Daily comment for Friday, September 18

Corn held together much better, never more than a nickel lower and closing a couple of cents off its low. Wheat landed in between, down as much as 15 cents at its worst before finishing a few cents off that low, while cotton gave up better than a dollar.

Meal was the standout and it went hard the other way. After taking out its contract high yesterday and trading above 370 dollars a ton, it broke better than 15 dollars off this morning's high.

Word came after the close that the US and China are discussing cutting or eliminating China's 15 percent tariff on US LNG, as part of a broader energy and agriculture package that could be announced while Xi is in Washington next week. We don't have all the details yet, but looks to be something totally different than the talk earlier in the week regarding the grain specific tariff. It would seem net friendly, but again we need more information.

Outside markets leaned the same direction. Crude gave back better than two dollars to finish back under 100, the Dow shed better than a hundred points, and the dollar was all but unchanged.

Key Points/Developments

Technicals: Dec corn worked lower all session without ever threatening much, trading down to 525 1/2 and right into the 525 support area we have been pointing at, then closing a couple of cents above it. That area has now been tested and it held, with 518 underneath and the 50 day average still down in the low 490s. Resistance is unchanged at the 540 area, then 545 and the contract high just under 550.

Nov beans broke down through the 1310 support area and closed under it, trading as low as 1300 along the way before settling a few cents better than that. The 1293 area is the one that matters now, with the 20 day average in the low 1280s and 1250 beneath that. Resistance starts back at the 1310 area they just lost, then 1335.

Spreads: The Dec/Mar corn spread held at 14 cents. The Nov/Jan bean spread came in three quarters of a cent to 16 1/2, its first real narrowing after several sessions of setting a new widest mark for the move. Cash bids have been firming as farmers hold bushels back, and that tends to pull carry out of these spreads.

Weather: TStorm made no changes again today, leaving corn, soybeans, and winter wheat all at neutral for a fourth straight report.

TStorm closing comments:

Rain and thunderstorms keep working across varying parts of the Corn Belt and Plains into early next week, with the heaviest of it setting up in and near northern Illinois and Iowa. Much cooler air follows next week and finally breaks the heat that has been sitting in and near the mid South.

That turn is the piece that matters to us. It is the second day running that TStorm has pointed at harvest wetness getting cut off rather than building, and they are still not buying the wet and expensive harvest everyone has been talking about.

In Brazil, the heavy rain stays focused on southern areas as what is already a very stormy September keeps building, with a wetter period around the first of October due to get soybean planting going in and near Mato Grosso.

Markets/Trading Implications

Not the way anybody wanted to go into a weekend, though it is worth keeping in mind beans closed last Friday on their dead low, so even after today they still finished the week higher.

Everything points at next week. Bessent sits down with He Lifeng ahead of the summit on the 24th, and what is supposed to come out of it is a reaffirmation of the 25 million ton soybean commitment and the 17 billion dollars of other ag purchases, as well as the discussion of course over tariffs.

What would actually be new is corn and wheat. Chinese private buyers have been absent from our grain since early 2025, and our stocks are tight enough that even a modest amount of that business would matter. Notably, today's reporting on the tariff package did not touch the 10 percent duty on grain at all.

On corn, according to news sources/social media, yields coming out of the field keep disappointing, although our customer base has reported more of a mixed bag with some saying dissappointing and others saying better than expected. The other side has not changed, with bushels showing up every week as harvest rolls, and neither one has won that argument yet.

On marketing, for anyone behind our recommendations with bushels that need to come out of the field, this is not a bad spot to get something done. There is real price risk to the downside in the short run, although longer term we still think this market is supported.

Call anytime.

Other Notes

• For the week, Dec corn lost 2 3/4 cents, Nov beans gained 7, Chicago wheat lost 11, and cotton lost 5.06.
• Reporting after the close had the US and China discussing a cut or an outright elimination of China's 15 percent tariff on US LNG, bundled into a broader energy and agriculture package that could be announced while Xi is in Washington next week. The same framework would have each side cutting tariffs on roughly 30 billion dollars of goods, which has been talked about since the first week of the month. Nothing in it addressed the 10 percent duty China still has sitting on US grain.
• China bought another 111,000 tonnes of US soybeans, putting their commitments for the year near 14.5 million tonnes. That still leaves roughly 10 million to buy if they are going to reach the number the administration keeps citing by December 31.
• Russia holds parliamentary elections this weekend, and there were fresh attacks on grain vessels in the Black Sea. The expectation is that once the voting is behind him Putin escalates rather than eases, with nothing on offer toward reopening a corridor, which would put the fighting over grain squarely into October.
• France's corn crop is rated 23 percent good to excellent, a record low and down another three points on the week as the drought there deepens. How much of that turns into US export business is another matter, given the EU's insistence on non GMO corn.

Static Notes

• Commitment of Traders data covering positions through Tuesday, September 15, showed the funds backing away from beans. Corn's net long was all but unchanged at 427k contracts. Soybeans' net long came down 21k to 245k, off the near record set the week before, while wheat flipped from a net long of 4k to a net short of nearly 5k.
• Prices during the corresponding week saw December corn gain 2 1/4 cents, November beans gain 2 1/2, and December Chicago wheat lose 18 1/2. In the three trading days since this report, corn lost 8 1/4 cents, soybeans lost 15 1/4, and Chicago wheat lost 14 1/4.

Have a great weekend!

Clayton and Taylor

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