September 28 – Market Commentary

The Week in Three Numbers

$30 billion - The amount of non-sensitive goods that could benefit both the U.S. and China with more favorable tariff treatment, according to the recommendation from the U.S.-China Board of Trade

99.11% - The percentage decrease in corn exports to China from 2024 to 2025, going from $561.5 million in 2024 to $5 million in 2025.

12.8 million - The number of barrels per day flowing out of the Middle East in September.

Markets

Volatility dominated the markets last week as the week closed with a slight improvement in corn, a new bold green in soybeans, and a fourth straight week of 10 cent drops in wheat.

I won't spend a ton of time dissecting the table as there's plenty of other news to get to. We saw bold reds roll off in corn, soybeans and wheat. Corn and wheat were former bold greens and will once again roll off this week, turning another former bold green into a new bold red. Live and feeder cattle have the opposite, with bold greens rolling off, and another set to roll off this week. The lack of greens on those two columns is upsetting to say the least. The fuels backed off after several straight weeks of setting highs. Crude, gasoline and diesel are all set to see new, higher, supports next week. Diesel will flip to a new trading month (November) this week, and despite its easing is still trading at an all-time high. On the finance side, the S&P 500 topped 7,700 again for the first time in three weeks, the U.S. 10-year Treasury set another high for the fourth consecutive week and the dollar index remains above 100.

After struggling throughout the week, corn ended up finishing the week stronger, closing up about a cent week over week. Wet across the Midwest, which is likely the cause of both the downside and upside in a couple of markets. There's been reports of soybeans germinating in the pods and some delays in corn harvest, thus leading to some additional strength. On the flip side, the rains are putting some downward pressure on the winter wheat market as we're seeing improving moisture for planting season.

Both corn and soybean harvest reports in the Corn Belt are better than expected. Looks like we're having highly variable fields across not only the Corn Belt, but Kansas as well.

The one-month chart shows the slight downward trend since we hit our highs back in the first week of September.

We closed the week sitting just below the 20-day moving average, keeping that bearish technical indicator still in place. It's worth remembering that as harvest continues throughout the country, this is also generally a time when we see downward pressure on the market. Look at the 20-year Dec. Corn Chart.

All those circles are the September-November time frame. It's possible we have further pullback, but that doesn't necessarily mean the long-term outlook is bearish.

Also, something fun to watch over the next couple of weeks - three reports ago I mentioned the small pattern the corn market had taken of going three straight weeks of highs, backing off for three weeks, then hitting three more weeks of highs. At that point, we'd backed off, and this is now the third week of that. It'll be quite interesting to see if we close this week on a new high once again.

Especially after what we saw this morning.

The corn market was volatile all last week ahead of the Trump-Xi meeting. Then, Friday morning we got a headline saying there'd been an agreement. Corn shot from 514 all the way up to 529 before settling in 528. Here's the statement from Ambassador Jamieson Greer:

"As a direct result of the strong relationship between President Trump and President Xi, the United States and China, under the auspices of the new Board of Trade, have recommended $30 billion of trade in non-sensitive goods on each side that could benefit from more favorable tariff treatment in the future," said Ambassador Greer. "From agricultural products to medical devices, President Trump is unlocking improved market access for about 30 percent of U.S. exports to China, while benefiting consumers with imports from China of household goods, toys, and other products that the United States generally does not import from other countries. The Trump Administration will continue to pursue fair, balanced, and reciprocal trade with China by ensuring compliance with commitments on agricultural and energy purchases, pursuing balanced trade in non-sensitive goods, and securing market access for American farmers, manufacturers, businesses, and workers."

This morning, China released a list of products that will receive a U.S.-specific reduction in tariffs, including wheat, corn, sorghum and beef, but not including soybeans. Soybeans dropped precipitously in reaction to the news, pulling down corn and wheat with it. Seems like keeping soybean tariffs as a bargaining chip for future negotiations that are expected to take place on international security.

The market chose not to take the inclusion of wheat and corn on the list. But it could be temporary as the reduction in tariffs could easily lead to additional purchases of corn and wheat by private buyers in China. This makes it significantly more likely that corn and wheat will both be a part of the $17 billion in agricultural purchases announced by the White House back in May.

That would be a huge boon to corn trade. China bought just $5 million worth of U.S. corn in 2025, down from over $550 million in 2024. Similarly, wheat dropped to nearly zero shipments to China in 2025, compared with 1.9 million metric tons in 2024.

This should be especially beneficial for wheat, as it's lost about a dollar since setting highs at the end of August.

Wheat broke through the floor set in mid-August this week. But we've got a triple bottom at around the $7.14 level, so we should see some support. Unfortunately, that's still about 30 cents away. News from China could certainly help prevent us from hitting that.

Oil exports from the Middle East rose to 12.8 million bpd in September, the highest level since the war in Iran began back in February. This has helped fuel prices come down a little, but overall, diesel stocks are low globally and winter is generally the time of greatest demand, so we are likely looking at high diesel prices for a while, even after things get "fixed." Which to me, begs the question, why are politicians not saying the word capacity?

Then, there's this from Morgan Stanley that I'll just leave here.

"… about the U.S. diesel export ban, there is a good reason that this has not happened yet. Because the United States is broadly balanced in gasoline, domestic production of gasoline by the refiners is broadly equal to domestic demand. There is a little bit of exports but in the overall scheme of things it's not much. In diesel, it is a very large surplus which is exported. But if there were to be an export ban, and that diesel can not leave the country, for a little bit you can store it but you'd fill up those tanks very very quickly. When those tanks are full, you then need to slow down the refineries, because otherwise you simply have diesel you can't get rid of. When you slow down the refineries … the mix of products that you produce is broadly fixed. So, if you slow down the refineries, you get less gasoline. So, in the United States, you can get the counterintuitive outcome that an export ban could increase gas prices."

I'm by no means an expert in the energy markets but as I've been listening and reading through the markets, there's been a theme of suggestions to watch spring futures prices on diesel. March diesel is currently trading around 50 cents cheaper than November. It may be worth talking with your fuel supplier to lock in prices for the spring.

On the demand side, USDA released a series of reports last week. September hogs and pigs saw an increase in all hogs and pigs to 74.3 million head, down 2% from September but up 2% from June. Poultry saw increases as well, with egg production up 1% year-over-year, layers up 5% year-over-year, and broilers up to 1.21 billion. A strong week of exports also pulled us to even on the USDA's trade forecast while ethanol production dipped slightly. September ethanol production is trending toward being less on the month than August.

It's supposed to be a wet week, especially in Kansas.

This should only further add to the top- and subsoil moisture levels that saw a marked improvement last week.

It will also likely slow down a harvest that is ahead of schedule already.

And unfortunately, that additional precipitation probably only leads to further deterioration of a crop that needs to get out of the field. Which is likely why we saw a slight decrease in the crop condition in Kansas.

Meanwhile, temperatures are finally near normal in Kansas and most of the Midwest.

Looking Ahead

The September stock report releases this week. The market doesn't seem to believe any big changes are coming, but this is the report that can update last year's numbers, we could see some changes in this year's projections. When you don't believe change is coming, change generally surprises you and with attention now shifting toward the size of the 2026 crop, an unexpected old-crop stocks number could give the market something new to trade.

Stay Safe!