Top Tips on a Thursday
As October unfolds, farmers remain in a pivotal environment for selling grain that continues to be shaped by an influx of USDA data, government payments and shifting market dynamics. Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) payments hitting accounts this fall could deliver more than $50 per acre in some regions — an obvious cash-flow improvement. But don’t stay complacent. One-time injections still require careful strategic planning.
Last week's Quarterly Grain Stocks report caught markets off guard, revealing higher-than-expected ending stocks now sitting with commercials rather than farmers. This Friday's World Agricultural Supply and Demand Estimates (WASDE) report will provide crucial clarity as analysts debate whether yields will be revised and how the balance sheet will adjust. Meanwhile, the strongest dollar in 17 months is creating headwinds for U.S. export competitiveness, adding another layer of complexity.
What else should you be paying attention to as October marches on? The latest edition of Top Tips offers advice on managing payments, and navigating and preparing for continued price volatility in the months ahead.
- Weather conditions appear favorable for harvest progress moving forward, but frost threats also lurk.
- Don’t forget: Past performance shows prices can sometimes move more than anticipated.
- PLUS: Don’t jump to quick conclusions if your cash flow has improved.
David Widmar, Agricultural Economic Insights
“For many producers, cash flow in 2026 has improved because of higher grain prices and government payments. In early October, ARC and PLC payments from 2025 production will be distributed to producers. Depending on the crops raised and location, government payments received in 2026 (including the earlier Farmer Bridge Assistance) could top $50 per acre.
“For farm managers, it will be important to update financial projections once the latest payments are received. Second, carefully consider the implications for grain marketing needs, debt repayment and prepaying expenses. Although cash flow has improved and 2026 may feel like progress, be cautious about jumping to quick conclusions.”
— David Widmar, ag economist, Agricultural Economic Insights
ACTION: Update cash flow projections once the payments are received.
Lauren Urbanczyk, Texas Hedge Risk Management
“Last week saw huge capital flows in grains and livestock as we closed out the month and quarter, and received the Quarterly Grain Stocks report. USDA surprised the market with higher grain ending stocks for the second year in a row. The data told us that farmer selling and farmer inventory had cleared out like normal, and the majority of those increased stocks sits in the hands of commercials.
“On Oct. 9, USDA will again release the monthly WASDE report. Each monthly report has shown an increase in demand for corn and a decrease in ending stocks; this is why the contradictory data in the quarterly report caught the market off guard.
“As farmers, we can spend the next 12 months debating the numbers, but we have to trade the market in front of us. What type of runway do we have on cash flow needs and physical storage needs? Do we have enough time to give the market our time? If time is on our side, I believe that one can stay patient in regard to pricing. Basis will tell us whether or not the market is tight, and in many places, basis has been screaming. Don't forget that managing basis can be a separate decision from managing the board price. Find a trusted adviser to help you develop options strategies that provide the flexibility you're looking for.”
— Lauren Urbanczyk, co-founder, Texas Hedge Risk Management
ACTION: Consider options if time and cash flow constraints limit flexibility.
Jamie Gieseke, Paradigm Futures
“Friday's October WASDE will be a major market driver as USDA updates corn and soybean production estimates and balance sheets. Some in the trade are anticipating another slight reduction in corn yields, while soybean yields are expected to remain relatively steady. Harvest pressure will remain a factor as supplies move into commercial channels, while Brazilian soybean planting and developing weather patterns will increasingly influence expectations for South American production.
“Outside traditional grain fundamentals, recent strength in the U.S. Dollar Index has pushed momentum indicators into overbought territory. Dollar strength has weighed on commodities over the past four weeks, but a meaningful correction could help provide support for grain and energy prices. The market will also be watching for additional Chinese soybean purchases following the recent meeting between President Donald Trump and Chinese President Xi Jinping.
“Better-than-expected yields mean your percentage of production already sold is declining, potentially leaving them more exposed to a price downturn than originally anticipated. Conversely, lower yields can limit the upside benefit of higher prices, particularly for growers expecting crop insurance claims. For those with Revenue Protection coverage, each day of October price discovery reduces the opportunity to protect against a decline in the final harvest price. Understanding how changing yields affect both marketing exposure and potential insurance indemnities is especially important right now.”
