Daily Market Cast: 8/21

Daily Commentary: Friday, August 21, 2026

Transcript

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Hey everyone, this is Allison giving you today's Daily Gray Market commentary for Friday, August 21st. And the Pro Farmer Crop Tour finally got the traders' attention this week. It didn't uncover a crop disaster, but it certainly raised some questions about whether the U.S. can produce the corn yield already built into the market. And the Pear Farmer Tour did release their national yield estimates after markets closed. So for corn, they're estimating a national yield of 173.2 bushels per acre. That was seven and a half bushels below the USD's estimate of 180.7 bushels per acre. On the soybean side, they're estimating a national yield at a record of 53.3 bushels per acre, with production projected at just over 4.5 billion bushels. So Pearl Farmer uses the crop tour results along with some other factors to build its national estimates. And the core number does not necessarily prove the USD is wrong, but its difference here is meaningful. And across USD's projected harvested acreage, seven and a half bushels does represent roughly 660 million fewer bushels produced. Soybeans, on the other hand, are a completely different story. Pod counts are encouraging, especially in Iowa and Minnesota. And it seems the crop will have enough moisture to finish. However, pod counts do not guarantee final yield. August weather and seed size will still matter here, and a lot of pods have a lot of work to do, especially in our area. So the takeaway here is fairly simple. The tour was supportive for corn, but potentially a warning for soybeans. So corn may struggle to reach the USD's expectations while we see soybeans still have the potential to surprise to the upside. But again, the crop tour here is only part of the story we were getting this week. The US dollar sitting near three-month lows, South American weather uncertainty is increasing, and global logistical concerns are also rising. And together we saw corn and soybeans settled the week near session highs. That does not necessarily guarantee that the rally continues, but it was a constructive finish. So next week becomes important, especially as we're looking at month-end positioning, adding some volatility while funds rebalance and decide whether this move has enough momentum to continue into September. But corn rallied 50 cents this week, finishing the week at new highs for the year. The USC did confirm another 205,000 metric tons for 2026 corn to unknown destination this morning, just showing that export demand is still following this market higher. And Brazil may be a more important longer-term story here. We did hear of one analyst expecting demand to exceed production within the country this year, driven largely by a 14% increase in corn use for ethanol. Production is expected to grow, but not fast enough to keep pace with that domestic demand. You combine that with European production losses and Black Sea disruptions, and that puts more pressure on the U.S. crop to produce. And the setup for higher prices is there. And now we need all these little pieces here to fall into place. And getting the ProFarmers uh yield estimate this morning is certainly one of them. So technically, if the old contract high does sit at 512 and a half, that's going to be the next major test. A successful close above that will put 525 in play. An initial support does sit near $5, followed by $4.90. And honestly, to finish the week here, the chart looks good. But holding the breakout is now just as important as making it. December corn did close five cents higher at $5.08.5. We actually did hit a high of $5.09 during the session. And overall, the contract did gain 25 cents this week. The USDA confirmed another big sale of soybean business this morning, 712,000 metric tons to China and 720,000 metric tons to onknown destinations. So that's 1.4 roughly new crop million metric tons of new crop sales here just this morning. And after an 80 cent rally, demand showing up here matters. The biofuel side of it's probably less supportive, at least in today's news. EPA data showed D4 rin generation falling 5.2% in July, just suggesting biodiesel and renewable diesel production slowed. So that tempered soybean oil during the session and likely held back soybeans from gaining further during the session. So technically, November soybeans do remain in an uptrend. Next resistance is going to be that July high, 1256 and a half. And the chart looks good, but demand needs to keep showing up to justify the next leg higher. And we need that to show both in exports and also on the biofuel side. November did sell the session at 1239 and a half, three cents higher, and gaining 47 and three quarter cents here for the week. And winter wheat drought coverage increased another two points this week, while 63% of the hard red spring wheat crop remains in drought, compared with just 14% last year at this time. So extreme heat is expected to continue in the near term. Although the two-week forecast shifts the hottest temperatures further southwest, Kansas may also receive some better moisture in the extended day outlook at the as the largest winter wheat producing state. So any improvement here in Kansas soil moisture will be beneficial ahead of fall seeding. And that improving moisture outlook may be why we're seeing Kansas City drag a little bit compared to Chicago and Minneapolis. But beyond this US weather, Black Sea shipping does remain restricted. European production estimates continue to move lower, and Australia is carrying some El Nino uncertainty. So those concerns do provide some underlying support, but wheat still needs some import demand, to be honest, here to shift toward alternative suppliers, including the U.S. Um, and that'll help us clear some of these resistance levels and get the story going here for wheat. September Chicago wheat closed one and a quarter cents lower at 681.5. September KC ended at 756.5 cents lower at 698 and a quarter, 20 cents though, higher for the week. And we're gonna be a little bit more blunt on the livestock side today. And to be honest with you, you know, the watching the market's one thing, but seeing some of these headlines that these guys have been dealing with is on real. And to be honest, cattlemen and women should be furious about today's announcement that the administration is going to allow 300,000 metric tons of ground beef to be imported into the country while waiving the normal out of quota tariffs. So under the US tariff rate quota system, beef imported within a country's quota faces a relatively low tariff, while beef above that quota normally face a 26.4% tariff. So today, for 90 days, up to 300,000 metric tons of ground beef can enter without that higher tariff. So that makes imported beef cheaper and could increase supplies while putting downward pressure on US beef prices. And it has been more than a year since the president first said beef prices were too high and changes would be made to bring them down. Well, since then, ground beef prices are about 10% higher. And even with this announcement, prices will remain above year ago levels. So today's action feels like really a knife in the back for cattle producers. We thought most of the bad news was already in the market, aside from possibly the reaction of today's cattle on feed report. And now producers also have to worry about Uncle Sam. Our other question is where are the cattlemen's organizations? Where are they behind this? Why aren't they making some kind of noise today? Produce producers really need to get on the phone and give them a call and see where they stand with this. Otherwise, we're seeing big egg win again. The beneficiaries of these cheaper imports will not be cattle producers, and there is no guarantee that the savings will actually make it to consumers. If the administration truly wants to lower beef prices for consumers, a better approach would be a nationwide store credit, allowing consumers to purchase beef cuts for 25 cents less. Um the cattle market reacted negatively to this morning's news with sharply lower prices at the open. That continued for about an hour. Once the initial shock wore off, traders did the math and realized 661 million pounds discounted imported beef may not have much impact on retail ground beef prices. There's just no guarantee the full amount will be imported, and the supply of live cattle remains historically tight. So sentiment has changed in this market, but supply and demand will eventually win out. August cattle closed 30 cents lower at 223.05, which is where the cash is trading, while December gained 22 and a half cents to close at 218.50. August feeders were down 55 cents at 334.75, while October gained 95 cents to 323.65. So overall, it was a good close today. And we are including the numbers for the cattle and feed report that was released this afternoon. The report will be considered bullish. Uh placements were well below the average trade guess, which was at 93.3%, came in at 89. So look for a higher open on Monday, on Monday. Sorry. Lean Hog Bulls may have dodged a bullet though today too. October Hogs posted a new low for the year, but actually closed back above the previous low and higher for the day. So the market made a higher high, lower low, but the market was a good outcome here. The bulls will need to continue defending uh today's low at 79.675. October did end the day up 60 cents at $80.80. So again, if you have any questions, feel free to reach out. Otherwise, have a great night and a great weekend. We'll talk to you again next week.