimates from Conab.
New crop soybeans are estimated at 177.7 MMT, which would be up 3.5% from last year. The agency also pegged exports at 112 MMT, up 6 MMT.
Turner says Conab is forecasting Brazilian corn production at 138.3 MMT with Brazil’s corn export forecast at 46.5 MMT in corn in 2025-26, up 6 MMT from the previous marketing year.
“And it’s just a reminder to the rest of the market that once again, South America is going to plant a lot of acres and Brazil is going to have a lot of corn and soybeans. And if they have anywhere near an average yield, they’ll have more than they did last year,” he says.
Harvest Pressure
Turner says corn and soybeans are also seeing harvest pressure and farmer selling, which is not unusual this time of year.
“You’ve got to make room for the new crop. There is harvest is is underway. The farmers I talked to, they also need some cash flow. So some of that is happening too. But, you do have harvest pressure during, you know, September, before you get a post harvest rally, so you do have this death by a thousand cuts,” he says.
While there are some lower yields coming out of the early fields, Turners says the U.S. farmer is still harvesting a big corn crop.
“Even if we go to 182, you know, we’re still the most likely going to be above a 1.7 billion carryout, which puts us at about 11% stocks to use. So, I mean, we got to, we got to come down four bushels just to get, just to get to a place where we might think we could get tight in the corn market. And then even a 180 yield, probably only gets us to the low fives, most likely.
Lower Soybean Yields?
Turner says the soybean yield reports are better than corn and yields are at or even slightly higher than a year ago. However, he says these are the early soybeans which may be less impacted by the late season dryness.
However, lower soybeans yields aren’t going to make up for the slow pace of new crop exports which are running 36% behind a year ago .
“If we did come down a bushel that’s 80 million bushels off the balance sheet. So you got from 300 to 220, and you got to ask yourself, “Are we going to be price rationing exports?” Right now, there’s no Chinese demand. The reason why the markets rally big is because you have to ration exports.”
What Does the Market Want From the U.S. China Talks?
President Trump and President Xi are set to talk Friday morning and the market will be looking for signs of progress on something beyond just TikTok.
Turner says as long as the leaders talk about agriculture and specifically soybeans it will be a victory for the market.
“No one expects a deal to be announced. If they can just talk at all about ag trade and consumer product trade, you know, they’ll both be in the same room, they’ll both have their economic advisors with them. So any kind of talk that comes out of it about trade would be seen as supportive,” he says.
Higher Dollar
The higher U.S. dollar index was also a headwind for the grain markets.
Despite the cut in interest rates by .25% on Wednesday the dollar has strengthened and that is typically not a friendly factor for the grain markets and global export competition he says.
Global Glut Weighs on Wheat
In addition to the higher dollar, wheat was under pressure with the increasing global supplies of wheat.
The International Grains Council projects production at 819 MMT, up 8 MMT due to increased production in Russia, Canada and Australia.
“We have all wheat at about a 42% to 43 % stocks to usage. The real bear in the room here is Kansas City, which is now at about a 50% stock to usage,” he says.
Turner says this is making it difficult for the wheat market to gain any traction even though demand has been stronger.
Cattle Recover
Cattle futures continued to whip saw with a higher close in both live and feeder cattle futures, despite lower boxed beef values at noon and some light cash trade at lower money in the North.
Some cash trade was reported in Nebraska at $236 live and there was also dressed business at mostly $370, down $6 but with a range of $368 to $374.
Southern business developed later and was steady at $240 live.
