MARKET UPDATE

You can scroll to read the usual update as well. As the written version is the exact same as the video.

Timestamps for video:
Crop Tour: 0:00min
Weather: 3:45min
Corn: 4:20min
Beans: 7:40min
Wheat: 12:45min
Cattle: 13:40min

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Overview

Grains mostly lower across the board while the cattle market continues it's epic run.

Usually, the crop tours don’t make a major impact on price action.

However, they do give us our first look at boots on the ground and give us some nice insights.

So let's go over the tour this far.

Crop Tours: Day 1

Last night we got the results for Day 1 of the Pro Farmer Crop Tour.

This included Ohio and South Dakota.

Tonight the results will be in for Indiana and Nebraska.

Here is the schedule.

Ohio

Corn (bpa) 🌽

2025 Tour: 185.69
2025 USDA: 196
2024 Tour: 183.29
2024 USDA: 177

Beans (Pod Count) 🌱

2025 Tour: 1,287.28
2025 USDA Yield: 57
2024 Tour: 1,229.93
2024 USDA Yield: 50

Chart from Karen Braun

Inital thoughts for Ohio, the USDA might be too high on their corn yield.

The tour came up with 186 vs the USDA's 196. A big difference.

The tour projects yield up just +1.3% vs last year.

(185.69 vs 183.29 last year)

That is not a big increase at all.

On the other hand the USDA projects yield up +10% vs last year.

(196 vs 177 last year)

That is a huge increase.

So definitely some major differences there.

Historically, the crop tour does underestimate Ohio by -4.6 bpa.

If that happened this year, it would put their crop around 190. Which would still be well below the USDA's 196.

Overall it feels like the USDA is too optimistic with their Ohio corn numbers.

Soybeans in Ohio were a lot better than the corn.

Pod counts for soybeans were up +4.6% vs last year

(1,287 vs 1,230 last year)

USDA's yield projection is 57 vs last year's 50.

Which is a +12% increase vs last year.

That does not quite line up with the pod count increase, but it's hard to navigate pod count vs yield.

Why does the tour use pod counts instead of yield? Who knows.

South Dakota

South Dakota on the other hand had a complete opposite tour compared to Ohio.

Corn (bpa) 🌽

2025 Tour: 174.18
2025 USDA: 168
2024 Tour: 156.51
2024 USDA: 164

Beans (Pod Count) 🌱

2025 Tour: 1,118.45
2025 USDA Yield: 47
2024 Tour: 1,025.89
2024 USDA Yield: 43

Thoughts for South Dakota are that the the crop looks great.

The tour projects corn yield up +10% vs last year.

(174.18 vs 156.51 last year)

The USDA is only projecting yield to be up +2.4%.

(168 vs 164 last year)

Historically, the tour over estimates the crop for South Dakota by 5.3 bpa.

Which would put the crop at 168.88. Right about in line with the USDA's 168.

So it feels like the USDA is probably right about the South Dakota crops, maybe even slightly light.

The thing about South Dakota is that the tour only included the southeastern part of the state. So if there is issues north or west it wasn’t included here.

Here is a different visual on how Pro Farmer typically compares to the USDA. On average, they are 6 bpa too high vs the USDA.

South Dakota pod counts were up +14% vs last year.

(1,188.45 vs 1,025.89 last year)

The USDA projects yield up about +9%.

(47 vs 43 last year)

So not a major discrepancy.

USDA might be too light, but again this tour only covered part of the state.

Last 30 Days Precip

If we look at the last 30 days of precip, it has been pretty dry outside of Iowa, South Dakota, and Southern Minnesota.

The southern corn belt just saw one of it's driest stretches on record.

So the USDA being too high on Ohio and some of the eastern/southern corn belt would make sense.

Here is the forecast for the next 10 days.

Nearly the entire corn belt is expected stay really dry.

This crop isn’t completely made yet. Especially soybeans.

Data says that 86% of soybeans will be drier than normal for the next 14 days.

