Weekly Ag Market News Rewind 10/4/26
Quarterly Grain Stocks and Small Grain Summary. The corn inventory posted by USDA added 4 days’ of use to the carryout. Most analysts expect the 2026 corn yield to decline 2 bushels, which would fully offset the increased carry-in. For soybeans the carryover number was 8 million bushels less than the market expected. The wheat carryover was 3 million bushels less than expected. While that is not a friendly number, it sure does not justify wheat losing that much after the report.
China announced tariff reductions on a broad range of U.S. agricultural products on Monday, including corn, wheat, sorghum, soybean meal, and soybean oil, but excluded soybeans. U.S. soybeans continue to face an additional 10% Chinese tariff, which remains a significant obstacle for private Chinese crushers, but not the Chinese government buyers. All the soybeans purchased by China this year have been purchased by the government, and it does not pay tariffs to itself.
The U.S. and China released a list of products that both will consider for reductions of country-specific tariffs. Each list is composed of commodities that had $30 billion in trade in 2024, the year before the current trade war began.
Soybeans had a value of $12 billion in the U.S.-China trade in 2024. So, inclusion of soybeans would have squeezed out hundreds of other items from the list. The soybean exclusion is also consistent with the practice of treating soybeans separately from other products that began with last October's purchase commitment for 25 million tons of soybeans annually.
China's exclusion of soybeans from the list is probably a matter of arithmetic, not some bargaining power play.
Chinese crush plants had 7.96 million mts of soybean stocks as of September 25, highest in 15 years, and there are reports that they may reduce soybean imports in the coming months due to weak feed demand and negative crush margins.
August Crush data by the USDA:
Total corn consumed for alcohol and other uses was 528 million bushels in August, down less than 1% from July but up 4% from August 2025. Usage included 92.6% for alcohol and 7.4% for other purposes.
Soybeans crushed for crude oil was 6.29 million mts (210 million bushels) in August, down 5.6% from July but up 5.9% from a year ago.
Canola seeds crushed for crude oil was 229,809 mts, 2% higher from July and up 16.4% from last year.
Cottonseed once refined oil production was 22 million pounds, was up 16% from July and up 13% from last August.
World food prices rose in September to their highest in nearly four years as logistics disruptions and weather concerns affected crop markets, the United Nations department said.
In a separate report, they kept its forecast for global cereal production in 2026 almost unchanged at 2.979 billion metric tons, 2.1% below the previous year's peak but still the second-largest harvest on record. The world cereal trade forecast was cut by 0.7% from last month, citing lower wheat and maize export expectations amid constrained Black Sea shipping.
EU summer crop yield forecasts remain well below the five-year average and have been further reduced this month by 7% for sugar beet, 2% each for grain maize and soybean and 1% for potatoes. The rice forecast is 3% below average, mainly reflecting poor prospects in Italy. Grassland and fodder production also remains far below average across large areas. Meanwhile, overall sunflower and field bean prospects have improved slightly, according to the EU crop monitor.
The Black Sea:
SovEcon has cut its 2026/27 Russian wheat export forecast by 4.7 million mts to 36.7 million. This would be the lowest level since 2021/22 and 20% below last season. Barley and corn export forecasts were left unchanged at 3 million mts each.
The forecast was lowered as SovEcon no longer expects Black Sea and Azov Sea exports to normalize before 2027, which remain well below normal. Alternative logistics are gradually expanding. Overall, alternative routes in both Russia and Ukraine could add hundreds of thousands of tonnes of capacity per month, while lost Black Sea volumes are measured in millions of tonnes. Without a resumption of Black Sea shipping, infrastructure constraints will continue to limit export growth. In the absence of a political solution, these constraints should eventually support the market.
A significant number of Ukrainian farmers could default and shut down their operations if they do not receive state funding in January 2027, the deputy head of the All-Ukrainian Agrarian Council stated after the European Commission rejected Ukraine's request for €220 million in agricultural aid.
There is a possibility that approximately 30 million mts of agricultural products will not be exported from Ukraine during the current marketing year.
Brazilian farmers had planted 3.4% of their soybean crop as of last Thursday, slightly ahead of the 3.2% a year ago. Despite excessive rainfall in some areas, Parana state remained the early leader in soybean planting, well ahead of Mato Grosso, where fieldwork has yet to gain momentum due to uneven rainfall distribution, AgRural said.
Brazil's first crop corn planting reached 34% in the center-south region, compared with 32% a year ago.
U.S. Economy:
The unemployment rate rose to 4.2% in September, up from 4.1% in August and slightly above market expectations of 4.1%. The labor force participation rate increased to 61.8%.
The U.S. retail inflation was 0.3% month-on-month in August, taking it to 3.4% annual increase in prices.
The S&P Global U.S. Manufacturing PMI rose to 55.9 in September from August’s 53.9. The latest reading was the strongest since May 2022, as output and new orders expanded at faster rates.
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