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Corn Outlook:
Escalation of the U.S.-Iran conflict, and increased fighting between Russia and Ukraine have been the factors fueling the rally in the grains and crude oil. Meanwhile, a dilemma may be brewing for President Trump as the mid-term elections are just over two months away with voters likely facing an uptick in inflation when they head to the polls. Currently, the polymarket odds are the Democrats will win both Congress and the Senate, which would derail Trump’s agenda should it happen. The question is; to preserve his legacy of lowering inflation, will he implement export restrictions like Russia did a few years ago? A similar situation happened in the cattle market, but it involved increasing imports. Meanwhile, corn harvest is underway in the southern areas of the Corn Belt with exceptional yields being reported. Export inspections last week, at 58.8 MB, exceeded those of the previous week.
Bean Outlook
Soybeans continue to be supported from optimism that China will fulfill their agreement to purchase 25 million tons, and ideas that hot conditions during August will cause the USDA to lower their yield estimate in the September report. So far, China has committed to purchases of 8.3 million tons. Last week, exports were disappointing with inspections of 9.2 MB. In the weeks ahead, when the Midwest harvest is winding down, the focus will be on weather and planting in Brazil. Currently, their production is expected to grow to 185.6 million tons for 2026-27.
Wheat Outlook:
Wheat ran into profit taking midweek even though the conflict between Ukraine and Russia has escalated and shows no end in sight. Although the U.S. is higher priced than our competitors, exports have picked up recently with inspections last week at 15.8 MB. To reach USDA’s projection of 775 MB, shipments must average 15.3 MB each week. Meanwhile, the harvest of the spring wheat crop is progressing at a fast pace and is 77 percent completed compared to 69 percent a year ago and 68 percent for the average.
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