I don’t think that will be adding bushels.

Today's Main Takeaways

Corn

Overall I don’t have a ton to update on corn.

Altough this tour might not have a direct effect on prices this week, it is going to give us some insights as to how much pollination issues this crop has etc.

The recent USDA report shifted things in a big way.

We now have an extra +1 billion bushels of supply to chew on.

Exports are going to have to do the heavy lifting, because the feed and ethanol demand numbers can’t just continue drastically higher and eat into the carryout.

But exports can.

Even with a record US crop.

Even with a massive Brazil crop.

The world still needs corn.

As the global balance sheet is still the tightest in over a decade.

Which makes me think that our export demand isn’t going away.

Yes it sucks right now. This market has sucked for 2 years.

I mean if we look back at corn prices this year, we only spent about 30 days in the top 25% of prices we'd see this year.

We only had a handful of days to hit break even for most. In the dead of winter.

We had sell signals up there but of course we wish we would’ve been aggressive. Hindsight is 2020.

The good thing about a demand driven market is that it can create a rally that lasts. Unlike a supply scare driven due to a summer drought.

Do I think corn has a good chance at seeing a rally here short term? No. Not really.

As fundamentally, it is going to be tough to muster a real opportunity unless the USDA is way off about the size of the crop. Because we have a ton of supply to chew through.

But I also don’t think we need to spend a ton of time below $4.00

Last year we only spend about a month below $4.00 with a balance sheet relatively close to this year.

(Sorry I know I've shown this chart a thousand times)

It doesn’t matter today.

But given just how drastic of shift we've seen in the corn to soybean ratio, we will be looking at much less corn acres next year.

Which could provide opportunities in 2026.

Maybe the bottom is in.

Maybe it's not.

Regardless we aren’t selling corn down here anyways.

I could see us struggling heading into first notice day at the end of the month like we usually do.

That could very well mark our bottom if it's not in.

Whether the bottom is in or takes another few weeks, odds say we will be higher a month from now.

If we stay low though October, insurance payments increase.

It's kind of ironic that we usually rally going into October.

Just look at this 10-year seasonal.

Technicals:

Dec corn sitting at resistance here (green box).

It was old support and new resistance.

We could rally as high as $4.16 and this would still be considered just a technical bounce in a broader correction.

As that is 61.8% of the mid-July highs.

If we break above that, then we could be more confident the bottom is in. But until then, can’t be confident.

Weekly Chart:

All things considered, the corn market has been holding up extremely well.

The USDA just gave us a 189 yield and added +1 billion bushels of supply to the balance sheet.

Yet, today was our first day trading lower since the report. As we nearly erased the entire USDA sell off.

Last week we actually closed higher on the week and left a pretty optimistic dragon fly candle. That with follow up, would look pretty good.

Soybeans

We've went over the fundamentals several times in soybeans, and how friendly of a change the USDA report had.

So today is mostly going to be the charts.

But first, let's look at the funds.

Going into the USDA report, they were getting short soybeans.

That new short position quickly become underwater.

They were big buyers last week and covered half their short position.

On this recent soybean rally, do you know what also rallied?

The meal market.

The funds are holding a MASSIVE record short position in meal.

Here is another visual of their meal position and just how large of a short this is.

Like soybeans, they were decent buyers last week.

Looking at the meal chart (continuous), if we break that downtrend it might just give the funds a reason to cover.

Which would help support the bean market.

On the other hand, if we fail to hold this green box we might go test the bottom of the support.

So that is the two areas we are watching to see what unfolds.

For Dec meal, we are at a key spot.

Not only if this is this a key support & resisitance area.

We also clawed back 61.8% of the sell off from June.

If we can get a break above this level, it should spark more upside.

Technicals:

I do not mind making some small sales here.

But I am personally waiting to alert a full blown sell signal as $10.30-40 soybeans aren’t all that appealing and I think we could see additional upside.

However, if you know you are going to have to move something soon or at harvest, I do really like keeping a floor for downside protection.

