Daily Market Cast: 8/5

Daily Commentary: Wednesday, August 5, 2026

Transcript

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Good afternoon everyone. Today is Wednesday, August 5th, and this is Sam with today's commentary. There are plenty of headlines moving through the markets, but the overall reaction remains cautious. Crude oil has stabilized with traders watching reports of progress toward reopening a shipping route through the Strait of Hormuz. A final agreement is not guaranteed, and the market is still waiting to see how quickly shipping could return to normal. The SP 500 and Dow reach new highs while the US dollar is trading near a six-month low. However, corn and soybeans remain focused on weather, and we continues to watch the risks surrounding Black Sea shipping. Recent rain and cooler temperatures have improved crop expectations across much of the Midwest. Additional showers are possible from Nebraska through Iowa, Illinois, and Wisconsin, but the forecasts do not agree on coverage. The European model is wetter while the GFS leaves more holes in the main rain corridor. Warmer and drier conditions may also return next week, which means the market will continue reacting to each forecast update. The other forecast is private production estimates ahead of USDA's August 12th report. Stone X estimated the 26 corn yield at 184.8 bushels per acre and production at 16.16 billion bushels. USDA is currently at 183 and 16 billion bushels. Stone X is getting attention because its August estimate last year correctly suggested USDA's July yield projection was too low. However, Stonex still finished 1.6 bushels above the final 2025 yield. Its estimates deserve attention, but they are not the final word. For soybeans, Stonex estimated a 53 bushel yield and a production at 4.47 billion bushels, nearly matching USDA's current outlook. The market is leaning toward another large crop and recent weather supports that view. If the weather forecasts verify and temperatures remain moderate through grain fill, it would be difficult to argue against Stonex corn estimate. At the same time, rainfall has been uneven and a hotter or drier shift next week could quickly bring yield questions back into the market. For producers, the key is not getting caught up in one private estimate or one forecast run. Yield expectations are high, but the weather still needs to finish the crop. The bushels being projected are not in the bin yet. On to corn, the more constructive story in corn continues to be demand. Private exporters reported another 120,000 metric ton sale to Mexico mixed between old and new crop deliveries. What stands out, Mexico is already securing needs well into the following marketing year. June census data were equally impressive with corn exports reaching a record 312 million bushels and cumulative shipments now near 3.4 billion bushels. That pace raises the possibility USDA could increase its export projection in the upcoming August WASDI. European production concerns may provide another opportunity for U.S. corn later in the marketing year if dryness there reduces feed grain supplies. The Mexico cattle situation is another variable worth watching. If cattle movement into the US increases once the border fully reopens, Mexican feed demand could eventually be affected. For now, however, export demand remains one of its strongest arguments against becoming overly bearish corn at current prices. September corn futures gave back 5.5 cents to close at 436 and three quarters. December futures also finished 5.5 cents lower at 460. Soybean demand continues to surface as prices retreat. Flash sales to China and unknown destinations have totaled nearly 28 million bushels this week, providing an important counterweight to the recent selling pressure. The media market reaction is worth noting. Traders appear to view much of the Chinese buying as expected business rather than new demand, particularly after previous indications that China intended to increase US purchases. That does not make the sales unimportant, but it does help explain why confirmed export business has struggled to generate a stronger price response. This creates an interesting setup heading into next week. Additional Chinese purchases would continue reducing uncertainty surrounding the export program, while a slowdown and announcements can quickly shift attention back toward the size of available supplies. Technically, soybeans are also approaching an important area where buyers need to show up. If demand continues appearing on breaks, it could help establish a floor. Failure to attract additional buying would leave the market vulnerable to another round of liquidation. September soybeans futures lost two and a quarter cents to close at 11.56.5. November futures finished at 1174 and three quarters, down three cents. The Wii Complex performance stands out recently simply because it has been able to trade independently from corn and soybeans. That relative strength is important after yesterday's sell-off and suggests sellers are becoming less aggressive when wheat reaches the lower end of its recent range. The next question is whether the market can turn that relative strength into follow-through. Wheat has had several sharp rallies recently that failed to attract sustained buying, making confirmation increasingly important. A one-day bounce is constructed, but the market still needs a consecutive stronger close before we can say the short-term trend has turned back higher. For now, wheat appears to be developing better underlying support than the row crops. If corn and soybeans continue lower while wheat holds or advances, that spread relationship could attract additional speculative interest. The key will be whether buyers remain active after the initial move, holding today's gains would be more meaningful than simply posting another headline-driven intraday rally. September Chicago futures gained 3.3 quarter cents, closing at 642.25. September Kansas City futures finished at 7.13.5, higher by 6.5 cents, and September Minneapolis futures closed at 683.5 down a penny. The cattle complex traded on both sides of unchanged today. By the close, all contracts finished higher with the day's highs marking new highs for the current uptrend. It's the same story of tight cattle supplies and demand that remain strong enough to keep cash prices from slipping any further. In fact, it now appears cash cattle will trade higher this week. August live cattle gained $2.22.5 to close at $2.34.17.5. While December added $1.40 to finish at $2.29.47.5. August feeder cattle were up $2.12.5 to close at $3.53.32.5. And October feeders gained $227.5 to settle at $3.39.42.5. All of those contracts posted new three-week highs. Lean hogs gap lower today. Well, with most contracts posting triple digit losses, the Bears, however, were now unable to push October hogs below the last Thursday's low. That level remains an important area of short term support and needs to hold that this market is going to regain its footing. Funds continued buying cattle and selling hogs today, which added to the pressure in the hog complex. August lean hogs fell $1.25 to close at $96.60, while October was down $1.32.5 to finish at 83.2.5 cents. This concludes today's commentary. We hope everyone has a great evening and we will talk to you tomorrow.