Daily Market Cast: 8/6

Daily Commentary: Thursday, August 6, 2026

Transcript

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Hey everyone, this is Allison giving you today's Daily Green Market commentary for Thursday, August 6th. And during the final week of July, we had markets at a really good spot, and grain markets in general looked like they were poised to keep running. Wheat had reached a two-year high, soybeans a three and a half year high, and December corn had rallied 66 cents from that June 30th acreage low. And there was plenty of reasons for that strength. Solid exports, repeated U.S. soybean sales to China, war-related tensions with Russia, Ukraine, and two consecutive weeks of declining corn condition ratings. And the fund managers are picking up on it. They were long in actually adding to positions across corn, wheat, and beans. And the weather outlook gave the market just another reason. We were looking at some hot, dry forecasts and an uncertain start to August. And this week's actually drought match shows drought affecting 28% of U.S. corn, 26% of U.S. soybean production, and 58% of spring wheat production. A year ago, only 3% of corn and 4% of soybean production were in drought. So conditions have clearly deteriorated here over the summer and have greatly deteriorated from a year ago. But yet instead of building on these supportive factors, the market has given back much of that rally and has shown little interest in maintaining weather premium. And to be honest with you, markets are just really at a crossroads right now. We're in need of a fresh catalyst. We need to keep the bulls fed if we're gonna keep going higher. And that could come from any number of factor factors. Um we could see the forecast turn hotter and drier as we go into the middle of August. We could see some increased Chinese buying, a surprise in next week's USD report, or renewed Russia-Ukraine tensions. But for now, traders just remain almost entirely focused on US production estimates and the potential size of this year's crop. And it's kind of a timing thing. We're seeing a lot of private analysts coming out with their expectations for where yields are gonna be at, and ultimately it pressures the market. So at this point, there's certainly things out there that can move the market. Um, and we know that the US production story is important, but it is only part of the story. Exports remain the bright spot here for the corn market. Old crowd commitments are running 23% ahead of last year, and that's ahead of the USD's forecast of a 16% year-over-year increase. So commitments now represent 103% of the USD's export projection, suggesting that we may see that estimate move up 25 to 50 million bushels in the next USD report. Brazil also moved forward with its higher ethanol mandate despite its legal challenges. The required ethanol blend increased from 30 to 32 percent on August 1st, which should strengthen Brazil's domestic corn demand and potentially limit the amount available for export. And we're also seeing private analysts continue to lower EU corn production. So, with that and some and um obviously some slowing delays here out of Russia and Ukraine and EU having lower production, there is a lot riding here that the US could see some more demand. And the trade may be fixated on how many bushels US farmers produce, but supply, again, is only one side the balance sheet. A large US crop could keep a lid on prices initially, but if demand remains strong and global supply is tightened, the market may eventually discover that those potential extra bushels that um are are actually going to be needed and not necessarily burdensome. September corn did sell two and a quarter cents higher at 439, December closed at 462, two cents higher. And China remains the biggest story in soybeans. Rumors late yesterday suggested China purchased 800,000 metric tons or about 12 to 15 cargoes of U.S. soybeans. And this morning we got an announcement for just 122,000 metric tons. But we did see a spark late in the session, and that may indicate that additional business was completed, but has not yet been announced. So we could see some larger flash sales tomorrow morning. New crop soybean commitments have reached 308 million bushels, which is a four-year high and 134% ahead of last year. August weather will obviously drive the supply side, but China's follow-through will determine how quickly those bushels are absorbed. September soybeans did close at 1160, 3.5 cents higher, and September soybeans finished three cents higher at 1177 and three-quarters. And wheat continues to scrub to struggle here despite escalating Black Sea tensions. A Russian missile reportedly damaged a vessel carrying Ukrainian wheat, while Ukraine is actually working with Romania to shift some export movement. So the market has really become kind of numb to these headlines, and alternative export routes are helping keep grain moving. Global demand is present. We did see Algeria uh purchase wheat this week, but that business was not translated into stronger U.S. um demand. Total U.S. export commitments are down 30% from last year, while the USDA is forecasting only a 15% decline. Weather risk is also increasing. Um, drought now covers 58% of U.S. spring wheat acres, which is up 33 percentage points in just two weeks, while Durham acres um in drought actually jumped to 49%. So the same dry weather is actually accelerating maturity and adding to harvest pressure. And early spring wheat yield reports remain extremely variable. Um we've been hearing ranges from 20 to 70 bushels per acre, while protein levels have been generally strong. And on top of US going into harvest, we're also dealing with the EU and their projections, just like corn, are moving a lot lower. So the risks are building, but wheat needs more of the world's business to shift toward the United States before it can really turn those concerns into a sustained rally. And today we did see September Chicago week close 11 cents lower at 631 and a quarter. September KC settled at 699 and three quarters, 13 and three quarter cents lower. And September Minneapolis ended the day at 671, 12 and a half cents lower. And it took about three weeks for live cattle futures to rally back 50% of the July break. And today the market gave back roughly a third of that recovery. US beef export sales this morning came in above the four-week average. McDonald's reported a strong quarter, and cash cattle traded as high as 237 in parts of the north. So all of that was positive news, but by the close, the cattle complex was in shambles. Mid-morning box beef prices were reported to be down five dollars and ten cents, which startled the butt the bloodbath. Umce selling began, stops were triggered and the liquidation fed on itself through the end of the session. Feeder cattle had rallied back a little more than 38.2% of the July break and also gave back roughly a third of that recovery today. August live cattle fell $2.95, closing at $231.22.5, while December dropped $4.30 to finish at $224.37.5. August feeder cattle were down over $5, closing at $3.50 $3.48.05. October feeders fell $7.47.5 to settle at $331.95. And lean hogs also came under selling pressure today with contracts posting modest triple digit losses. October lean hogs traded and closed below last Thursday's low, marking a failure of chart support. So the next downside support comes in at the July low of $79.775. If that level fails to hold, we would not be surprised to see prices work their way back towards the low 70s. October hogs fell $1.30, closing at $81.72.5, while December was down over um $1.42.5, finishing at $73.225. So again, if you have any questions, feel free to reach out. Otherwise, we hope you have a great night. We'll talk to you again tomorrow.