Daily Market Cast: 8/17

Daily Commentary: Monday, August 17, 2026 

Transcript

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Good afternoon everyone. Today is Monday, August 17th, and this is Sam with today's commentary. Most of today's headlines created the rally to weekend weather and the start of the pro farmer crop tour. Those factors certainly helped, but were were they really responsible for the entire move? It is hard for us to believe excessive rainfall across the central and eastern corn belt were responsible for the brunt of today's corn rally. If weekend weather were the primary driver, we would have expected a much stronger reaction when markets opened Sunday night, not a rally that developed during Monday session. We flood somewhere in the corn belt nearly every year. There will be a crop losses in areas that received excessive rainfall, but social media made it sound as though every corn plant in those flooded areas had been destroyed. It simply does not work that way. If the damage is as widespread as some reports suggest, this afternoon's crop condition report should begin to reflect it. At the same time, the recent rainfall likely stopped crop deterioration in areas that have been dry heading into the weekend. That is an important part of the story that seems to be getting overlooked. The Pearl Farmer Crop Tour is showing variability, but a handful of early samples are not enough to change the national yield outlook. Weather and the tour gave traders a reason to buy, but technical buying, fun positioning, and strengthened soybean oil also contributed to today's move. We need to keep the rally in perspective and avoid assuming every weather headline automatically means a major reduction in national production. In our opinion, today's corn rally had more to do with traders continuing to digest the latest USDA reports, along with technical buying than with flooding alone. Funds remain net long, 166,770 corn contracts, although they reduced that position by 15,176 contracts in the latest reporting week. Open interest also fell by more than 64,000 contracts, suggesting the recent sell-off selling was primary long liquidation rather than aggressive new short selling. December corn challenge is July high at 492, but failed to trade above it. That was not necessarily negative, but 492 remains an important resistance level. A close above that area would open the door for a test of the contract 2026 high at 506 and three quarter, set in May. September corn also came within two cents of its July high, keeping 470 as the first major resistance level. The market is back near levels where rallies have stalled before. Let's see if buyers can push through resistance before assuming today's strength is the beginning of a larger move. September corn futures gained six cents at 465. December futures finished at 489.5 of 6.25 cents. Soybean start of the week on a stronger note with sharply higher soybean oil providing much of the support. Stalled US Iran pea stocks, lifted energy markets while palm oil futures climbed to multi-month highs on concerns that El Nino could reduce production in Indonesia and Malaysia. Those two countries account for roughly 80% of global palm oil production. The July Nopa crush came in below expectations, but it was still 10.7% above last year. Soybean oil stocks were the most supportive part of the report, failing or falling to the tightest level month end supply since October and below every trade estimate. Funds remained that long 101,362 soybean contracts, although they reduced that position by more than 24,000 contracts in the latest reporting week. That leaves soybeans vulnerable to additional long liquidation, but strengthened soybean oil and tighter oil stocks provided support to start the week. September soybean futures gained 23 and a quarter cents, finishing at 1201. November futures settled at 1216 up 23.5 cents. We'd had a mixed session as the market weighed tightening Black Sea supplies against harvest pressure and an otherwise comfortable global supply outlook. Ukraine's grain exports during the first half of August were reportedly down 75% from last year, while Russian shipments this month are expected to run at least less than half of the five-year average. The continued attacks and uncertainties surrounding Black Sea movement are pushing some Asian buyers to look toward other suppliers. Crop concerns are also building in Canada, where an extremely wet spring and early summer have increased disease pressure across Durham, spring wheat, canola, and pulse crops. Fund positioning remains mixed. Funds added to their net short position in Chicago wheat, which now stands at 31,401 contracts. They remain net long 27,662 contracts of Kansas City wheat and 9,879 contracts of spring wheat. Until the market sees stronger export demand or a larger production problem, wheat may continue struggling to maintain rallies despite the support of Black Sea and Canadian crop headlines. September Chicago features closed on change at 674 and three-quarters. Kansas City September futures settled at 658 and 34 up four and a half cents. September Minneapolis features closed lower by three and a quarter cents at 675. Lastly, onto livestock, even though the cattle complex closed lower on Friday, there was some unfinishing buying that began late on Friday, and that led to a higher opening in today's action. About mid-morning, though, the ceiling came in and markets turned lower for the day and finished mixed by the closing belt. Funds sold about 1,400 contracts last week, which gives them a net long position of 64,660. This is well off their spring high position of 134,000 contracts. Funds are still long 8738 feeder contracts, which is well off the 21,000 contracts at their spring peak. The trade is still trying to find price discovery of the closing of the latest slaughtering facilities. This does bring a cloud over the market as the effects are forthcoming, just like the reopening of the border with Mexico. August lab cattle were up 92.5 cents, closing at 224.55, and December was up two and a half cents, closing at 218.40. August feeders were down 85 cents, closing at 339.97 and a half, and October was off 7.5 cents, closing at 325.35. Lean hogs opened higher this morning as well, but the buying dried up and selling came back into the market, leaving most contracts closing about steady for the day. Funds sold approximately 5,400 contracts last week, bringing their net short position to 15,120 contracts. The record net short position in lean hogs is 31,110 contracts, so they are now about halfway to that mark. The bulls need to be fed, and right now there isn't much for bullish fodder for them to feed on. With AUKUS now expired, October is still a long way from expiration and doesn't need to converge with the lean hog index anytime soon. The index closed at 9587 today, while October hogs finished down two and a half cents at 81.72 and a half. For the next six weeks, traders can push and pull October features in either direction and keep them well away from the current lean hog index. That gives the market plenty of room to move before convergence becomes an issue. This concludes today's commentary. We hope everyone has a great evening and we'll talk to you tomorrow.