Daily Market Cast: 8/20

Daily Commentary: Thursday, August 20, 2026

Transcript

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Hey everyone, this is Allison giving you today's daily grain market commentary for Thursday, August 20th. And we kind of had a follow-through Thursday. We had some really good price action early in this session, but we did see some technical pressure come in late in the day, but still we did see some price progress and we're gonna take it. So far, China has booked roughly 5.7 million mectrotons of new crop soybeans, which is actually about 48% of all of soybeans' new crop bookings. They also purchased another 150,000 this morning, but let's be real, China does have a lot more buying to do. So just for perspective, 25 million mectrotons is close to 1 billion bushels or roughly 184,000 futures contracts. And in the past, we've seen China's purchases often come in chunks of around 5 million bushels. That said, we would have expected them to do a bit more or be a little bit more aggressive on the last 91 cent break. And if you remember, soybeans reached 1256 and a half and then dove 91 cents, despite all the hoopla two, three weeks ago about worsening crop conditions. So that was really hard for us and the market to really figure out. The market just kept getting good news and still sold off nearly a dollar. And we saw the same happen in corn. We dropped from 506 to 458 despite all the crop condition stories. Now you fast forward to this week, and the tone has turned. The crop tour to date has produced some bullish findings, and the market likes what it's hearing. Bad things for the crop can mean good things for price. So just as a recap of yesterday's um tour findings, Illinois corn came in at 184.2 bushels per acre, which was down from 199.6 last year, and the 199.2 three-year average. Pod counts totaled 1431, which was below last year's 1479, but above the three-year average. Western Iowa, corn came in across the three districts from 189.7 to 191.8. All three were below last year, and pod counts range from 1269 to 1558. So full Iowa and Minnesota results are gonna be out tonight. Pro farmer's national corn yield and soybean production estimates will not be released until Friday after market close. Those numbers will include pro farmers' adjustments for states outside of the tour. So those national averages are not gonna simply be an average of the seven states sampled this week. Last year's record yields certainly created a high bar here for this market, but it may still be a big crop this year, but average is not the same thing as another record. So now we'll see what Iowa and Minnesota bring tonight and whether the market continues treating bad crop news as good price news. So for now, the important change is that the market has finally stopped ignoring the crop concerns. December Courton stopped just shy of its May high at 506 and a half. That is going to be the next hurdle, an important one, especially following this week's move. Speculative traders did buy another 23,000 contracts yesterday, pushing their net long position near 260,000 contracts. That's the largest position they've had in three months. And the funds are clearly buying into the lower production, potentially stronger demand narrative. And that supports the rally, but it also means the trade could be becoming a bit more crowded. Um, demand though remains impressive. U.S. exports were in line with expectations this week. Old crop commitments are now up 25% year over year versus the US Day's forecast for an 18% increase. So that suggests that the estimate may still be 25 to 50 million bushels too low. New crop commitments, on the other hand, are a bit less impressive. They're down 32% from last year. Globally, Ukraine has shipped about 500,000 metro tons of grain since August 1st, and that's about 20% of its potential capacity. So that keeps the door open for additional U.S. demand. The market now has a real test to go into the end of the week, is if December corn can clear 506.5 or is the lower production story already priced in. We did see December settle at 503.5, 5.5 cents higher. September gained five and three quarter cents, closing at 478 and 3 quarters. And at the lows, we were certainly all worried about holding $11. And now, after a 70 cent rally, the focus has really shifted to whether November soybeans can settle above $12.50 and challenge the contract high of $1,256.5. The move to new monthly highs, though, did create some technical selling today, making this again an important test for the rally. But we are seeing fundamentals help. U.S. golf soybeans do remain 30 to 40 cents below Brazil through the end of the year, and that gives the US a very good competitive advantage. New crowd commitments have also reached a four-year high. They're actually up 102% year over year. So the balance sheet now has little room for yields to disappoint. And again, the USD is using 52.7 bushels per acre. So even a modest reduction could push ending stocks sharply lower. And there's also questions surrounding South American supplies. Um we did hear of one private analyst today projecting Brazil's 26-27 crop at one 181.7 million micric tons. And that's considerably below the USD's 186 million metric ton estimate. So the rally has come along quickly, but it's not running, it's not going to run on technical strength alone. And we are seeing fundamentals proving to give the trade a reason here to test those old highs. So the question is whether soybeans can get past some technical pressure here to finish the week to get there. Um, November soybeans did close at 1236 and a half, less than a penny lower. September ended one and a half cents lower at 12.20 and three quarters. And we may finally be seeing some demand consequences from the disruptions in the Black Sea. Russia and Ukraine continue targeting vessels and port infrastructure. And we're starting to hear of Asian mills reporting that they are concerned that their previous purchase cargoes are not going to be delivered. So Australia is already seeing some increased interest, uh raising the question of whether we'll see some additional business eventually shift to the US, especially as Russia's August wheat shipments are expected to hit 16-year lows. So US wheat exports this morning were in line with expectations, but year-to-day commitments are still down 32% from last year versus USD's forecast of a 15% decline. So the current pace does suggest USD's export forecast is too high, but prolonged Black Sea delays could quickly improve demand for US wheat. And that may be why we did see Minneapolis wheat hold on better, is we are starting to see some millers become more concerned. But the funds are also starting to move. Chicago open interest fell nearly 14,000 contracts yesterday. Just another sign that managed money shorts are exiting. So the path of least resistance remains higher, but wheat now needs actual export demand, not simply more headlines to sustain the move. So September Chicago wheat did gain two and a half cents today, closing at 682 and three quarters. September KC closed less than a penny higher at 762 and a quarter. And September Minneapolis was the gainer today, selling at $7.03 of a cent, six and three quarter cents higher. And feeder cattle traded below last Friday's low today, but once that happened, the acceleration of the selling slowed and prices soon rebounded, which was a good technical move for the Bulls. So if the selling had accelerated after breaking last Friday's low, it definitely could have been a very ugly day for the cattle complex. So the Catalon Feed Report will be released after market close tomorrow, so it won't really be until Monday that we see how the market reacts to the report. Live cattle never did trade near Friday's lows, so there was no real threat of a bearish sell-off today. We must be cautious to you though. Both complexes printed a lower low and a lower high today. So the downtrend does remain in place. The bulls still have a huge hurdle to cross if they want to turn this market around. August live cattle were down 7.5 cents, closing at 223.35, while December gained $1.12.5 to finish at $218.27.5. August feeder cattle fell $1.55 closing at $3.35.03, while October feeders gained $0.65 to sell at $3.22.70. Lean hogs gap lower this morning and were never able to close the gap. Um the market is on the verge here of starting its next move lower. And this week's lows held today, but prices closed just a whisper above those lows. So October hogs were down $1.27.5 to close at $80.22.5 with this week's low at 80. So February hogs did fall 42 and a half cents to finish at 73.82.5. All of the livestock markets are in definitely in need of some bullish news, and that is hard to come by at the moment. It seems like the funds have jumped out of uh the livestock complex and maybe starting to get some momentum here on the grain side, which is helping that market out. So a bit of back and forth is what we're getting at. So if you have any questions, feel free to reach out. Otherwise, have a great night. We'll talk to you again tomorrow.