Daily Market Cast: 8/12

Daily Commentary: Wednesday, August 12, 2026

Transcript

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Good afternoon everyone. Today is Wednesday, August 12th, and this is Sam with today's commentary. August continues to be the month of surprises, and once again, harvested acres provided one of the biggest surprises of today's report. Corn and soybean planted acreage now totals a record 183.5 million acres, well above the roughly 173 to 180 million acre range we have seen since 2016. That raises a legitimate question about why the June acreage survey has become a less reliable indicator the last couple of years and where all of those additional acres are coming from. Earlier this year, the combined corn and soybean acreage estimate was close to 178 million acres. So this is a meaningful difference similar to what we witnessed in 2025. We will say this the other number worth watching closely is the 26-27 corn ending stocks to use ratio, which was lowered to 10.1%. As a general rule of thumb, once the stocks to use ratio moves below 10%, the corn market trends tends to become much more sensitive and upward price movement can accelerate quickly. For soybeans, USDA increased crush but left exports unchanged despite the steady stream of recent export sales announcements to China. Private exporters reported another 244,000 metric tons of soybeans for delivery to China during the 26-27 marketing year this morning. There's also some speculation that soybean carryout could fall below 300 million bushels by the January report. Historically, once stocks tighten to that level, the market becomes much more sensitive and prices often have to move higher to ration demand. We are not there yet for both corn and soybeans, but we are right on the cusp. That makes demand and any further production adjustments increasingly important from here. Now on corn, the USDA lowered the national corn yield to 180.7 bushels per acre, but the acreage adjustment kept production near 16.01 billion bushels. USDA added nearly 1.4 million planted acres from the June estimate, with Iowa and Minnesota each gaining 250,000 acres, Wisconsin adding 200,000, and North Dakota and Ohio up 150,000. Nebraska moved the other direction, losing 350,000 acres. The first survey based yields also showed a sharp regional divide. Iowa increased to 216 bushels per acre, Indiana reached 206, and Ohio came in at 195. Conditions were much weaker farther west with Nebraska at 183, Minnesota at 197, and South Dakota at 151, with Kansas at just 126. The added acreage largely offset those yield losses, leaving production nearly unchanged from July despite the lower national yield. Bottom line, 16 billion bushel is still a large crop, the second highest on record behind last year. But the combination of weaker western yields and a 10.1 stocks to use ratio keeps the balance sheet from becoming overly comfortable. September corn futures gained 20 and a quarter cents to finish at 457. December futures ended at 480 and 34, also higher by 20 and a quarter cents. So I mean acreage was another major surprise. USDA increased planted acres by roughly 1.4 million acres from June, helping push production to 4.52 billion bushels, even with the national yield dropping to 52.7. Missouri added 350,000 acres, Mississippi 330,000, and Minnesota 300,000, while Arkansas and Nebraska each gained 250,000. Illinois and Iowa each lost 200,000 acres. Like corn, yields showed a clear regional split. Illinois increased to 67 bushels per acre, Indiana reached 62, and Mississippi came in at 63. Farther west, Nebraska fell to 57, Minnesota to 48, South Dakota to 41, and Kansas to just 38. That is important because several of the states gaining acreage are also carrying weaker yield estimates, limiting the production benefit of those additional acres. We will say this the acreage number is bearish on the surface, but the yield distribution leaves some room for production adjustments and western conditions continued to disappoint. September soybean futures gained 13 and 3 quarter cents to close at 1165 and a quarter. November futures settled at 1183 and a quarter, higher by 14.5 cents. Now onto wheat, we'd had a supportive report in regards to production numbers, with the USDA putting total production at 1.53 billion bushels, down 23% from last year. Winter wheat production was estimated at just 990 million bushels, down 29% from 2025, while spring wheat slipped to 474 million with a 51.1 bushels per acre yield, down 1.2 bushels from the July estimate. The domestic supply story continues to tighten compared with a year ago. Adding to that is another escalation in the Black Sea. Ukraine launched a large drone attack on Russia facilities, with Russian industry sources saying two major grain terminals were taken out of operation. That matters because Russia is the world's largest wheat exporter and this infrastructure is one of the most important export outlets. We both say this. The wheat market has become accustomed to Black Sea headlines with outlasting supply disruptions. If these attacks begin creating sustained problems moving Russian grain, that could change quickly. With US production already sharply lower, any meaningful export disruption would give wheat a much stronger fundamental reason to add risk premium. September Chicago futures gained 22.5 cents at 652 and three quarter. September Kansas City futures finished at 720 and three quarter higher by 21.5 cents. And September Minneapolis futures end of the day at 673 higher by 13 and 3 quarter cents. On to the livestock complex, the cattle market opened steady to lower this morning, and that was also for the rest of the day. There wasn't one bounce of bearish news to justify this kind of action today. There are some in the industry who are starting to believe the government has or is causing this market to move lower. It has been over a year since the administration stated that beef prices were too high and that it would work to bring those prices down. Since then, they have allowed more beef import imports from Argentina, changed import quotas, and taken on other steps to increase the supply of beef. It's ironic that beef is currently being recalled after being imported from Argentina because it did not go through the proper import channels. How surprising is that? We all knew the Mexican border would eventually reopen. The point is that the sentiment of the market has shifted and until something changes, rallies are likely to be sold. That supply story hasn't changed and won't change for the next six months or longer. This is one of those times when prices don't reflect what is actually happening in the country. There appears to be some manipulation going on in the market at the moment, but how do you prove it? That is the frustrating part of a market that is being driven more by sentiment and outside forces than by underlying supply fundamentals. August cattle were $2.17.5 lower, closing at $2.30.57.5, and December was off $2.90, closing at $2.22.80. August feeders were off $3.82.5, closing at $3.46.35. And October was off $6.30, closing at $3.30.40. Lean hogs were all higher today except for the soon to expire August contract, which was down 20 cents to close at 95.67 and a half. October hogs again 22.5 cents to finish at 83.55. There may have been some spreading between live cattle and lean hogs today, which gave the hog complex a boost. There's nothing in the current hog supply and demand fundamentals that would support a sustained uptrend at this time. Seasonally hog prices tend to work lower into the fall, and we are already seeing that seasonal weakness reflected in the deferred futures. We expect a sideways to lower market to continue for now. This concludes today's commentary. We hope everyone has a great evening, and we'll talk to you tomorrow.