Top Tips on a Thursday
Earlier this week, U.S. Treasury Secretary Scott Bessent announced his plans to meet with his Chinese counterpart over the weekend, with presidents Donald Trump and Xi Jinping still planning to meet a week from today in Washington, D.C.
These meetings will address a wide variety of trade topics, with agricultural goods almost certain to remain on the front burner. What does that mean for grain price prospects? Quite a lot, actually, with China by far the world’s No. 1 soybean importer. It also leans on foreign imports for a variety of other commodities.
But that’s just one thing on industry experts’ minds right now. Harvest progress could cause a bearish shift in prices over the coming weeks. But that will have to be balanced against tightening stocks for corn and soybeans, with many other factors also in play right now.
Our latest edition of Top Tips attempts to untangle some of the messy details and drill down to some actionable items you may want to consider in the short term. Keep reading to learn more!
- China’s demand hinges as much on political favors as it does on general economics.
- Communication matters — the most reliable producers tend to get the most favorable business.
- Plus: Why you may want to sell any corn coming off the combine that you can't fit in the bin.
Nick Tsiolis, Farmer’s Keeper
“In the grain markets, Chicago sets the futures price, and the buyer sets the basis. Basis is the part farmers can negotiate, and it’s important they be transparent: Tell the elevator how many bushels you have in storage and when you want move them. This information allows buyers to match what their purchasing needs are with what’s available in their area, leading to them thinking about you. Not being transparent may lead the elevator to believe you aren’t even in the market.
“Communication also matters. The merchandiser’s main goal: They want trucks to show up tomorrow. They may have a budget, but their first priority is to keep bushels moving through the system. They’re not necessarily calling the biggest producer first. It’s the most reliable producer that gets favorable business.”
— Nick Tsiolis, CEO and Founder, Farmer’s Keeper
ACTION: Tell the elevators, “I’ve got ‘XXX’ bushels, and I’d like to be empty by the end of March. We can probably deliver 100,000 bushels this month, if the price is right.”
Jamie Gieseke, Paradigm Futures
“Three factors stand out. The anticipated meeting between President Trump and Chinese President Xi Jinping could encourage another round of U.S. soybean pre-buying. The Sept. 30 Quarterly Grain Stocks report will also effectively close the books on 2025-26. Recent reports have shown stronger-than-expected corn disappearance, easing concerns surrounding USDA’s unusually large feed and residual estimate. Finally, Brazilian soybean planting is about to get underway with better soil moisture than a year ago, although forecasts suggest some deterioration across key growing regions.
“October crop insurance price discovery may be just as important for growers expecting a Revenue Protection claim. With December corn futures near $5.40, those growers still have downside price exposure through October. The decision is whether to accept the risk of where the October average ultimately settles or consider using put options to protect current price levels through the discovery period. Even for growers not expecting a claim, the counter-seasonal rally has left momentum indicators elevated and managed-money positioning leaning bullish.”
— Jamie Gieseke, principal, Paradigm Futures
ACTION: With harvest approaching, it may be worth considering similar downside price protection through October.
Susan Stroud, No Bull Ag
“The strength in soybean meal is becoming increasingly difficult to dismiss, with futures trading at the highest levels since mid-2024. U.S. export commitments for 2026-27 are already up 15% from last year’s record, while South American premiums continue to firm and U.S. meal remains competitive on the world market. Additionally, harvest delays in the western Corn Belt are threatening to temporarily slow crush rates and tighten nearby meal availability even further.
— Susan Stroud, analyst and CEO, No Bull Ag
ACTION: Don’t overlook the soybean bids coming from your local crusher. Strong meal values are supporting crush economics, which could translate into stronger basis or attractive nearby delivery opportunities as harvest gets underway.Eric Relph, Commstock Investments
“Livestock Risk Protection is another tool in the toolbox. It’s not something that I would press on anyone, but it is an affordable, cost-deferred method of protection. You’re not going to get trampled by the board. It’s essentially like buying an option. You’re never going to get margin calls on it. And the premiums aren’t due until the cattle are sold. So, it is cash-flow positive. It’s not margin intensive. That makes it a little easier to stomach.
“I do think we’ve turned a corner in the cattle market. There’s an argument to be made for a timing cycle high coming around late fourth quarter, early first quarter. That will be a marketing opportunity that really needs to be captured by a lot of folks. There’s a lot of dollars still going to be out in these cattle, a lot of dollars at risk. I mean, 500-pounders bringing $2,000, $2,300. You’re talking some serious money. We’ve got to do something. This is an option, something we can do that, again, is cost deferred that can help us protect the bottom line — keep us from putting the farm at risk, as it were.”
— Eric Relph, risk management specialist, Commstock Investments
ACTION: Consider Livestock Protection on cattle.
Jon Scheve, Scheve Grain
“The bean market actually took the USDA reports in stride. We’re looking at ending stocks that are going to be as tight as last year, if not tighter. That’s not bearish. I think this is a solidly long-term bullish scenario for beans. I don’t think we’ve seen the high at all in soybeans. For now, we should be range-bound between $12.50 and $13.50 until we get something new.
“In corn, December futures hit a three-year high at just under $5.50 per bushel in early September, which may turn out to be a near-term peak. But longer-term prices, such as March 2027 futures, still hold potential for further upside. For now, current corn prices should offer many farmers opportunities to turn a profit.”
