Top Tips on a Thursday
In recent sessions, corn has quietly shown some resilience even as funds have unwound bearish bets, while soybeans have ridden a wave of Chinese demand that’s helping offset shaky fundamentals elsewhere.
Wheat has a harder lane to travel, haunted by cheap Russian supplies and lagging U.S. exports. Fold in USDA’s September corn correction, higher diesel costs and more, and farmers have plenty to watch heading into November.
This edition of Top Tips looks at the latest round of market volatility as our experts try to distinguish what is just a cheap scare versus what factors should actually be concerning.
- Soybeans ride strong Chinese demand while a softening Brazilian Real caps that upside.
- USDA’s September corn correction: Why one adviser says it builds, not costs, credibility.
- Plus: New fertilizer futures launch — here’s why farmers should pay attention, even if they don’t trade.
Jon Scheve, Scheve Grain
“Some may argue USDA’s corrections to its September corn estimates wrecks its credibility, but I would argue it does the complete opposite. It shows the USDA is willing to admit they make a mistake, and they take action to correct it as soon as they can. While this mistake was bearish for corn producers this time, that doesn’t mean that in the future there won’t be a bullish one. It’s import to remember the corrections were only for the September report. USDA left its October numbers unchanged, which means all of the information was in the marketplace already.
“At this point, the corn market is down about $1 per bushel from the highs, with much of the decline due to heavy fund selling. Prices are substantially lower than I expected, but it’s still the middle of harvest. Until at least 80% of the corn crop has been harvested, it will be difficult for prices to rally much. With ARC, PLC and diesel relief payments coming, those checks should help keep farmers’ cash flow strong enough to wait and see if there is a postharvest rally they can sell into.”
— Jon Scheve, adviser and owner, Scheve Grain
ACTION: For now, sit on the sidelines and wait out this market correction.
Chase Koopmans, The Grain Ledger Rundown
“Despite the weakness in soybeans and wheat on Wednesday, corn quietly had a good day. December futures closing back above $4.50 while wheat falls 11 cents is exactly the kind of resilience I want to see if this market is trying to carve a bottom. Factor in funds buying instead of selling, and it lines up with what I’ve been thinking: The heavy selling in corn is mostly spent.
“I’m staying honest about the other markets. Soybeans are still on shaky ground: The funds are loaded long, bean oil is dragging, and November futures slipped under $12.30. The one bullish card I’m watching closest on beans is El Niño over Brazil, and that’s a real wild card. Also, the Fed didn’t do us any favors, with hawkish stance keeping the dollar firm. Summing up, I’m patient and protected, same as I’ve been. Corn’s acting right. The rest needs proof.”
— Chase Koopmans, writer, The Grain Ledger Rundown
ACTION: Until corn clears $4.60, treat bounces as bounces, not a new uptrend. Lean on protection and don’t chase it lower.
Ethan Ongstad, MIAX Futures
“Earlier this month, our exchange successfully launched four physically — settled fertilizer futures contracts based on New Orleans — delivered urea, monoammonium phosphate, diammonium phosphate and potassium chloride. We started this process after a number of large customers came to us and saw the need for risk management tools for the fertilizer industry. We didn’t know at the time that two years later we’d be in an environment where geopolitical events, production and shipping disruptions, etc., are creating so much price uncertainty.
“Importers, distributors and retailers are the initial primary focus of these contracts, the participants who are naturally long or naturally short and need a risk management tool to help hedge their exposure to the underlying market.
“Farmers may not be inclined to trade futures, but they can still benefit. I think the biggest benefit would be having price certainty along the forward curve, knowing where fertilizer prices may be months down the road, similar to how corn and soybean futures prices are used. In the fall, farmers can get an indication of where fertilizer prices may be next spring, and that can help with budgeting and planting decisions and assessing risks. The recent volatility really makes a risk management tool much more important to a wider audience.”
— Ethan Ongstad, president, MIAX Futures
ACTION: Watch volume, open interest and price trends in MIAX fertilizer futures (tickers MGU, MAP, DAP and MOP) for a sense of price trends in 2027 and beyond.
Chad Merrill, AccuWeather
“There’s probably another five or six days left of some extended dry weather. So hopefully, the farmers are getting out in the field before we start to see some weather systems, some storm systems that come into California in the Southwest and push some more moisture across parts of the region. And we’re talking the timeframe from about Nov. 7 to Nov. 10 is when the weather pattern should start to pick up again.
“If there’s any good news, though, is that a good bit of those storms will be heading across the Central and Southern Plains, and there will be some opportunities across the Corn Belt for some dry weather in November. But they’re still going to get clipped by some of these storm systems that are coming through from west to east. So, the gap is closing a bit.
“For winter wheat, you don’t want to see those really cold days with very little snow on the ground. That’s very detrimental to the winter wheat. What we’re looking at going forward to the winter season is a very robust subtropical jet stream that’s going to be pushing across the southern tier of the United States. And what we’re setting ourselves up for is quite a bit of rain, quite a bit of thunderstorm activity, once you get into Oklahoma and Texas. But once you get north and west of there, there’s going to be a storm track that cuts up through the middle part of the Mississippi Valley, so like St. Louis area, west of St. Louis, west of Kansas City. In that zone, we’re looking at a decent amount of snow this winter, especially January and February. That storm track is going to allow for a good bit of moisture to come up, which we desperately need for the drought.
