Summer Blues to Fall Optimism

This Week In Ag #181

Summertime blues just gave way to a back-to-school party.

A month ago, TWIA predicted the next 30 days would determine the fortunes of grain markets for the 2026 season. Boy, have they ever.

While much of the Midwestern corn crop may look good from the windshield, careful inspection between the rows tells a different story. Reports from the Pro Farmer Crop Tour leaked a couple of weeks ago, bringing out the bulls. Too much rain in June compromised root growth and nitrogen utilization. That’s led to undersized ears, unfilled ears and a lack of ears. Strong summer storms brought high winds and hail, which wreaked havoc on many fields across Iowa and Illinois. The result: Pro Farmer projected a 172.3 bu/A national corn yield average. That’s 7.5 bushels below the USDA estimate.

Now corn is on a furious late rally that would make Joe Montana envious.

Corn prices soared 80 cents in two weeks, reaching their highest point in over three years. The all-important December futures price, which sets new crop prices, hit $5.40. That raised local bids above $5, even in inland markets.

Other row crops are getting in on the late-summer party, for a variety of reasons.

Wheat prices just hit their 3-year high, too, driven by the escalating war in eastern Europe. Russia is running short on diesel fuel, which has hampered harvest and transportation, while raising uncertainty for its ability to grow next year’s crop. Russia is the world’s largest wheat exporter, and its shipments are expected to be cut by at least half. Ukrainian harvest logistics and storage capacity are also facing major disruptions, which will cut their exports by more than half.

Soybeans have risen over $1 during the past two weeks, largely based on purchases from China (Remember them?).

Cotton prices now have a 9 in front of them, aided by higher energy prices.

Overall, the world grain supply is still reeling from the historically hot, dry European growing season that slashed output throughout the continent. On top of all this, there’s speculation on how El Niño may impact Brazil’s Safrinha crop.

How high will prices go? With the amount of geopolitical and weather uncertainty in the world right now, who knows. But one thing’s for sure: the market outlook for this fall has sprung renewed optimism. That should put a spring in the step of farmers attending the Farm Progress Show this week.