— Jamie Gieseke, principal, Paradigm Futures
ACTION: Compare actual harvest yields against the production estimates used in individual farm marketing plans.
Matthew Pot, Grain Perspectives Inc.
“The October USDA report is tomorrow, and corn has a wide range of trade estimates. The average trade estimate for yield is 177.7 bushels per acre, with estimates ranging from 173.2 to 182.1 bushels. That is a wide range, but most estimates are clustered around the average. I am not dismissing the range, but most corn yield estimates are looking for only a small decline of a bushel or less. For perspective, the lower end of the range is a month and a half old and based on the ProFarmer Tour estimate, while the upper end is StoneX’s October estimate of 182.1 bushels. Historically, the October USDA report can produce significant changes in yield compared with surrounding reports.
“The Quarterly Stocks Report found 173 million bushels more corn stocks than expected. Combined with a 57 million-bushel decrease from 2025 production, the adjustment represents a 230 million-bushel reduction in the old-crop balance sheet demand assumptions. The higher stocks were the symptom; the missing demand was the cause. This means any yield reductions in the upcoming USDA reports have a high probability of being at least partially offset by reductions in demand.
“To me, the focus of this report is the corn market and how USDA adjusts the moving parts between supply and demand. For soybeans, the range of trade estimates is also wide. The concern may not be the USDA report itself, but the size of the long positions in the market that could create a knee-jerk reaction. Seasonally, harvest lows tend to occur from the end of September into the beginning of October.”
— Matthew Pot, founder, Grain Perspectives, Inc.
ACTION: If WASDE causes a bullish reaction, consider taking off risk before the pendulum swings the other way.
Brady Huck, Empower Ag Trading
“Farmers will be hoping for friendlier news from the USDA on Oct. 9 than they received last week. The additional corn bushels from last week’s Grain Stocks report will go directly to the balance sheet and if we don't get a yield revision lower, the corn stocks-to-use ratio will climb from 9.7% a more comfortable 10.7%, based on average estimates.
“Some analysts are actually above the USDA on yield for both corn and soybeans, so producers have to be careful about their own biases here. Defend against what makes you have a bad day, such as lower prices for your unsold bushels, or a higher market move if you’re heavily sold. That determines what side you need to defend more aggressively.
“Also, look back at the market moves we've seen in the past. This market can move more than you think. In 2021-22, for example, March 2022 corn futures rallied over $1.75 from Oct. 1 through March 1, while in 2023-24, March 2024 corn sold off 80 cents in the same time frame.
— Brady Huck, principal and adviser, Empower Ag TradingACTION: Expected the unexpected, manage your cash position and brace for volatility.
David Whitcomb, Peak Trading Research
“The U.S. dollar is at its strongest level in 17 months, driven by elevated U.S. bond yields and the hawkish Federal Reserve. A stronger dollar is absolutely a headwind for U.S. ag exports because it makes dollar-denominated commodities more expensive and less competitive for global buyers. We’re still well below the dollar’s early-2025 highs, so I’d characterize this as a growing headwind, rather than a crisis, for U.S. export competitiveness.
“I wouldn’t blame the recent softness in corn and wheat exports entirely on dollar strength, but it’s coming after the disappointing Trump-Xi meeting, and it’s becoming another obstacle at a time when U.S. exporters are already competing aggressively for global demand. Upcoming inflation readings, including the Consumer Price Index, will be key to the dollar’s direction and the Fed’s next move. Bond markets are currently pricing roughly 20% odds of another hike this month, but that was around 70% early last week, so those probabilities are moving dramatically day to day.”
— David Whitcomb, head of research, commodity markets, Peak Trading Research
ACTION: Keep an eye on the dollar, U.S. interest rates and the September CPI inflation report on Oct. 14.
Matt Hansen, Growers Edge
“One thing farmers have some control over is their yields, which means making the right input and agronomic decisions every single opportunity you have. Over the summer, I visited several farmers in Illinois and Iowa where there had been heavy rains. The right decision for some of them was to spray fungicide and prevent yield impairment. For a 10,000-acre farmer, that might be a $300,000 to $400,000 decision, but it could lock in up to $2 million worth of incremental yield or prevented yield depletion. But some farmers are capital-constrained, and they just didn’t want to have to talk to their bank or have their credit file reopened.