“We’re going to see some drought improvement. We’re also going to see some snow — covered fields, especially in January and February. That being said, we don’t see any bitterly cold Arctic air masses that are going to settle into any part of the United States this winter. When we get the moisture, we’re going to get the snow, and snow should stay on the ground for quite a bit because of the series of storms that come up through there.
“And we’re not going to have extended periods of bitterly cold temperatures. Where our temperatures are going to come below average is the fact that we have cloud cover and we’ll have precipitation keeping those temperatures down during the day. But at night, we’re not looking for any bitterly cold weather. So, I think that’ll help with the wheat.”
— Chad Merrill, senior meteorologist, AccuWeather
ACTION: Get the crops out of the field. Prepare for a strong growing season for wheat.
David Widmar, Agricultural Economic Insights
“When do good marketing plans lose their edge? Higher diesel prices have added 10 cents per bushel to the cost of hauling grain 30 miles. Prevailing interest rates and commodity prices have pushed the opportunity cost of storing grain to historically high levels.
“All marketing plans involve assumptions. Even the best plans can fall apart when seemingly minor assumptions are stressed by dramatic changes in conditions. For instance, there is likely a combination of diesel prices and interest rates that makes your once-sound plan of storing and hauling grain across the county unappealing. Success is often not about creating perfect plans but recognizing when a great plan is no longer great.”
— David Widmar, ag economist, Agricultural Economic Insights
ACTION: Review how fuel costs, interest rates, and cash basis fit into your current grain marketing plans. As you plan for 2027, identify one or two assumptions that, if proven wrong, could undermine your strategy.
Andrew McCarty, Pluto Commodities
“Corn is still trying to work through the bigger supply picture USDA handed us, and while demand has improved at times, exports are still well behind last year. Soybeans continue to have the best demand story, helped by stronger Chinese buying, but a weaker Brazilian real and the potential for another large South American crop are keeping a lid on the upside. Wheat remains the weakest of the three as U.S. exports lag and cheap Russian grain continues to undercut us globally. Overall, the market has shifted away from harvest pressure being the only story to now we need demand to prove it can chew through these supplies.
“Avoid panic-selling weakness, but use meaningful rallies to make incremental sales. Also keep an eye on 2027 acreage expectations as the corn-soybean price relationship shifts, which could eventually matter for next year’s corn balance sheet.”
— Andrew McCarty, founder and president, Pluto Commodities
ACTION: Watch corn demand, continued Chinese soybean buying and whether basis improves as harvest winds down.
Chris Swift, Swift Trading Co.
“USDA reports showed significant confliction between their forecast and private. This led to a liquidation of longs for which the funds had built a sizable position. The next few weeks will wrap up harvest, with preparations towards the holidays. Farmer selling should dry up and there are enough discrepancies to suggest revisions to take place in forthcoming USDA reports.
“Although easier said than done, fixing variable input costs for next year can offer bottom-line certainty of price. Energy is the main driver of inflation, and especially farm inflation with diesel fuel prices. Recommendations to keep farm tanks topped off have been beneficial, but attempting to book next year’s fuel, at historic levels, leaves a lot of room for error. Due to a belief current events are a disruption in production, and not a shortage of crude oil, one could explore booking diesel fuel on a cash contract, and owning put options in crude oil, were there to be a resolve in military actions.”
— Chris Swift, founder, Swift Trading Co.
ACTION: Pencil to paper will always help in the decision-making process.
Luiz Roque, Hedgepoint Global Markets
“The presidential elections in Brazil have once again brought attention to an important factor in the grain market: the exchange rate between the Brazilian real and the U.S. dollar. The strong devaluation of the Brazilian real following President Lula’s reelection in Brazil is beginning to make U.S. products less competitive compared to Brazilian products in the international market. And this is happening just as the new U.S. soybean and corn crop is coming onto the market, when much of the international demand shifts from South America to North America.
“Given this, we may see, to some extent, lower demand for U.S. soybeans and corn, with buyers taking advantage of Brazil’s more competitive prices (if the Brazilian real remains devalued). We believe that the current devaluation of the Brazilian currency may persist for quite some time, given that the current, reelected government faces major fiscal problems to resolve — problems that were largely created by the government itself.
“Therefore, it is essential for the soybean and corn markets to monitor developments in Brazil’s economic issues and their impact on the exchange rate, as competitiveness and trade flows may be affected by this.
“On the production side, planting of the new Brazilian soybean crop is progressing at a good pace, and the weather, so far, has been quite favorable for crop development. At this time, there are no issues with the Brazilian crop, which is on track to be a bumper, record crop. However, forecasts for November, December and January point to a more pronounced El Niño pattern, with below-average rainfall in the Center-North region. If rainfall begins to decrease in the coming weeks, we may start to see problems with crop development in key producing states, which could trigger speculative movements in Chicago.”
— Luiz Roque, market intelligence coordinator, Hedgepoint Global Markets
ACTION: Pay even closer attention regarding South American weather, which could bring decisive market changes in November, December and January.