Top Tips on a Thursday
USDA’s September Grain Stocks report delivered a jolt to corn markets, revealing 2.095 billion bushels of Sept. 1 stocks — substantially more old-crop supply than traders anticipated. Although production estimates held relatively steady, the surprise came from weaker-than-expected feed and residual demand, effectively adding the equivalent of nearly 2 bushels per acre to the 2026 supply equation. This revelation quickly pressured corn futures below the psychological $5 threshold, though analysts suggest a floor may be forming.
Meanwhile, harvest is running behind schedule across much of the Eastern Corn Belt following persistent late-summer rainfall, creating basis opportunities even as flat prices remain under pressure. Adding to the complexity, a potentially historic “super” El Niño is developing, which could disrupt production across multiple continents in the months ahead.
Here’s what grain marketers and other experts are watching as harvest accelerates.
- Why you may want to consider locking in corn, soybean basis now.
- An El Niño gains “super” powers? It could happen this year.
- PLUS: Winter is coming — learn a few pointers on getting diesel engines ready.
Andrew McCarty, Pluto Commodities
“The biggest takeaway from Wednesday’s report is simple: USDA didn’t find a bigger crop, but it found the missing corn. Sept. 1 stocks came in at 2.095 billion bushels, revealing substantially more old-crop supply than expected. USDA actually reduced last year’s production by roughly 58 million bushels, meaning the surprise came from weaker implied feed/residual demand. That additional carry-in has roughly the same supply impact as adding nearly 2 bushels per acre to the 2026 crop.
“The focus now shifts directly to harvest yields and demand. Corn needs either a smaller 2026 crop or stronger demand to absorb this additional supply, making October’s production update increasingly important. Soybeans remain focused on harvest yields and China, while wheat’s report changed little. The report was another reminder that major USDA reports can quickly change the balance sheet, making it important to have risk-management plans in place before the surprise arrives.”
— Andrew McCarty, founder and president, Pluto Commodities
ACTION: Don’t focus only on flat price during harvest. Watch basis and futures spreads closely, particularly if you have storage.
Joshua Strine, Purdue University
“The USDA corn stocks surprise was quickly priced into futures, which often become volatile when data differs from expectations. But the effect on basis is usually much more modest. Basis is driven by local supply and demand. Local buyers know what they have in storage, so that is already reflected in basis. Producers in Indiana, Ohio, Illinois and Iowa can use the Purdue Crop Basis Tool to track their local corn and soybean basis and historical trends. In Iowa and Ohio, soybean processor basis is at its strongest level for this time of year since 2014.
“Even if impact from the stocks report is limited, history suggests basis will weaken over the next month. Corn and soybean harvest is behind schedule in several states, particularly across the Eastern Corn Belt, following persistent rainfall since late summer. With drier weather expected next week, harvest should pick up quickly, and that influx of local supply can pressure basis.”
— Joshua Strine, agricultural economics, Purdue University
ACTION: For unpriced corn without storage, consider locking in basis now to limit downside from the seasonal weakness that often runs through mid-October. Shop around for the best basis bids.
Chris Swift, Swift Trading Company
Chris Swift, Swift Trading Company
“Harvest is upon us, and weather will dictate progress. At slightly behind last year, and wet weather starting to set in, delays in harvest are expected to keep a firm tone under grains and oilseeds. Further disruptions in production and movement due to military actions around the world will help do the same. Demand was questioned on Wednesday with the release of the Grain Stocks report showing a 35% year-over-year increase in corn stocks. This dampened a lot of bull’s spirits, but with that big of a miss, it could be adjusted at a later date.
“Cattle producers have been encouraged to fix corn prices at levels they no longer wish to pay for feed. Farmers have been encouraged to re-own any pre-sold bushels with call options. Something to consider is the volatility of current events, especially impacting energy. As grains and oilseeds are a component of energy, the longer they stay elevated, the more usage of renewable fuels will be anticipated.”
