Daily Market Cast: 8/14

Daily Commentary: Friday, August 14, 2026

Transcript

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Good afternoon everyone. Today is Friday, August 14th, and this is Sam with today's commentary. What a whipsaw of a week, but we ended on a good note. Corn and soybeans are pushing back toward the upper end of their weekly ranges, while spring wheat and canola continue working higher. After several days of sharp moves in both directions, it looks like traders are putting some risk back ahead of the weekend. Overall, the USDA gave corn and wheat bulls something to work with. Corn yield and ending stocks were lowered while USB production fell to its lowest level since 1970. Soybeans and canola were handed larger production estimates, yet both markets are finishing the week with constructive price action. That matters. The market knows what the USDA put on paper. What it does not know is whether those bushels will actually make it into the bin. Too much rain is becoming a concern in parts of the Midwest. Canada's canola harvest has barely started, and heat and drought continue creating problems in areas of the Midwest and Europe. Add Black Sea uncertainty and renewed tension between the US and China, and traders may not want to carry large short positions into the weekend. That appears to be giving the markets a risk on feel as we finish the week. Does that guarantee higher prices next week? Absolutely not. Weekend weather forecasts can change, geopolitical headlines can reverse, and the computers can remove risk just as quickly as they added it. But after this week's red one day, green the next price action, we will take a stronger finish. USDA has set the baseline, now the market must decide whether actual production will back it up. To finish the week, we will take the green. On a corn, the world corn story is getting more interesting. Argentina's producers are expected to cut corn acres by roughly 5.4% while Europe's crop continues moving in the wrong direction. Germany now expects production to fall more than 14% from last year, and French estimates are also being reduced. Why does that matter? The market has spent much most of the year assuming another big round of global production. There is still plenty of time for South America to grow a crop, but when expectations are this high, there is not much room for weather problems. Technically 481, the high for this week, excluding today, is was the first hurdle, get through that level, and the computers could quickly start chasing corn towards $5. Initial support sits at near $467. The chart has improved, but bulls still need to prove they can take out $481, which we did to end the week. That is the line between another failed rally and a real run at the $5 handle. September corn futures gained 11 cents at 459, gaining 20 cents for the week. December futures closed at 483 and a quarter, up 11.25 cents, and gaining 21 and a quarter cents for the week. Now on to soybeans, the USDA reported a daily sale of 136,000 metric tons of soybeans to China this morning. Good news, but China needs to keep showing up. Cinnograin also announced that it will auction 360,000 metric tons of imported soybeans on August 19th, its fourth major auction since late July. On the surface, selling reserve beans could reduce China's immediate import needs. However, traders believe Cinnograin may be clearing space for incoming U.S. soybeans. China has reportedly purchased around 7 million metric tons of U.S. beans so far, against its commitment to buy 25 million annually. There is still a long way to go, but repeated auctions and additional USTA sales would suggest that beans are beginning to move. Weather is also becoming more complicated. Repeated rain, hail, and damaging winds have affected crops from South Dakota and Nebraska through Iowa and into central Midwest. More storms are expected through the middle of next week before conditions improve potentially later in the north in the month. Then comes next week's Pro Farmer Crop Tour. The tour should give the trade a better look at pod counts and storm damage across seven major producing states. Keep in mind pod counts are not the final yield. August weather still determines how many pods are retained and how well those beans fill. The USDA put 52.7 bushels per acre on paper. Next week the market gets its first look at whether the fields agree. September soybean futures finished at 11.77 and three quarters, higher by 11.3 quarter cents, gaining 18 and three quarter cents for the week. November futures settled 10.25 cents higher at 11.92.5 for the week. The contract gains 16.25 cents. On to wheat, here's the deal. Ukraine does not really have a storage problem, it has an export problem. With Black Sea shipments sharply reduced, Ukraine could face a storage shortfall by November. The size of that storage will depend partly on the corn harvest, but the problem is already large enough that Ukraine is seeking help to purchase temporary on-farm storage. Additional grain bags and temporary facilities may keep grain off the ground and prevent producers from becoming forced sellers, but they do not reopen ports, lower freight costs, or move one bushel to an importer. Temporary storage buys Ukraine time, it does not fix the export channel. That distinction matters. Ukraine's grain can still appear as supply on the world balance sheet while being difficult or impossible for buyers to access. At the same time, grain backing up inside the country could pressure Ukrainian cash prices and create another logistical mess as harvest advances. Meanwhile, Europe is too dry and hot. Dry weather in the US plains could become a fall planting problem if it continues. Add smaller crop estimates from Australia, Germany, and Brazil, along with Brazil potentially needing its largest wheat imports in roughly 20 years. None of these issues alone creates a major shortage, but the little problems are sacking up. USDA already put US wheat production at its lowest since 1970. Maybe the market is finally figuring out that wheat available on paper and wheat available to importers are not always the same thing. Technically, Chicago wheat has improved considerably. September futures are testing around 669 with the next area near 6.7 or 679, excuse me. Kansas City wheat has resistance around 731 and 34 and 744 and a half. Spring wheat continues to lag, making its relative weak list worth watching. Chicago September futures gained 22 cents to close at 674 and three-quarter. September Kansas City finished at 754 and a quarter, up 33 and 3 quarter cents. September Minneapolis lagged behind, gaining 9 cents at 678 and a quarter. Now onto the livestock. The big headline was Tyson Foods announcements that it will close three facilities, one case-ready plant, and two slaughter plants. Closers will hit surrounding communities immediately, but the market appears to be doing what it does best, overreacting. Only time will tell how cash prices are affected, but news of this magnitude often pushes prices lower faster and harder than justified. Meanwhile, the way cattle and hogs are bought and sold is becoming less transparent. Major packers, wholesalers, and retailers are increasingly using long-term pricing models built around historical data, financial risk theories, and in some cases, artificial intelligence. These formulas can consider price volatility, basis risk, livestock supplies, demand, cutout values, carcass data, competing proteins, and projected box beef import prices. The goal is to establish a risk-adjusted price that protects the buyer's margin while remaining acceptable to the seller. The problem? These pricing models and the information behind them are generally not available to producers. A new era of livestock price discovery may be developing. If more animals are marketed through confidential agreements on private formulas, smaller producers could have less information and less leverage when negotiating prices. USDA may eventually need to adapt its reporting system to reflect how livestock is actually being marketed, potentially requiring congressional action. Nothing stays the same in this business. Producers will have to adapt, but the real question remains: will the system improve risk management for everyone or make it even harder for smaller producers to know what their cattle and hogs are truly worth? August live cattle close 260 lower at 223.62.5, with October down $1.17.5 at $218.87.5. August feeders give back two bucks at $340.82.5, with September down $265, settling at $334.55. October Lean Hogs finish at $81.75, down 37.5 cents. This concludes today's commentary. We hope everyone has a great weekend and we will talk to you next week.