A firmer row crop pricing overnight, as the Pro Farmer tour continues to find disappointing yields.
Grain Overview
The Pro Farmer Crop Tour rolled into Indiana and Nebraska yesterday as it works toward the center of the Midwest. Again, corn yields and pod counts were disappointing. Both Nebraska and Indiana came in below last year. Corn yields in both states were around 10 BPA below last year, with pod counts in Indiana lower by 4% and Nebraska off almost 10%. The USDA went in the right direction on the August crop report, and September is statistically on track for another reduction, with corn yield potentially falling below 180 BPA. Meanwhile, the 53 BPA soybean yield is suspect and looks likely to decline further. Carryouts on corn and soybeans are on the decline.
As the tour moves into the heart of the Midwest in Iowa and Illinois today, nitrogen leaching is expected to have reduced the length and width of cobs. If the tour produces yields below last year again, then reality will start setting in for the perma-bears that August weather will not be able to save the crop and produce the hoped-for 184+ BPA corn and 53 BPA soybeans. StoneX, which typically guesses final yields, will be scrambling to reassess.
A corn yield below 180 BPA could send carryout tumbling below 1.5 Bil Bu, and then we have the prospect of increasing demand with corn sales to Europe. If that carryout gets to 1.4 Bil Bu or lower, the case is building for a winter rally in corn toward $6.00 on the March or May contracts. Soybeans are setting up a target of $13.30-13.60.
The wheat trade continues to play “Hopium” that world wheat supplies are adequate enough to keep valuations from pushing above this summer’s highs, but time is running out. As we approach the beginning of September, the need for wheat to move into West African nations, the Middle East, and Asia will become acute. With the Black Sea routes essentially pinched off, wheat is setting itself up for a sharp wake-up call, especially if we suddenly see wheat sales spike out of the Gulf. That could set off a sharp chain reaction, pushing Kansas HRW wheat above $8.00, with Chicago and Minneapolis following.
Cattle Overview
Cattle futures had a robust rally Tuesday morning, reminiscent of Monday’s trade, on news that the Ft. Morgan plant in Colorado will resume full production the week of September 7. The plant has historically employed around 2,000 workers and can process more than 4,000 head per day. But again, similar to Monday, early gains were checked, with only moderate gains reflected at the end of the day.
This contrasts with previous lows in the cattle market, when immediate V-bottom rallies occurred. This is a telltale sign that major tops have formed in the cattle trade, with feeders peaking in October 2025 at their high watermark over 383, while live cattle peaked at the opening of May this year. This does not mean the cattle trade can’t have recovery rallies, and substantial ones at that; it just means the prospect of seeing new highs this winter has diminished considerably.
Boxed beef values vaulted higher, with Choice picking up $11.58 yesterday to $319.15, while Select gained $2.03 to $366.29. Movement was 118 loads (75.24 loads of Choice, 11.81 loads of Select, 12.53 loads of Trim, and 18.85 loads of Ground Beef). This revelation yesterday did not keep the front end of live cattle futures from stalling and drifting back below 220 for October and December. For now, bids and offers remain elusive, with no light cash trade occurring yesterday. The August board anticipates a softer cattle trade, with something developing in the 226-228 range for this week.
The feeder index was again lower, off $0.84 yesterday at $343.55, with August feeder cattle trading close to that value early in the day but falling away throughout the session. The index has 12 days to come together with cash, and it seems to be pulling the nose ring on the futures. Yesterday, at the OKC West Livestock Auction in El Reno, Oklahoma, steer and heifer calves traded $15.00 to $25.00 lower on a light test in most weight classes. The sale report did note that 48% of the calves were unweaned, keeping the pressure on.
The numbers remain the same today, with support on October cattle in the 215-216 range that needs to hold on a closing basis, with upside resistance initially at 225 and major resistance at 229-230. October feeder cattle have set up critical support in the 319-320 range, with initial resistance at 334 and then major resistance at 340-341.