Key Takeaways
- • December corn futures fell 30½ cents this week, failing to hold above $5/bu, as a bearish USDA Grain Stocks report showed September 1 corn inventory at 2.095 billion bushels—173 million bushels above WASDE estimates, signaling ample supply and ending the recent rally.
- • Wheat, soybeans, and cotton all declined in sympathy with corn weakness: December wheat fell 20¼–26¾ cents across exchanges, November soybeans dropped 40¾ cents, and cotton contracts fell 383 points as China maintained tariffs on U.S. soybeans, limiting purchases to state-owned entities.
- • Livestock markets showed modest declines; October live cattle fell marginally with cash beef prices at $220–226/cwt in the North, while lean hogs fell 35 cents and posted record net short positioning by managed money at 44,186 contracts, reflecting persistent sector weakness.
- • U.S. harvest progress remains on pace: corn at 18% complete, soybeans at 17%, and cotton at 17% harvested with 70% of bolls opening, while crop condition ratings held steady at 57–58% good/excellent for row crops.
- • Managed money positioning shifted mixed: corn specs reduced long exposure by 36,587 contracts, while soybean specs added 23,877 contracts back to a record net long of 241,164 contracts, reflecting divergent sentiment amid tariff uncertainty and supply dynamics.
Summary
Agricultural commodity markets experienced a sharp reversal this week as a bearish USDA Grain Stocks report torpedoed the recent rally in grains and triggered broad-based selling across the complex. The catalyst was the quarterly NASS Grain Stocks report, which revealed September 1 corn inventory at 2.095 billion bushels—173 million bushels higher than USDA's WASDE forecast for 2025/26 ending stocks. The higher-than-expected carryover supply pressured December corn futures down 30½ cents, with the contract failing to hold above the $5/bu level and signaling that corn bulls have exhausted near-term momentum. Supporting data showed U.S. corn harvest at 18% complete as of September 20, in line with the 5-year average, while crop condition ratings remained steady at 57% good/excellent. Ethanol production declined to 1.007 million barrels per day for the week ending September 18, down 21,000 bpd, with total stocks at 23.865 million barrels. August corn crush totaled 477.7 million bushels, up 4% year-over-year despite being 0.3% above July levels. Export sales for 2026/27 lagged at just 535,989 metric tons in the week of September 24. CFTC data showed managed money reducing their net long position in corn futures and options by 36,587 contracts to 377,850 contracts as of September 29.
The wheat and soybean complexes followed corn lower in sympathy selling. Chicago Board of Trade soft red winter futures fell 20¼ cents, while Kansas City hard red winter December contracts slipped 26¾ cents. NASS data showed total wheat production at 1.534 billion bushels, up only 3 million bushels from August estimates, with September 1 grain stocks at 1.846 billion bushels—down 288 million bushels year-over-year but below market expectations. Winter wheat planting stood at 27% complete as of late September, with 2026/27 export sales recorded at 289,255 metric tons for the week of September 24. Managed money added 8,526 contracts to their net short position in wheat to 21,670 contracts. Soybeans suffered more acute pressure, with November contracts down 40¾ cents amid ongoing U.S.-China trade tensions. China's decision to maintain soybean tariffs following bilateral meetings limited purchases to state-owned buyers, dampening private sector demand. Weekly export sales reached just 1.034 million metric tons for 2026/27, with buyers notably quiet and only 105,000 metric tons sold to unknown destinations via daily announcements. August soybean crush totaled 209.6 million bushels, down 5.53% from July but up 5.86% year-over-year. Despite the weakness, CFTC data showed managed money adding back 23,877 contracts to their net long position to a record 241,164 contracts as of September 29—suggesting some contrarian positioning ahead of South American season developments. Soybean meal fell $23.50 for December delivery, though bean oil posted a 78-point gain, indicating divergent component strength.