— Jon Scheve, adviser and owner, Scheve Grain
ACTION: Sell any corn coming off the combine that you can’t fit in the bin. You can sell it now for at or slightly above breakeven, and then leave whatever else you have as an opportunity to see what the market brings down the road.
Andrew McCarty, Pluto Commodities
“Grain prices in the coming weeks will likely be driven by harvest results, demand, fund positioning and geopolitics. Early corn and soybean yields will be closely watched against USDA’s expectations, especially with the corn stocks-to-use ratio now below 10%. Strong corn exports and continued Chinese soybean purchases remain supportive, while wheat will stay sensitive to Russia-Ukraine headlines and any changes to Black Sea grain movement. After the sharp August rally, large speculative fund positions also leave the markets vulnerable to profit-taking. Harvest pressure and weakening basis could add another layer of pressure as more physical grain comes to market.
“For farmers, the key is to reward rallies without becoming overly aggressive sellers. With corn above $5.25 and soybeans above $13, producers who need harvest cash flow or storage space should consider getting comfortable with enough sales to remove near-term risk. At the same time, current balance sheets and strong demand still provide reasons to remain constructive postharvest.”
— Andrew McCarty, founder and president, Pluto Commodities
ACTION: Make enough sales to comfortably get through harvest but maintain upside exposure if tighter supplies and strong demand push prices higher afterward.
Mike Castle, StoneX
“Chinese President Xi Jinping is scheduled for his much-anticipated visit to the U.S. next week, setting the stage for additional volatility. China has made significant progress toward its alleged agreement to purchase 25 million metric tons of U.S. soybeans despite the availability of cheaper South American supply. That’s helped fuel a roughly $2-per-bushel rally over the last few months.
“The other elephant in the room for the broader grain and oilseed sector regarding this agreement is the lack of progress on the alleged purchases of an additional $17 billion in non-soy agricultural products. If this meeting results in an announcement of other products entering the mix, such as corn, wheat, cotton and milo, it could act as the next shot in the arm to continue the rally. If not, however, the market could express its disappointment.
“It’s important to keep in mind how much risk is being carried into this meeting given the massive buildup of speculative net length from managed money. Much of this China demand is based purely on political favor, not economics. That means any fresh tensions over pending U.S. arms sales to Taiwan, China’s control of rare earth minerals or AI competition could carry significant risks to the grain markets, especially if one wrong headline sparks fear in managed money.”
— Mike Castle, senior commodities economist, StoneX
ACTION: Brace for more grain market volatility in coming weeks and the potential for a speculator-driven sell-off depending on what comes out of the Trump-Xi meeting.
Chris Swift, Swift Trading Co.
“As a component of energy, corn and soybean oil [and] soybeans, have benefited from the sharply higher prices of diesel fuel and gasoline. Algorithmic trading programs are tied internally and can have dramatic impacts on grains and oilseeds when energy is influenced one way or the other.
“With the heat wave settled in, it should help to promote corn drying in the field, won’t help any beans that needed a pod filling rain and is keeping a large portion of wheat acres from being planted. The latter will impact cattle grazing as well. Demand has remained good for all three and is expected to continue as other countries’ production is not stellar. The war between Russia and Ukraine will continually hamper shipping that has helped keep wheat prices buoyed. Long way around the barn to say, until the war ends and drought broken, prices are expected to rise.
“The above factors have been beneficial in pushing prices higher. Any changes in the above would be anticipated to send prices sharply lower. However, until such, prices are anticipated to continue higher. For farmers that will need to market some inventory off the combine, consider owning an at-the-money call option, and forward-contracting the corn or beans while basis has improved. This will give producers the courage needed to make sales into a higher market, without fear of missing out, and the benefit of swapping from unlimited risk to a fixed risk. If you’re going to store, then basis becomes more important, and how much carry each of the three markets has to spot.”
— Chris Swift, founder, Swift Trading Co.
ACTION: Put options may be a more viable way to manage adverse price fluctuation with the ability to roll up lower strikes if price continues to advance.
Joe Fallico, Insignia Futures & Options
“Harvest pressure is beginning to build as corn and soybean harvest moves ahead of its normal pace, but producers should also pay attention to the underlying supply-demand picture. USDA’s September report lowered its corn yield estimate to 178.5 bushels per acre and reduced projected 2026-27 ending stocks to roughly 1.57 billion bushels. Soybean production was raised slightly, but stronger projected exports helped push expected ending stocks down to 310 million bushels.
“With harvest accelerating, additional supplies moving into the cash market could create near-term price pressure. At the same time, relatively tighter projected stocks and continued demand could make grain prices increasingly sensitive to export activity, South American weather and future USDA revisions once the initial harvest pressure drops off.
“If grain needs to be moved at harvest, futures or options may provide ways to maintain price exposure or manage downside risk without necessarily keeping the physical grain. Producers who plan to store should also compare the cost of storage with the futures market’s carrying costs and their local basis before assuming that holding grain will result in a better price. Derivatives trading involves substantial risk of loss and is not suitable for all investors.”
— Joe Fallico, commodity futures broker and president, Insignia Futures & Options
ACTION: Producers with unpriced grain should consider separating their harvest and storage decisions from their price decisions.