Soybeans Rise on Fall in Ratings; Hot and Dry Weather Ahead; EPA Ruling

CME GLOBEX RECAP:

December corn is down 1, November soybeans are up 12 1/2, December KC wheat is up 3, Dec Chicago wheat is up 4 1/2, and MIAX Dec Minneapolis wheat is up 3 3/4 cents.

OUTSIDE MARKETS:

The Dow Jones Industrials Index fell 374 points on Monday and Dow futures are down 317 points early Tuesday. October crude oil futures are up $2.27 per barrel. The U.S. Dollar Index is up .179 and October gold is down $68.20 an ounce.

CORN:

December corn is moderately lower to start as conditions remained unchanged last week with the trade looking for a drop in ratings. The crop is rated at 57% good to excellent with 17% of the crop deemed poor to very poor. That compares to last year’s reading of 69% and 9%, respectively. NASS reported that 92% of the crop is in the dough stage with 62% dented. The forecast ahead is not promising for a good finish to the crop with hot and dry weather for the lower Midwest and southern corn areas. Following months of drought, Kansas and the Dakotas are the worst-rated crops. Corn inspections now total 3.299 billion bushels (bb) and are up 25% from last year with USDA projecting a rise of just 18%. In Brazil, the second corn crop harvest is nearly done at 96% while the first corn crop planting rose 9 percentage points to 11% now. The ongoing reciprocal strikes continue in the Black Sea with Russia said to have hit port infrastructure and a border crossing with Romania. Odesa sea ports, which normally handle 90% of Ukraine exports, have effectively been shuttered. Crude oil is rising again early Tuesday as the U.S. and Iran again resumed strikes. The rise in crude has rekindled inflation fears with the 10-year Treasury yield rising to a 19-month high. Funds have loaded the boat on the long corn bandwagon with a net-corn long estimated to be 405,000 contracts. As more crop tour results start to filter in this week, some analysts are looking for a corn yield in the mid-170s bushels per acre (bpa), which could send ending stocks as low as 1.1 bb to 1.2 bb. DTN’s National Corn Index closed at $4.92 with a corn basis of 46 under the December futures contract.

SOYBEANS:

Soybeans and soy products are up sharply early Tuesday. Soybeans are reacting to the two-percentage-point decline in crop ratings last week, with soybeans rated as good to excellent falling to just 58% compared to 65% a year ago. That portion of the crop rated as poor to very poor also rose one percentage point to 13%. NASS said that 95% of the crop is setting pods. As in corn, the states of Kansas and the Dakotas seem to be the worst-rated following months of drought. The weather forecast ahead is of big concern, with the two-week forecast calling for very warm temperatures that are not conducive to a finishing crop, especially those double-cropped beans. Areas like Arkansas, Kentucky and Tennessee are in dire need of rain. Soybean oil is sharply higher after a volatile few weeks of trade as the EPA released their small refinery exemptions, granting 1.76 billion gallons of renewable fuel credits, but promising to reallocate the difference between projected and actual exempted volumes for 2025. For a more in-depth view of the ruling see DTN Environmental Editor Todd Neeley’s article here: https://www.dtnpf.com/agriculture/web/ag/news/business-inputs/article/2026/08/31/epa-waives-1-76b-gallons-2025-rfs. For the first time in a few weeks, the trade seems focused on soybean yields and the prospect for yield to fall closer to 52 bpa. Such a decline would likely require some rationing in light of China demand picking up, and an already snug carryout of just 320 million bushels (mb). China is thought to have bought 11 million metric tons (mmt) of the 25 mmt pledged back in October. In three weeks, China’s Xi Jinping is expected to visit the White House, and I think we can expect more purchases ahead of that visit. Palm and soybean oil are also higher on the recent reversal in crude oil futures to the upside as reciprocal strikes between the U.S. and Iran resumed after a month of quiet. Funds are also adding to a bullish bet on the soy complex, with the bean long at 226,000 contracts and the combined product net long estimated to be 218,000 contracts. DTN’s National Soybean Index closed at $12.50 with a soybean basis of 38 under the November 2026 futures. Tuesday morning, USDA reported private export sales of 136,000 metric tons of soybeans for delivery to China during the 2026/2027 marketing year.

WHEAT:

After a short-term correction Monday, wheat markets are right back up again early Tuesday. Paris milling wheat futures are up near the contract high, and U.S. markets are moderately higher. The problems for Black Sea wheat exports have no solution in sight, with export capabilities severely restricted. Turkey has attempted to mediate a solution for renewed Black Sea shipments, but so far is not successful. Russian and Ukraine grain export numbers are way down as the result of port infrastructure and vessel damage in the last several weeks. In the U.S., the spring wheat harvest has now reached 77% complete and well ahead of the five-year average pace. In other news Jordan will return for 120,000 metric tons (mt) of milling wheat, having passed on the last tender. Underpinning the market is the idea that wheat importers will be forced to seek non-Black Sea origin wheat to replace supplies from Russia. The Australian government on Monday raised their estimate of that wheat crop to near 30 mmt — up over 3 mmt from their prior estimate. That would still be 6 mmt below last year’s record crop, but would add to the exportable supplies in world where major exporter supplies have headed downward. DTN’s National HRW Index closed at $7.65 and 73 under the December futures board.

Dana Mantini can be reached at Dana.Mantini@dtn.com