— Chris Swift, founder, Swift Trading Company
ACTION: The carry in corn is helping those that will store. Pencil to paper will help to decide how many of those bushels you wish to re-own as call option premiums.
Jon Scheve, Scheve Grain
“USDA’s Grain Stocks report was not bearish on soybeans. It tells me that $13 soybeans are certainly a very fair value and still could go up, depending what happens with U.S.-China trade relations, South America and other factors. It feels like beans are probably range-bound at $12.50 to $13.50.
“Obviously, corn stocks were bearish, but we should have seen that coming with USDA’s feed and residual number making no sense. Long term, this probably won’t be overly hurtful for prices, but we’ve got harvest pressure now, and this gives the funds a reason to liquidate a little bit and allows end users to buy their needs up here for wintertime.
“Have we seen the bottom yet in corn? Probably not, but we’re close. We’re around that $5 psychological level. Are we going to test sub-$4.90? Maybe, but we’re not going to $4.50. The market realizes there’s value around $5. That doesn’t mean we won’t press it lower a little bit longer. But overall, this feels like we’re trying to set up a new floor here for the next six to 12 months.”
— Jon Scheve, adviser and owner, Scheve Grain
ACTION: If you haven’t already made sales, now’s the time to just focus on getting the crop out of the field and worry about marketing it afterward.
Dinese Watson, Merchants Bank
“Harvest season rarely goes exactly to plan, and some of the biggest challenges can come from expenses farmers weren’t expecting a few weeks ago, let alone at the start of this calendar year. Diesel fuel is a significant variable expense that has reached a record high during the busy harvest, and unexpected equipment repairs can quickly add another cost during a time when farmers are already managing a long list of expenses.
“Farmers should have a clear understanding of their cash flow heading into harvest, but just as importantly, they should communicate with their agricultural lender when circumstances change. If an unexpected repair, rising fuel costs, health concerns or weather-related delays put additional pressure on the operation, having that conversation early gives both the farmer and lender an opportunity to look at the situation and determine the best path forward. You don’t have to wait until there’s a problem to have that conversation.”
— Dinese Watson, senior vice president, ag lending, Merchants Bank
ACTION: Staying proactive and keeping your lender informed can help you navigate the unexpected while keeping the operation moving forward.
Gabrielle Bourret-Sicotte, Treefera
“As El Niño strengthens, our models show a wide range of potential impacts across different regions and crops. Areas including California, the Southern Plains, Peru and Argentina could see wetter conditions, though that can also bring risks such as flash flooding. Overall, El Niño is likely to bring more intense weather globally, but the areas at greater risk of acute climate shocks include central and northern Brazil and parts of Asia. The agricultural impact will depend heavily on existing conditions and where individual crops are in their growth cycles.
“The reason why it’s a ‘super’ El Niño is because of higher ocean temperatures. The two strongest recent El Niños were in 2015 and 1997. And these were the temperatures leading up to it. In 2015, you saw roughly 2.27 degrees C of ocean warming. At the moment, our models project this El Niño’s warming to be about 3.24 degrees C, about a full degree higher than the biggest one we’ve had so far. And our confidence in that scenario is around 95%. We’re looking at what could be a ‘Godzilla’ level of El Niño.
“Additionally, Australia and Indonesia could see increased risks of drought and wildfire, which could affect production of wheat, palm oil and robusta coffee in Vietnam. India’s monsoons may be weaker than usual, which could put additional pressure on production of sugar, rice, cotton and soybeans. Those impacts will ultimately depend on local conditions and crop timing.”
— Gabrielle Bourret-Sicotte, head of customer solutions, Treefera
ACTION: Watch weather and crop conditions across key producing regions in the coming months, particularly where El Niño overlaps with existing crop stress and critical stages of crop development, and monitor how those signals translate into production and commodity-market risk.
