Soybeans are extending yesterday’s strong performance, corn is working on a rebound, and wheat is trading with mixed direction. The surprise cut to the U.S. soybean stocks-to-use ratio was the primary source of yesterday’s strength, as tighter new-crop inventories will require rationing. Any further production downgrade at this stage would only intensify that situation. (Per yesterday afternoon’s video, November soybeans have rallied to a major resistance point in the 1044-1046 range. It’s a Fibonacci target and plugging a gap on the chart.)

The biggest surprise came from the corn side of the report, with the USDA increasing the national yield by 7.8 bushels per acre and adding 2 million acres back into the harvested area estimate. This lifted the projected U.S. corn yield to 188.8 bpa. It’s important to note that these figures were based on satellite imagery and survey results, which historically can be less dependable than actual field measurements. Early boots-on-the-ground reports are painting a different picture, describing this year’s corn as good but not exceptional. Despite yesterday’s significant price swings, open interest changes were minimal.

With the WASDE report now behind us, market attention will shift quickly toward actual harvest results for price direction. Southern harvest activity is underway, and yield reports will soon begin to surface. U.S. export demand remains firm, helping to counter some of the bearish weight from the larger corn crop outlook. Outside markets are also playing a role, record highs in equity indices are pulling managed money toward financials and away from commodities, which could cap upside potential until capital flows return to the ag space.

Yesterday, US Treasury Secretary Bessent stated that there will be no nearby face-to-face meetings with his Chinese counterparts, which could take 2-3 months now. Substantial progress on any trade deal is likely in late October into November. Most anticipate that no beans be bought until then, but the Chinese may surprise us with goodwill buying to soften the trade deal. This would become a major surprise and add more fire to the market if they choose to buy some of our beans now, before they could possibly become more expensive.

Yesterday was an explosive day in live and feeder cattle as the recovery of losses from last Friday continued. The feeder cash index bolted to a new record high of $342.69 yesterday, and feeder cattle got into action. Also, box beef prices had a phenomenal day, with afternoon cutout values showing choice jumping $9.06 to $390.58, while select was also higher by $6.03 at $365.64.

Yesterday’s August WASDE numbers lowered Q3 and Q4 beef production estimates while sharply raising their quarterly average price forecast. They now have Q3 cattle priced at $238, and Q4 is increased to $240. This makes sense, as prices in the third and fourth quarters are generally higher than values reflected in August. The only thing that would dramatically change the downside would be a Black Swan event that is not known at this time.