September 8 – Market Commentary

THIS WEEK IN NUMBERS

by Taylor Wiliamson, Kansas Corn Director of Policy and Economics

51.33 million - The number of bushels short of the 25/26 WASDE export predictions according to Thursday's weekly export sales report.

$4.14 - The national average gasoline price projected for Labor Day weekend by AAA.

$5.49 - The 52-week high December corn has bounced against twice this week.

Markets

Without new information to trade on, corn effectively moved laterally this week and closed a quarter penny higher than last week while also setting a new 52-week high.

Despite the lateral closing, the market tested the $5.50 level twice without breaking through, establishing it as a potential area of resistance. Part of the issue has been the wheat market's struggles. We'll get to that in a minute. Regardless, the market may need some new bullish information to push through it.

If it does break through $5.50 and hold, that could be a potential support level on any pullback. Luckily, despite this week being a short trading week with the holiday, we'll get a couple of reports that deliver new information.

One thing to keep in mind - we hit record long fund position on Tuesday last week. CFTC reports on futures and options showed 430,000 long positions, which historically has shown a decent opportunity for row crop producers.

Soybeans are reading a similar story, despite closing over twenty cents higher.

Continued Chinese demand helped the market close higher, unlike corn. However, they'll also need to overcome a slight double-bounce ceiling at around the $13.13 mark.

Wheat dropped off more than forty cents after setting a new 52-week high on additional news. Ukraine's President Volodymyr Zelensky made comments throughout the week that he and Russia would sit down soon to try to find a way to get grain out from both countries. Russia initially rejected the idea but then recounted that and said a truce and increased exports are possible.

Positive news out of eastern Europe didn't translate to the Middle East as crude hit 52-week highs. That translated to dollars in the gas tank as it took RBOB gasoline with it, which eclipsed its previous 52-week high by over twenty cents. AAA released an article Thursday of last week highlighting how expensive gas is.

National average on Thursday was $4.14 compared to $4.09 the previous month and $3.19 the previous year. This negatively impacted demand, as daily consumption dropped by nearly 100,000 gallons from the previous week.

Luckily, AAA lists Kansas as among the 10 least expensive gasoline markets with an average of $3.78.

The hope is that we're nearing peak crude prices, at least according to the White House. Two U.S. officials told CNN that on Tuesday 40 commercial ships carrying some 18 million barrels moved through the Strait of Hormuz under U.S. military escort - a wartime record. Compare that to roughly 100 ships per day carrying about 20 million barrels of oil. Combine that with the Secretary of Energy's visit to Caracas, Venezuela, to showcase oil and gas pacts and maybe they're right.

As we're going into harvest and using a lot more fuel these prices are a real challenge. But besides that, the impact on fertilizer has been substantial as well, with several nights of $30 raises in the price of urea. The oil market has, alongside the bearish wheat market, really impacted the corn market as well.

Good news or bad news next? Let's get the rest of the bad news out of the way and then end on a positive(ish) note.

USDA released their forecast for net farm income this week and, as you can imagine, they projected a 2.6% decline from 2025, 5.5% after adjusting for inflation.

However, on the flip side, according to Purdue University's Ag Economy Barometer which polls farmers for their outlook on the economy, farmer sentiment improved for the second month in a row, and for the first time since June 2025, expect their operation to be better off financially than worse off a year from now.

Maybe that's because of these higher prices, which, coincidentally, started a couple months ago.

Now for some more good news.

Demand for corn continues to hold steady. Partially thanks to the increased oil prices, ethanol production increased for the fourth week in a row in the last week of August. Ethanol production is lagged by about a week and a half but it's still good production numbers. This coincided with the USDA increasing its forecast for FY26 ethanol export values in their quarterly U.S. Ag Trade report and expects continuation of growth into FY27. The agency forecasts ethanol export value to rise nearly 6% from their forecast in May. Meanwhile, the USDA reported on Monday that U.S. ethanol plants used 475 million bushels of corn in July, up 2% from June and 4% from last July.

On the crop progress side, somehow we've gotten both better and worse? The Very Poor-Poor increased by nearly 6 points while excellent also increased by a point.

That to me says the places where the corn looks good are getting better but the places where it looks bad are getting worse.

Likewise on soil moisture.

We see an increase in soil moisture surplus while also increases in the short and very short.

This weeks forecasts should help things a bit as temperatures are expected to be slightly cooler after the past few blistering weeks across the Midwest, which is welcome change for me after being at that K-State football game Saturday. Unfortunately, that probably only means low- to mid-nineties instead of triple digits.

And that should come with some much-needed precipitation, especially across the corn belt (sorry Western Kansas, I know that's a really nasty green hole right there).

Looking Ahead

It's a shortened trading week but the September WASDE report comes out Friday. That will be our first look at what USDA thinks about the ProFarmer estimates the market has been trading on.

That report may not be all sunshine and roses, however. If the oil and wheat markets continue to suppress corn trading, and the USDA believes ProFarmer is too low and either keeps supply high or reduces demand, there is some real downside risk this week.

With the shortened week, and the WASDE report Friday, I'd guess this week will have a lot of movement and volatility in the market.

Stay safe out there!