Weekly Grain Market Update – 8/28/26

Weekly Change

CU26 +29'4

CZ26 +29

SX26 +46

WEEKLY GRAIN MARKET UPDATE

🌽 CORN

• December corn gained roughly 32¢ this week and traded above $5.20, reaching its highest level since July 2023. The contract has rallied nearly $1.00 from its June 30 low and approximately 65–70¢ since the August USDA report.

• The rally accelerated after the Pro Farmer Crop Tour estimated the national corn yield at 173.2 bu./acre. That is 7.5 bushels below USDA’s August estimate and would imply a crop near 15.344 billion bushels—almost 700 million bushels below USDA’s current projection.

• Pro Farmer has estimated below USDA’s August yield in 9 of the past 10 years, averaging 4.44 bu./acre lower. However, this year’s 7.5-bushel difference is the largest during that period, so the market will need harvest results to confirm such a large reduction.

• National corn ratings fell 3 points to 57% good-to-excellent, compared with 71% last year and the 61% five-year average. North Dakota fell to just 26% good-to-excellent, while smaller declines were reported across several other states.

• Weather remains supportive. Corn-producing areas received approximately 81% of normal rainfall last week, while the forecast called for only 66% of normal precipitation. Heat is also expected to return, helping crops move toward maturity but potentially trimming late-season yield potential.

• Demand remains a major source of support. The latest export report showed 42 million bushels of new-crop corn sales, while old-crop commitments are approximately 136 million bushels ahead of the pace needed to meet USDA’s forecast.

• The higher futures market has made U.S. corn more expensive than major competitors. Mexico remains an important and relatively dependable customer, but additional export growth could become more difficult if U.S. prices continue rising faster than South American offers.

• Brazil’s domestic corn demand continues to grow, especially from ethanol. Brazil is projected to produce 147.5 MMT of corn but consume 154.7 MMT in 2026/27, including 32.5 MMT for ethanol—14% more than last year. That could limit Brazil’s export availability.

• European production problems are also supportive. The EU reduced its usable corn-production estimate by 1.8 MMT to 50.1 MMT, a 19-year low, while increasing projected imports to 25 MMT.

• Funds have added significant long positions and helped drive the rally. That provides momentum, but it also increases the risk of sharp profit-taking corrections—especially after such a fast move going into harvest.

• The September 11 USDA report will be the next major test. USDA may not cut yield all the way to Pro Farmer’s 173.2, but even a move into the 175–176 range would tighten the balance sheet considerably.

• Bottom line: The corn outlook has improved substantially, but prices are now at profitable levels and roughly $1 above last year at this time. The crop may be shrinking, but it will still be large. This is a good environment to reward the rally on a portion of production while leaving some upside open if harvest results confirm lower yields.

🌱 SOYBEANS

• November soybean futures gained approximately 38¢ this week and approached their $12.565 contract high. The strength is especially notable because current estimates still point toward potentially record U.S. production.

• Pro Farmer estimated the national soybean yield at 53.3 bu./acre, compared with USDA’s 52.7. That would produce approximately 4.572 billion bushels—slightly more than 50 million bushels above USDA’s August projection.

• Soybean ratings declined 1 point to 60% good-to-excellent. That compares with 69% last year and the 62% five-year average. Illinois, Iowa, Minnesota, Wisconsin, Nebraska, Kansas and the Dakotas are generally rated below last year.

• August rain should help increase seed size in areas that received it, but coverage was uneven and some locations received excessive amounts. The market is still debating whether heavier seed weights can offset lower pod counts and weaker crop conditions.

• Chinese buying has returned and is currently the biggest bullish factor. New-crop sales have averaged approximately 63.1 million bushels per week recently, compared with 38.5 million during the same period last year.

• Flash sales continued throughout the week, with roughly 1.9 MMT of soybean sales reported since last Friday. Continued Chinese demand could tighten the soybean balance sheet even if the crop reaches current yield expectations.

• The longer-term demand picture still needs improvement. Old-crop commitments total approximately 1.541 billion bushels, which is 17% below last year. Recent Chinese purchases are encouraging, but the buying needs to continue rather than being a short-lived burst.

• Soybean oil remains an important risk. Expanded Small Refinery Exemptions could reduce demand for biodiesel credits and pressure soybean oil. Sustained weakness in oil would make it difficult for soybeans to continue rallying, regardless of export demand.

• Funds are carrying sizable long positions in soybeans, meal and oil. That can extend the rally when demand news is favorable, but it also leaves the market vulnerable to aggressive selling if Chinese purchases slow, soybean oil weakens or USDA raises its yield.

• Soybean spreads remain unusually firm despite expectations for a large harvest. That may reflect tight old-crop supplies, strong domestic crush demand and continued export sales, but spreads could weaken once harvest bushels begin filling the pipeline.

• Bottom line: Soybeans have a strong demand story developing, led by China, but they also face a potentially larger crop and uncertainty surrounding soybean oil policy. Continued Chinese buying could eventually support a move toward $13, but the combination of strong prices and heavy fund ownership makes volatility likely.