“It’s important for farmers to know about and seek out options to overcome financial constraints tied to the traditional banking system and ultimately do the best thing for your crops. Ideally, you want your input decisions to be entirely agronomic and fluid, allowing for midseason flexibility and minimizing downside yield potential from things like the extreme heat or moisture like we saw this summer.”
— Matt Hansen, CEO, Growers Edge
ACTION: Seek out warranted products or demand product performance guarantees backed by a credible partner.
Chad Merrill, AccuWeather
“Iowa had its third-wettest September on record and the western part of the Corn Belt experienced one of its wettest Septembers. This followed a June-October period that ranked among the wettest top five for the heart of the Corn Belt. For the wettest areas, it may take about two weeks for things to fully dry out, especially since we’re in the time of the year where the sun angle is a little bit lower in the sky and the evaporation rates are a little bit lower.
“We’re now seeing conditions take a more favorable turn for harvesting. For the rest of October, we see temperatures trending above average and precipitation amounts generally near to below average, which means there will be more days to get out in the fields. We also have to be mindful of a brief heavy rain event crossing the Great Plains and Corn Belt during the middle of next week around Oct. 14-15, then a potential October frost that could impact crops around Oct. 16-17. The areas that got hit the hardest with rain this summer and early fall will likely escape flooding during this event. The cold snap that follows will likely be pretty brief, with the highest chances for colder-than-average temperatures in the eastern U.S. as opposed to the prime part of the Corn Belt.”
— Chad Merrill, senior meteorologist, AccuWeather
ACTION: Stay alert for a moderate frost event in the Corn Belt during the middle-to-latter part of next week.
Matt Wiegand, FuturesOne
“Trade has continued to consolidate the post-report range, with the sharp gains on Tuesday failing to extend on Wednesday heading toward the Oct. 9 WASDE report. With harvest opening up, we should see basis continue to fade as bushels come out along with potentially more clarity on yields, but increasing availability should boost ethanol and crush plants as well as allowing bushels to flow out into the export program in an expedited fashion. Outside markets will continue to provide a bit of an outsized influence with the action in the bond yields, along with the dollar making 18-month highs. The October WASDE has provided fireworks in some years with the jump in corn stocks to hang over the market until we get the next yield and carryout number, with the soybean number viewed as less likely to surprise.
“As we head into October, the biggest things to focus on will be seeing how your crop is coming out of the field with action still at the upper end of the range of opportunity to reward positive yield surprises across the scale. We continue to hold the upper end of the range for 2027, keeping the opportunity to establish early sales intact there. We have seen diesel futures ease significantly from the highs, which should filter into the retail level into mid-month for remaining harvest fuel needs.”
— Matt Weigand, risk management consultant, FuturesOne
ACTION: Look for opportunities to roll hedges or sell on-farm storage at a level that pays for the bins.
Nick Tsiolis, Farmer’s Keeper
“We're back on an uptrend after a tough week last week in the markets, and there's lots of reasons we could see $6 corn. What's important is keeping flexibility on the farm.
“We've got certain factors going on right now that don't make it advantageous to be sitting on physical corn where you could be protecting it on the board — if that fits your risk profile. We've got record-high diesel prices out there. We've got the cost of carry in general, which includes both diesel prices and interest rates. Plus, you have to factor in shrink, too, the cost of putting stuff in the bins, and in some cases, the cost of commercial storage. So, it's advantageous in that type of environment to sell a certain amount of grain here at harvest and put the money in your pocket. You can still protect yourself with various futures and options strategies that are out there and then be able to participate if the market goes back up. And if it doesn't, at least you made those sales and you've covered yourself. That's all about risk management.
“Basis is also very important. A lot of us saw some really high positive soybean bids right at the tail end of September as we did have a delayed harvest with all that rain and crushers with record-high crush margins that are competing against a pretty strong export market as well. That creates a really good recipe for farmers because they're going to compete to get your grain.
“Even though we've seen basis dive as we entered into harvest, we're still historically higher in terms of basis on a national average. Keep an eye out on that. Keep dialogue open with your local merchandiser because they're going to have needs that they need to fill as we have a slower harvest, especially if this persists and we keep having delays.”
— Nick Tsiolis, founder and CEO, Farmer’s KeeperACTION: Sell some grain. Pay attention to local basis.