Call us if you need help or have questions: (605)295-3100

Short term I do see some reasons to be cautious here.

We left a spinning top candle yesterday, and followed it with a red candle today.

It typically leads to a pullback when it happens at the top of a range, and a bounce at the bottom of a range.

After a +60 cent rally, a pullback shouldn’t come as a shock.

The most common pullback pattern is an "ABC" pullback.

We get the intial A wave down.

Then the B wave bounce.

Then the last C wave lower.

Looking at the 4 hour chart. We could very well be seeing this unfold right now. As we got that intial flush and bounce.

Now on the other hand, we have a potential bull flag pattern in place.

Which is bullish if it plays out.

The 38.2% retracement of the pole at $10.23 is usually considered the ideal retracement. Which lines up with the bottom of the flag. If you exceed the 50% level at $10.15, then the set up becomes invalid.

So overall, even though I am cautious here short term, and would not be surprised to see a pullback.

My bias still leans higher, medium, and long term.

If we do get a pullback, as long as we hold $10.07 to $10.15 I have zero concerns with the chart and my bias remains higher.

This box would be a standard 50-61.8% pullback.

Now the level to watch to the upside is going to be those recent $10.49 highs.

Which is the 61.8% retracement up to the Sep 2024 highs.

If we bust above, I think we have room to run to $10.65 to $10.70.

That is where I will be looking to de-risk.

That is the 78.6% retracement up to the harvest highs last year.

That is exactly where we saw two major tops this year.

Continuous Chart:

If we look at the continuous chart, every 3 months prices have came up to re-vist this $10.65 to $10.80 area.

This box has marked each major high the past year.

It has been about 3 months since our last major high in the box.

So I would like to think we will get another shot at it.

Now on the other hand.. if we ever take out those $10.80 highs soybeans have an immense amount of upside potential.

Again, it is a BIG IF.

But there is zero resistance past $10.80

Soybeans do not like spending much time in the $11.00's

They more often than not slice right through, to the upside and downside.

Or sometimes we run up to $12.00 then crash back below $11.00

I am not calling for $12.00 soybeans. I am simply stating that beans do not like trading in the $11.00's and that IF we ever did break $10.80 there is very little resistance.

The only way I see this happening is if we struck a deal with China and or somehow the US crop severely disappointed.

We could go years without seeing $12.00 beans.

Weekly Chart:

Last week was impressive price action.

We completely engulfed the last 5 weeks of price action.

Breaking out of this clear bullish wedge.

Wheat

The wheat market continues to struggle.

As we fractionally posted a fresh round of contract lows yet again today.

But looking at the charts, they aren’t damaged and still look like a good area of value long term.

I think this wheat market has more potential upside than downside here, sitting at mutli-year lows.

Today we are just going to look at the charts as there is very little fresh fundamental news.

Technicals:

Despite new contract lows, we are still hovering right at the bottom of this massive falling wedge pattern.

I am looking for a test of the top of the wedge.

The top of the wedge also aligns with the golden zone up to those June highs. (50-61.8% of those highs).

(I switched to Dec wheat instead of Sep)*

We are also still showing bullish divergence on the RSI.

Prices made a new low.

The RSI did not.

This does not mean a rally is coming. It just means downside momentum is getting weaker.

Nothing new on KC wheat. Simply chilling near the bottom of this giant wedge.

Not looking to de-risk until closer to the top.

KC is also showing bullish divergence.

Cattle

Cattle continues it's historic run.

My next level to watch is 356.625

That is the 261.8% fib extension level from the June rally and pullback.

So I like that as a target to layer into downside protection.

As we have been mentioning, we like puts rather than futures. As with puts you do not get all of the margin calls etc that can come with futures if the market keeps pushing higher.

To the downside, I am simply watching the bottom of this channel.

If we break below, that is going to be out first sign of weakness.

We are also showing very clear bearish divergence.

Prices made new highs, the RSI did not.

Doesn’t mean a correction happens tomorrow. Just a warning sign.