Really kinda threw a curveball into the market.

It really did, Jamie, and record volume on Friday in terms of corn, uh, not only on a one-minute basis when we traded forty-five thousand contracts right after the report, but also for the day at one point two million.

So very, very big day.

Today, much more passive.

Uh, we are seeing a lot of end user pricing for whatever reason, whether they're cattle, uh, or in the ethanol business, a lot of pricing on the break that has been supportive of the market.

And then on the soybean market, we're hoping that China comes back and, uh, from their holiday as they did last week and then buys US soybeans.

Of course, USDA is closed today for the Columbus Day off.

We had hogs up, cattle pretty much staying lower today.

Any insight into what could come out of that meeting for agriculture?

Well, our hope is that the Chinese, there's been a lot of talk in the markets about deliverables, right, Tammy? So in my mind, I hope the Chinese deliver.

And when I say that, we think back to, of course, the 25 million metric tons that the Chinese have pledged back in the Bouchon Agreement.

That, of course, is extended now by two months, according to Secretary of Treasury Besant.

As I think about it, I do believe the Chinese will buy that 25 million metric tons.

But more importantly, as we go back to the May meetings in Beijing, and there the Chinese supposedly pledged to buy $17 billion of U.S. agricultural goods on a prorated basis.

Our research at AgResource says that that's about $14 billion, of which China may have bought about $3.5 billion already.

So how successful has the U.S. been that you've seen in making up any lost ground with other overseas markets? Are we kind of finding other places to sell?

But was the market disappointed with that?

I think the headlines, so we gotta understand that algos and AI trading systems read headlines and they were disappointed by that, right? We're only gonna get a two month extension.

The Chinese did want a year extension, but the US said, no, we want you, the Chinese to adhere to your commitments before we're willing to go longer.

And so where this really came down is China's doing relatively well on buying its 25 million metric tons of U.S. soybeans.

By our count, we're at about 15 million metric tons today.

But where the Chinese are falling short on is they've only bought $4 billion of what we believe is a prorated amount of $14 billion on their additional ag commodities, which was agreed to back in May for the Chinese to have a tariff rate no more than 20%.

So I think the U.S. is pushing China to spend that last bit of money, Michelle.

The $4 billion that Jamison Greer said that China had already bought, what is that made up of? I mean, we're hearing that it might be forestry product, but corn is not on the table, right?

We're below 10% stocks to use ratio now on corn, aren't we?

Yeah, that's right.

And that 10% level is very important.

It does open up the market to upside potential.

And so with a 9.7% stocks to use ratio, the corn market seems to be fairly valued somewhere in the vicinity of 550 to 525 a bushel.

That's approximately where we're at.

But again, it doesn't take much of a decline, whether it's in yield or an increase in demand, that we could stair-step this market to $6.00. I'm kind of a $6 guy by t That hasn't changed much kind of solidified that in And Dan soybean yield ac per acre.

We did see pr that more profit taking? contract ties or was the we didn't see a yield cu

What price do you think we need to be at in corn with that in mind?

Well, I think we're fairly priced here at 525 to 550.

But if I am correct in our U.S. corn yield really is 176.

I still think we could drop two and a half bushels by the final.

That's based on declining earweights going forward.

There's a very strong historical that earweights, excuse me, ear numbers drop from here through November.

So if that's indeed the c drop will give us a lowe I also believe that the m in both corn and wheat ha in there in terms of the p the declines due to the w all plays out.

Do you continue to see this market recovering?

What do you make of it, Dan?

Well, you know, I would tell USDA that, and we were approached early on from their committee that's headed by KIPP, of course, as you know.

I think they came up with a solution.

I think that using NVDI or satellites and doing it frequently would help the market.

but i don't think there's any replacement i still don't think satellites can measure ear length can measure girth can measure you know exactly anything other than the nvdi or what the health of vegetation really is so it's a tool in the box to me i still will rely on nasa i believe they do the best job as you did on the on the crop tour And I always say that, but the reason that NAS data maybe hasn't been as good as some would like is because the farmer hasn't been reporting as well as he should have.

And so if you're only going to get 30% of the farmers reporting, you only get data that's that good.

So I encourage all farmers, report your yields, report consistency.

Are you in that

But Dan, what could spook the funds?

Well, there's always something called China, right? They are having a summit with Trump on the 24th of September.

We think things will go well.

If you look back at this week, China was not included in the sanctions relative to Iran.

That's something that was a tip of the hat economically to the Chinese.

And so with that in mind, they keep buying U.S. soybeans.

They are down in Brazil buying corn, about 2 million metric tons.