Livestock markets registered more modest declines as the complex continued to consolidate recent weakness. October live cattle fell marginally on the week with cash trade in the North at $220–222/cwt and Southern sales at $226/cwt. October feeder cattle slipped 30 cents with the CME Feeder Cattle Index down $1.95 to $336.84. Wholesale boxed beef prices declined with choice cuts falling $4.64/cwt to $374.19 and select down $1.27 to $354.49, narrowing the choice/select spread to $19.70. Weekly beef production rose 13.2% week-over-week to 487 million pounds but remained down 2.8% year-over-year, with year-to-date production down 5.2% on a 7.5% slaughter decline. Managed money added 4,321 contracts to their net long in live cattle, taking the position to 51,304 contracts, while feeder specs added 729 contracts to 7,638 contracts net long. Lean hogs fell 35 cents for the week with the CME Lean Hog Index down $1.49 to $80.71 as of September 30. The USDA Pork Carcass Cutout faced continued pressure, declining $2.26 to $84.48/cwt, with butt, picnic, and rib primals reporting higher. Weekly pork production edged up 0.5% to 545.7 million pounds but remained 2.3% below year-ago levels, while year-to-date production is down 0.1% on a 1% slaughter decline. CFTC data revealed managed money pushing their net short position in lean hogs to a record 44,186 contracts in the week ending September 29, up 8,638 contracts, reflecting intensified bearish conviction in the sector. Cotton also declined, with contracts falling 383 points despite late-week gains on Friday. Crop Progress data showed 70% of U.S. cotton with bolls opening and 17% harvested as of late September, with condition ratings up 1 percentage point to 35% good/excellent. The Brugler500 index declined 1 point to 294. Export sales improved to 202,567 running bales for 2026/27 with shipments at 149,507 running bales for the week of September 17, while the Adjusted World Price fell 93 points to 65.16 cents/lb on Thursday. Spec traders trimmed their net long position by 7,017 contracts to 74,596 contracts.
The wheat and soybean complexes followed corn lower in sympathy selling. Chicago Board of Trade soft red winter futures fell 20¼ cents, while Kansas City hard red winter December contracts slipped 26¾ cents. NASS data showed total wheat production at 1.534 billion bushels, up only 3 million bushels from August estimates, with September 1 grain stocks at 1.846 billion bushels—down 288 million bushels year-over-year but below market expectations. Winter wheat planting stood at 27% complete as of late September, with 2026/27 export sales recorded at 289,255 metric tons for the week of September 24. Managed money added 8,526 contracts to their net short position in wheat to 21,670 contracts. Soybeans suffered more acute pressure, with November contracts down 40¾ cents amid ongoing U.S.-China trade tensions. China's decision to maintain soybean tariffs following bilateral meetings limited purchases to state-owned buyers, dampening private sector demand. Weekly export sales reached just 1.034 million metric tons for 2026/27, with buyers notably quiet and only 105,000 metric tons sold to unknown destinations via daily announcements. August soybean crush totaled 209.6 million bushels, down 5.53% from July but up 5.86% year-over-year. Despite the weakness, CFTC data showed managed money adding back 23,877 contracts to their net long position to a record 241,164 contracts as of September 29—suggesting some contrarian positioning ahead of South American season developments. Soybean meal fell $23.50 for December delivery, though bean oil posted a 78-point gain, indicating divergent component strength.
Livestock markets registered more modest declines as the complex continued to consolidate recent weakness. October live cattle fell marginally on the week with cash trade in the North at $220–222/cwt and Southern sales at $226/cwt. October feeder cattle slipped 30 cents with the CME Feeder Cattle Index down $1.95 to $336.84. Wholesale boxed beef prices declined with choice cuts falling $4.64/cwt to $374.19 and select down $1.27 to $354.49, narrowing the choice/select spread to $19.70. Weekly beef production rose 13.2% week-over-week to 487 million pounds but remained down 2.8% year-over-year, with year-to-date production down 5.2% on a 7.5% slaughter decline. Managed money added 4,321 contracts to their net long in live cattle, taking the position to 51,304 contracts, while feeder specs added 729 contracts to 7,638 contracts net long. Lean hogs fell 35 cents for the week with the CME Lean Hog Index down $1.49 to $80.71 as of September 30. The USDA Pork Carcass Cutout faced continued pressure, declining $2.26 to $84.48/cwt, with butt, picnic, and rib primals reporting higher. Weekly pork production edged up 0.5% to 545.7 million pounds but remained 2.3% below year-ago levels, while year-to-date production is down 0.1% on a 1% slaughter decline. CFTC data revealed managed money pushing their net short position in lean hogs to a record 44,186 contracts in the week ending September 29, up 8,638 contracts, reflecting intensified bearish conviction in the sector. Cotton also declined, with contracts falling 383 points despite late-week gains on Friday. Crop Progress data showed 70% of U.S. cotton with bolls opening and 17% harvested as of late September, with condition ratings up 1 percentage point to 35% good/excellent. The Brugler500 index declined 1 point to 294. Export sales improved to 202,567 running bales for 2026/27 with shipments at 149,507 running bales for the week of September 17, while the Adjusted World Price fell 93 points to 65.16 cents/lb on Thursday. Spec traders trimmed their net long position by 7,017 contracts to 74,596 contracts.
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