Weekly Ag Market News Rewind 9/20/26
Brazil:
CONAB increased Brazil's 2025/26 second corn crop by 1.1 million in its September report, but decreased corn exports as more than 3 million mts of corn were shifted from exports to domestic ethanol production. Total production is estimated at 144 million mts, above the USDA’s 141 million.
Brazilian 2026/27 first crop plantings have reached 22% vs. 17% a year ago. The corn crop is projected to reach 148 million mts, up 2.8% from the previous season and marking the largest harvest ever recorded in the country. Domestic demand is expected to continue expanding, supported by steady growth in the feed industry and the rapid development of Brazil's corn-based ethanol sector. Corn exports were forecast at 46.01 million mts in 2026/27, up 5% from the previous season.
Brazil's soybean planted area saw a 1.4% expansion to 49.3 million hectares (121.8 million acres), the smallest increase in 20 years. While total production will grow only 0.7% to 181.6 million mts, below the USDA estimate of 186 million mts.
Soybean exports were forecast to rise 1.5% to almost 118 million mts, supported by strong Chinese demand. But growth is likely to be constrained by the limited increase in Brazilian supply and stronger competition from U.S. soybeans, as the United States is expected to harvest a large crop in 2026/27. At the same time, domestic crushing is projected to rise, supported primarily by expectations of higher soy oil demand from the biodiesel industry.
Brazilian 2025/26 wheat production is estimated at 5.74 million tonnes, down 27% year-on-year, due to a 21% reduction in cultivated area and lower average productivity. Imports are expected to rise to 6.8–7.5 million mts. Brazil's annual wheat consumption is about 12 million mts. It imports most of its wheat from Argentina, Paraguay, and Uruguay, but some years, Brazil imports additional wheat from Russia and the USA.
Fuel & Fertilizer:
Diesel prices are climbing fast, and farmers are feeling it in real time. U.S. diesel prices have surged 60% since the start of the war in Iran. With another 30¢ jump in just a week, the national average for diesel stands at $6.48 per gallon. It’s adding fuel to inflation, and for farmers, it’s hitting at the worst possible time, right in harvest.
But diesel may not be the only input keeping farmers up at night this fall. Fertilizer prices are climbing too, and there are warning signs that a much bigger crisis could be forming beneath the surface, as a sulfur shortage could be next. Sulfur prices have surged more than fivefold, threatening phosphate fertilizer production. With global supply tightening, farmers could face higher prices, or even fertilizer shortages, heading into the months ahead.
Railroad fuel surcharges on U.S. grain shipments have more than doubled over the past year, rippling through the farm belt and raising transportation costs as many farmers also struggle with higher production costs. The average fuel surcharge rate on grain shipments climbed to 48¢ a mile per rail car in the second week of September, up 153% compared with the weighted average a year earlier, according to USDA data. Railroads use surcharges to recover most of what they have paid for fuel and combine them with long-haul freight rates.
With higher per-mile rates, surcharges accounted for 11% of total rail transportation costs for shipping corn and soybeans, compared with 5% a year ago. Growers typically see a weaker basis, whenever railroads pass excess costs on to shippers, such as grain elevators that buy from farmers and ship grain by rail.
Soy Crush: The National Oilseed Processors Association (NOPA) reported its members crushed 205.5 million bushels of soybeans in August, 8.2% more than a year ago, but 3% less than the market expected. Soy oil stocks, at 1.2 billion lbs, were below the expected 1.257, which is down 4.4% from a year ago and the lowest inventory since November 2024.
The Black Sea:
Andrey Sizov from SovEcon reported shipping Russian wheat out of the Baltic Sea (northwest of Russia) instead of the normal routes through Black Sea (southwest of Russia) is not going to work because those ports are near capacity already with other products. Additionally, it costs $40 to $50 per mt more to get the wheat to the Baltic ports. A further complication is Latvia and Lithuania do not want to do Russia any favors.
SovEcon reports the prolonged disruption of feed grains from the Black Sea is being substantially underpriced, with no clear path to normal shipping. They forecast July thru September wheat shipments from Ukraine/Russia combined will only reach 8 million mts vs. 16.2 million mts a year ago and the 5-year average of 18.2 million mts.
Canadian all wheat 2026 production was estimated at 36.1 million mts by StatsCan, 2.1 million mts less than expected. Spring wheat production at 26.5 million mts, down 3.2 million from last year. Durum production at 6.4 million as expected by the market.
Corn production was seen at 16.5 million mts, up 1.6 million from last year.
Canola production at 22.1 million mts, 200,000 mts more than expected.
Soybean production was projected at 7.5 million mts, 300,000 mts more than expected.
Cattle on Feed report had Placements and Marketing categories being the lowest for August since the series began in 1996:
On Feed as 1 August: 100.7% of a year ago, 11.2 million head
Placed on Feed in August: 90.8%, 1.57 million head
Fed Marketings in August: 96.7%, 1.52 million head
China’s President Xi is scheduled to visit the White House on 24 September.
U.S. soybean export sales are off to their strongest start in six years, currently covering 45% of USDA's 2026/27 export forecast. China took 48% of the total volume.
The Federal Reserve increased the Fed Fund rate 25 basis points, from 3.75% to 4%, to fight inflation. President Trump criticized the decision.
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