Do you think cattle can still retest the highs?

They maybe didn't use, uh, some of the methods that others are using, but did you think that was reasonable, 180.7?

Yeah, y- you know, for me, it's a, it's a place to start, and I think that's where we wanna, uh, talk about this.

I, you know, I look at the Iowa corn yield at 208, and then I look at the soybean yield being down, and that doesn't make a lot of sense to me.

Uh, but in terms of where the USDA came forward, I think cutting corn yield across the Western US, uh, which is what they did, made a lot of sense.

You start in North Dakota, and you cut yield all the way down to Texas, and then you branch it in a little bit to Minnesota, and then you, of course, we include the Southeast, the Carolinas, and some of those states.

Uh, if we add those together, then I think that USDA corn number at 180.7 is close.

I've been at 181 for maybe three, four weeks now, and I thought that was, uh, you know, a place to be, but I'm not, I'm not gonna throw any stones at NASS, uh, based on that number.

So let's talk about demand and- Where are we gonna pick up demand? Is it gonna be because of the EU drought, or where do you see demand going here as we head into '27?

Is it significant? Does it matter to you?

you?It does.

I mean, at this time of the year, it's one of the largest that we can find over the past several decades.

Uh, it takes, uh, our yield model that I run relative to conditions, rainfall, and, and temperature now down to about 179 to 180 bushels an acre.

I haven't cut that far yet, but it is the- in that level.

And so when you stand back from it all, I think it's reflective of what Mother Nature gave us.

And, uh, you know, uh, uh, places like Colorado, North Carolina, good to- I mean, poor or very poor, 41% of those crops are rated in that regards.

Um, is, is, is there, is there re- is there reason to have the sa- a similar feeling about beans?

What does this week's trade tell you about the marketplace? Anything in particular?

Well, we scored new highs in the soybean market, new contract highs relative to November beans.

We did the same in wheat.

Uh, it's highly unusual at this time of year, and when I go back and look at the times that we've scored new July highs, it usually means that that trend persists at least into the first quarter of next year.

So we think we have some, uh, bullishness, if you will, that will last.

Uh, breaks will be well supported.

I need to get beyond the August crop report to get finality to acreage numbers.

We're probably gonna need the corn and the soybeans." Um, m- but they've been dealing with much lower prices.

And Dwayne, grain's a little disappointing with the big rally on Thursday and kind of a lack of follow-through buying on Friday, right?

It was maybe just a little bit disappointing, but I really did like that trade action on Thursday.

I don't know if you can technically call them key reversals, but they were nice reversals in my eyes and a nice bullish trade action coming off these lows.

And why not, Michelle? We're getting down to levels where farmers aren't going to sell, and I'm okay to get out of some hedges and take the risk back on.

How explosive do you think this week could be here? Like we said, in a month and in the quarter and the report plus first notice day, you had a lot of things going.

Yeah, no, this is one of those fun weeks for me.

I kind of geek out with USDA reports and volatility, and this is a big report.

You know, we argue about yield all year long, but honestly, it's acres that really can move the needle as far as supply and demand.

But is wheat starting to see some harvest pressure?

Yeah, wheat is seeing harvest pressure.

We are in the gut slot of harvest.

If you think about it, we're going to be about 53, 54% done by Sunday.

We're seeing movement over the scales.

And so that's got the wheat market coming under pressure.

A little bit of technical selling followed through.

Is it just because we're waiting for China purchases or the month-end reports?

So is this hedge pressure?

It is, we're in the gut slot of harvest in the central US.

We're seeing movement over the scales.

It's giving some pressure on the wheat market.

Funds are still adding to their short position, but we're getting very close to something I call a narrowing of the spread relative to French wheat prices.

French SRW wheat relative somewhere around 15 cents think we need to drop und and again, remember becaus the U. S.

Cannot become co marketplace.

So the fact that we've been ignoring the worsening EU drought and the heat there, you think it's only a matter of time before we have to acknowledge that in this market?

okay all right gotcha um what did you make of the debut of kevin warsh as the head of the federal reserve

well i i liked it though i always like a little more visibility as an economist i must be honest with you the dot plot is something i got to be a liking in my last few years and so i do believe the market's giving us an idea we will raise interest rates at least one time yet this year but I don't think this easy money Kevin scenario is what we are going to see.

I think Warsh is going to be very pro-interest rates and trying to batter down inflation.

So I don't think that's a lot different from the one Fed chair we had in Powell.

I think he kind of follows in his footsteps, but again, with less clarity in terms of what the future looks like.

Can we get the market back up to that mid-May level?

I got to tell you, I became more bullish with the onset of $17 billion from China.

