Daily Market Cast: 8/7

Daily Commentary: Friday, August 7, 2026

Transcript

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Hey everyone, this is Allison giving you today's daily gray market commentary for Friday, August 7th. And grains finished the weak mix, but actually helped by a sharp break in the US dollar today following a disappointing jobs report. The weaker data reduced expectations for higher interest rates, pressured the dollar, and made US commodities more attractive to global buyers. And more importantly, demand stepped in on the break we've seen. Private exporters reported 238,000 metric tons of soybeans sold to China, along with 286,000 metric tons of corn sold to Mexico. So China and Mexico are buying the pullback. So now we just hope the funds are doing the same. Technical sport also played a role. November beans defended their 100-day moving average near 1170. Spring wheat held its 100-day near 676. And December corn bounced from the 50% retracement level at 459. Does that mean the sell-off is over? Not exactly yet, but demand showing up where it needs to and the charts holding together where they need to, that's a good start. So now we wait for a bigger recovery and see whether the funds join the buying or the bulls eventually cry, uncle. But corn futures are holding support and are trying to turn that into a foundation. A weaker US dollar helped today, but the more important development again was demand stepping in. Mexico bought US corn this morning with most of those bushels booked for the 27-28 marketing year. So are those buyers looking ahead and anticipating higher prices? Well, a case can certainly be made for it. Mexico is not simply covering immediate needs, it's using this pullback to secure corn more than a year in advance. So that doesn't guarantee the lowest in, but it sends an encouraging message. End users see value at these levels and their buying gives the market something to build on. And the USD report is going to be the next test next week. The trade is prepared for the possibility of additional acres and more production, but the bigger question is whether the USD will also recognize the strength we've seen in demand. If added supply is matched by higher usage, the market may begin viewing these bushels as necessary rather than excessive. So September corn futures closed on change today at 439 down one and three quarter cents for the week. December corn also settled on change at 462 down two and a half cents for the week. And after falling roughly 90 cents in two weeks, November futures reached the 100-day moving average near 1170 and attracted some buying interest. So that does not mean the correction is finished here, but the market was due for pause and it came at an important technical level. China also returned to the US market, and that timing matters. China's willing to buy the break. That suggests prices have moved back into a range where U.S. soybeans are competitive. So next week's USD report is not expected to provide many fireworks, if anything. August still has plenty to say about soybean yields, so major production adjustments may be limited. Demand is where the surprise could come from. The USDA has delivered several quiet soybean reports, but renewed Chinese buying could eventually force changes to the export outlook. So September soybean futures did finish the week a penny lower at 11.59, lower by 11.3 quarter cents for the week. November futures settled at 11.76 and a quarter one and a half cents lower on the day and down 11.5 cents for the week. And last month's surge to multi-year highs was really driven in wheat primarily by the Black Sea having logistical problems, not an outright shortage of wheat. And that distinction matters. If a peace agreement improves transportation and restores normal trade flows, some of that risk premium could quickly disappear. And so far, global importers have not chased higher price alternatives, especially from the US, where exports do remain well behind last year. Buyers are still finding cheaper wheat elsewhere. On top of that, Ukraine's outlook deserves some attention too. Its agriculture ministry now believes that wheat exports could fall to less than half of its earlier estimate and well below the USD's forecast. Ukraine is also requesting financial assistance from the EU to support farmers, so suggests that challenges extend beyond simply moving grain through ports. So next week's USD report is expected to show slightly lower US production and ending stocks that may offer support, but it's unlikely to really change the market's direction by itself. The pieces that are there, a smaller US crop, fewer Ukrainian exports, and a weaker dollar. What is still missing though is gonna be demand. So until global buyers turn toward US wheat, rallies may struggle to hold here. September Chicago uh futures did gain eight and a half cents today, closing at 639 and three quarters. September KC closed higher by 14.25 cents at 714. And September Minneapolis finished at 679.5, up 8.5 cents for the day, but down 11.25 cents for the week. And the cattle complex was mixed today. Feeder cattle posting modest triple digit gains, while live cattle actually printed small gains and losses. Yesterday's sharp break had no solid reason behind the move lower, and that may be why feeders were modestly higher today. In our opinion, live cattle should have been much higher as well, considering cash cattle were steady to hire for the week. It just goes to show that the market does what the market does. Um Labor Day beef procurement should be getting underway, which could provide some support to both cash and futures prices. August cattle were up 47.5 cents, closing at 231.70. December was down 22.5 cents at 224.15. There was bull spreading though in both pits today, which is constructive at least for the bulls. Lean hogs had a very quiet session with contracts closing higher. August lean hogs will expire next week, so they should trade close to where the index is hovering, which is currently around 96.95. August closed today at 95.50. October was up 50 cents, closing at 82.225. Leanhogs broke through support though this week, and that gives the bears some momentum going into next. Seasonal tendencies are also favoring the bears here. This market just needs some bullish news and it just can't seem to find any. So for now, the path of least resistance does remain lower. So again, we hope you have a great weekend. If you need anything, feel free to reach out. Otherwise, we'll talk to you next week.