Matthew Giarelli, Hedgepoint Global Markets
“As we begin October and look forward, we are amid a somewhat precarious harvest. Although most USDA reports and analysts see things in line with the five-year averages for soybeans and corn, there seems to be a lack of excitement from the actual farming community. We can look to the most recent price history of 2024/2025 and compare them to 2026. We end up getting a mixed bag of results that can prove both a bullish and bearish case looking forward but also represents possible missed opportunities for farmers.
“Even with prices retreating about 20 cents in corn over the last week and a half of September, we are still looking at a 50-cent rally. This should be pushing more excitement through the community as 2024 and 2025 didn’t measure up to this type of elevated pricing going into harvest. Soybeans have had a similar path over recent years, and there shouldn’t be much of a surprise there. We can look toward what could happen this month by seeing how Octobers of 2024 and 2025 reacted after rallies into harvest:
- 2024 corn and soybeans ended October lower than they started due to bumper crops, rapid harvest and improvement of South American crop weather.
- 2025 corn and soybeans ended October meaningfully higher than they started based on harvest delays (below five-year average progress), rallies across energy markets pulling commodities along and increased crush demand.
“What does 2026 look like so far? Harvest not truly delayed as we sit at the five-year averages. Rain in the extended forecast seems to be getting lighter. This is your bearish case to sit where we are or drop a little. Funds, funds and more funds! Huge changes in institutional money from net shorts to net longs this year. If they keep adding to longs, that will be your bullish case.”
— Matthew Giarelli, director of structured products, Hedgepoint Global Markets
ACTION: Take advantage of being able to market a small percentage of your 2027 crop anywhere above expected cost of production with premium, specialty or hedge-to-arrive contracts.
Jessica Crabtree, Power Service Products
“Winter will be here before you know it, and it’s always hard on diesel engines. But many problems caused by dropping temperatures can be prevented with the right preparation. Before the first freeze, farmers should be thinking beyond equipment storage and batteries. Fuel quality and fuel-system health can play a major role in whether an engine starts reliably and performs efficiently in cold weather.
“There are three steps to make sure you’re prepared. First, dehydrate your tanks and remove any water that may have accumulated over the summer because that’s going to be your first problem. As temperatures drop, that water is going to freeze, and the fuel itself will gel. The second thing is to use an anti-gel tank additive. One of the biggest mistakes people make is adding anti-gel too late. The fuel still must be clear when you add anti-gel. Diesel contains wax, and if the diesel is already cloudy with wax, then the anti-gel isn’t really going to do much. Wax crystals are really large and, in untreated diesel, will plug the fuel filter.
“The third step is to keep emergency tank additives handy in your shop to help reliquefy gelled fuel in extreme cold or de-ice frozen fuel filters.”
— Jessica Crabtree, fuel chemist and director of technical services, Power Service Products
ACTION: Dehydrating tanks is of the utmost importance. Once harvest and other fall fieldwork is done, dehydrate fuel tanks of tractors and other diesel-powered equipment as soon as possible.
Naomi Blohm, Total Farm Marketing
“Call your grain elevator, call the ethanol plant, call whomever you sell to, and get some cash targets working right now. Sometimes those big market rallies can happen in the middle of the night, or they can race higher off of a headline, and they’re there for 10 or 15 minutes and that’s it. So it’s really beneficial to have those sales in ahead of time.”
“And speaking of the cash sales, keep an eye on your local cash basis levels. In different parts of the country right now, basis is either trending higher and getting stronger, or in some places, it’s getting a little bit weaker. It just depends on how much product is coming in during harvesttime and where the demand is. Sometimes, there can be quick basis plays that can get you an extra nickel more than you are anticipating. Some places that you sell to might offer a basis alert or your merchandiser may have other ways to be in contact with you. That’s just another way to stay on top of your marketing that’s not only watching the board of trade prices but the legitimate happenings of your backyard.”
— Naomi Blohm, senior market adviser, Total Farm Marketing
ACTION: Automate basis notifications and set triggered sales based on target prices.