Labor Day is a time to turn the page. From seasons to school years, calendar flips mark beginnings, including the start of marketing years for corn and soybeans.
As growers gear up for harvest 2026, corn might seem a fairly safe bet. After all, since 1974, holding corn long term on the board with futures lost just a penny on average compared to prices the day before Labor Day.
But average isn’t every time, not by a long shot, and this broad measure of what statisticians call “central tendency” can be misleading. While average gains and losses were small, individual years were far more turbulent. July corn went into delivery nine months after the holiday with losses twice as often as it did with gains.
So, when it comes to prices, new doesn’t necessarily mean better. Cautious optimism most years turns out better than unrestrained bullishness about prospects for rallies.
Look no further than how markets performed after the holiday, which falls on Sept. 7 this year. Both July corn and soybeans lost ground 23 times the day after Labor Day, avoiding losses in 29 of the 52 years. Three months later, as December began, both markets were higher in 23 years and lower in 29 years.
But when July futures went into delivery the following summers, corn was in the red two-thirds of the time, while soybeans were a 50-50 proposition. Using this metric, corn was anything but a safe bet.
Random walk?
While you might play the same scratch-off numbers on every lottery ticket, storage decisions are typically based in part on the outlook and not what amounts to a coin flip. This, of course, doesn’t make strategies any more or less profitable because many economists see the market as a “random walk” regardless — impossible to predict with regularity.
That said, I do have opinions.
Talk of a “super El Niño” has some traders chomping at the bit to buy commodities, but the weather event historically hasn’t hurt production in South America. If anything, the warming of the equatorial Pacific is associated with increased yields in Brazil and Argentina. Soil moisture conditions are the best in more than a decade in Brazil, where planting normally is allowed after mid-September, suggesting growers there will face fewer hurdles as the country ramps up for another explosive election cycle.
A steady drumbeat of sales to China and “unknown destinations” reported under USDA’s system for daily purchases added to hopes the business won’t be choked off by fallout from the war with Iran. Total accumulated new-crop sales to all buyers are up 50% year to year, and the pace by China is well ahead of last year, when purchases didn’t begin until harvest was well underway in the U.S.
Still, coming days could be crucial. Corn and soybeans don’t trade in a vacuum, and turbulence from Wall Street and Washington could bring markets to a boil or douse rallies in a hurry. For example:
- Middle East sanctions. Iran’s response to intensified new sanctions that Treasury Secretary Scott Bessent is expected to announce is one variable that could swing the mood. Iran sells most of its crude oil to China through third parties, which could complicate talks between the presidents — Xi Jinping and Donald Trump — next month.
- Federal Reserve action. Also pay attention to the market’s reaction to the speech by Federal Reserve Chairman Kevin Warsh on Aug. 28 at the central bank’s Jackson Hole symposium.
Play corn card
Corn bulls are hoping to play a China card as they wait for El Niño drought to trigger purchases from European partners hit hard on the continent. Another war — Russia’s invasion of Ukraine — could choke off shipments out on the breadbasket of the former Soviet Union, a worry for buyers confronting currency volatility affecting their purchasing power.
Energy is in the crosshair for all these conflicts, keeping crude oil bubbling under $100 a barrel just as fears of another huge spike resurface despite the ability of Gulf states to reconfigure supply channels to avoid the Strait of Hormuz and other potential chokepoints. Growers could wake up to a barrage of bad news, raising production costs while making selling prices uncertain into 2027.
The crude conundrum also complicates ethanol’s ability to drive grain markets. Plants are on track to meet USDA’s modest target for improvement during the market year that concludes at the end of August, but inventories are starting to pile up.
Biofuels crush it
Biofuels are also a big part of the story in the soy oil market, helping support strong crush margins. Processors reaped record profits in June, but margins on the board dropped $1.50 over the past two months, though they remain above average.
December corn hit the top end of my projected selling range with its consistent move above $5, suggesting the flow of bullish data into the market must persist to maintain momentum. Make sure you can weather a downturn — incremental sales are one way to take advantage of gains.
Much likely depends on the direction of production changes from monthly USDA reports. Crop Progress conditions are in line with long-term averages, pointing to yields of 182.7 bushels per acre, a little better than the 180.7 bpa tabbed by USDA’s August survey and in line with the latest soil moisture maps.
Soybean ratings are solid, translating into yields that are better than the 52.7 bpa USDA printed Aug. 12, while Vegetation Health Index maps are at 53.1 bpa. So, objective yield data doesn’t suggest any widespread problems for the supply end of the balance sheet.
Lack of an obvious trigger could help persuade bulls to keep their powder dry. Years with big changes after Labor Day tend to accompany major disruptions, like the Great Financial Crisis of 2008-09 or the 2012 drought. There’s no doubt 2026 has been turbulent, but markets have gotten used to shocks, which could make their impacts more “meh” than “wow.”