I know the market had the break as we kind of cleaned house on war bets and speculative length, and I think now that we're short, the corn market will find some footing.

What's your take on what has come from the U.S.-China summit and where we go from here in the market trade, Dan?

Yeah, I think the United States and China, from what I'm being told at high levels, is still working out the Board of Trade.

So the Board of Trade is kind of like a clearinghouse or a mechanism that parties will meet either monthly or bimonthly to make sure that they're following through on what the purchase commitments are supposed to be.

So that being 25 million metric tons of soybeans by the end of the calendar year, that's a purchase, not a shipment thing.

And then if you think about the $17 billion also coming again, prorated this year, but then $17 billion each year, kind of adds up to $29 to $30 billion in our work each calendar year.

So that's the sizable boost for U.S. ag demand.

I think as you stand back from it, they're working out the details.

I'm wondering if there's any correlations, anything there that we need to keep our eyes on, Dan?

So what do we know?

So, you know, they're, it's not that they're doubting, uh, Tine.

I think the que- the, the point is we want details, and, uh, the markets are, are never patient, right? And so ahead of them, uh, we still have this thing called a war that's ongoing with Iran, and there was news late week about maybe the possibility of some kind of peace accord.

That, uh, would always cause the war trade unwind.

And along with that, we've got a relatively good start for crops, so they went in the ground easy.

Uh, we're now turning the calendar to June, and, uh, uh, things look relatively good, at least at this point, excluding the Western Plains, where it's still so dry and there's a wheat problem.

So the market's struggling, if you will, with this, uh, idea of I got a crop in the ground and, uh, farmers need to sell some old crop, along with we've got this new potential shiny thing called China and better demand and, uh, something that looks like the phase one agreement.

Is that typical?

While there are no specifics of the $17 billion of US ag buys above their soybean commitments, one analyst expects China to buy around $3 billion of US dairy and beef exports and $14 billion of other products, with corn topping the list.

A metric ton of corn today costs about $225 million.

10 million metric tons, or about 400 million bushels round terms, would be about 2.5 billion, and I think that's a fair number to think about what China may take this year.

If you look at wheat, it's about $275 million a metric ton.

A- again, I'm not sure the US has a lot of wheat to sell.

Instead, China will acknowledge it through lower tariffs, which he thinks was agreed to.

I believe once you get China dropping its import tariffs, today there's 15% on grains, 10% on soybeans.

Once those come down, I do think we could open the market for some purchases rather quickly.

Right, Dan, we did see after a lot of losses early in the week, the grain trade did try to bounce kind of with crude oil, didn't it?

It really did.

Uh, we came into the beginning of the week with a rally on Monday, and then we had, of course, the MOU, I call it mutual letter of understanding, that Trump proposed to the Iranians.

Uh, we then broke on that, expecting that maybe we'd get the Strait of Hormuz open.

Uh, that r- Iran has not a- at least responded at this point.

We expect they will maybe over the weekend, but again, it probably won't be a yes or no. It'll probably be a maybe with conditions.

And so we'll see how that all goes.

Is that a concern?

We tried to bounce a little bit on Friday just following crude oil, but we've been getting chopped up, right?

Yeah, it's been a very choppy trade as headlines have been all over the place.

We came into the week with crude oil sharply higher, thinking that the blockade that was on from the United States and, of course, also by Iran was going to be long live.

And the market was even looking and saying that that blockade of the Strait of Hormuz may last to the end of summer.

Grains and a lot of commodities added, if you will, war premium because of that.

and then we saw a mutual letter of understanding a one-pager by president trump to the iranians trying to find a way to open the straight and maybe get to a 30-day negotiations over iran's nuclear ambitions that gave the market a drop if you will and then on friday as tensions started to come back up as the u.s attacked a few tankers the market added more premiums so in my mind war is still the big factor in grain trade we'll see how the next week plays out but Next week, there's a lot of other information.

So we are looking at volatile trade probably through the U.S.-Chinese summit on the 15th.

What about new crop? Does USDA stick with trendline yields on corn and beans? And what do they use for China demand on exports?

Lots of fun buying across the complex.

It really did.

It was one of those fun days to be a trader, 'cause everything was green.

Cattle complex was green.

Grains were green.

Even wheat was higher, too, after it started a little bit negative on some rains, but then worked higher.

So felt like just funds coming in buying a lot of it, which surprised me a little bit, 'cause the commitment of traders report showed that funds are nearly record long when you combine soybeans, soybean oil, and soybean meal, all the products together.

Are we in a weather market there? Is that what, is that what is pushing it?