Weekly Ag Market News Rewind 9/27/26
China: The U.S. Trade Representative said there would be a press release, perhaps a press conference on Monday with the details about the trade negotiations between U.S. and Chinese officials the past week.
China had a press release on Friday morning, mentioning the need to expand cooperation and to compete and cooperate on AI. Xi's key formula: cooperation as a foundation + competition within defined boundaries + managed disagreements + peace. The goal is "constructive relations of strategic stability," where both countries can help each other achieve success, rather than viewing the other side's success as their own failure.
Lower farmland values have long been considered a competitive advantage for Brazilian agriculture relative to U.S. agriculture. However, strong farm profits, supported by periods of high commodity prices, have contributed to substantial increases in farmland values in both countries over the past two decades. An article compares farmland values in the U.S. and Brazil from 2002 to 2025, using data from Iowa and Mato Grosso, leading soybean and corn producing states.
The gap between the two states narrowed during the commodity-price boom of 2021–2023, when farmland values in Mato Grosso approached those in Iowa. During this period, farm profitability reached historic highs in Brazil, driven by strong international demand, low global ending stocks, the Russia-Ukraine war, and the depreciation of the Brazilian real against the U.S. dollar. This encouraged increased leverage and investments in operations and expansion.
Since 2024, as soybean and corn prices have declined from their recent peaks, farmland values have remained relatively stable in Iowa while declining in Mato Grosso, leaving Iowa farmland values 27% higher in 2025. Brazil’s grain and oilseed farmland market has experienced low liquidity in recent years. The combination of shrinking farm revenues, persistent increases in input costs, and tight credit conditions has created a challenging environment for U.S. and Brazilian crop producers.
In Iowa, the farmland market remains supported by strong farm balance sheets, with 84% of farmland owned debt-free, and farm incomes that remain above long-term averages. Farmland is also viewed as a stable investment amid broader economic and geopolitical uncertainty.
Cattle & Hogs:
U.S. hogs & pigs inventory on September 1 was 74.3 million head, up 1.6% from June, but down 1.5% from a year ago.
Breeding inventory, at 5.87 million head, was down 1% from last year, and down slightly from the previous quarter.
Market hog inventory, at 68.4 million head, was down 1.5% from last year, but up 1.8% from last quarter.
The American Farm Bureau Federation (AFBF) says President Trump’s action to increase beef imports has yet to provide meaningful savings for consumers. AFBF economist Faith Parum says they’ve been tracking ground beef prices:
“Our average price of 41 grocery stores started at about $7.29. We’re only down to $7.13. A small decrease, but not near the 25% reduction in tariffs we saw.
In fact, on average, ranchers are losing anywhere from $300 to $400 per head. It’s not helping the consumer and it’s really hurting our ranchers who are already going through a struggle with a record low cattle herd size, so it’s really not incentivizing them to rebuild the herd either.”
Fertilizer:
President Trump is signaling a potential agreement to purchase lower-priced potash from Belarus, a move that could challenge Canadian exporters. The average cost for red potash fertilizer is $690 per ton, while white potash fertilizer is $744 per ton, according to USDA’s production cost report. This is a jump compared to last year's $670 for red potash fertilizer and $695 for white potash.
Fertilizer analyst Josh Linville of StoneX said he doubts Belarusian potash will play a major role in either supplies for U.S. farmers or in lowering prices that they presently pay:
“Im afraid the impact would be limited. We have not struggled to find potash. We have more than enough to go around. It is phosphate and nitrogen that we need help with.”
Global biofuels output is expected to surge nearly 70% by 2030 from 2025 levels as major producing countries push ahead with raising blending mandates in response to the energy crisis triggered by the Iran war, a study published by London-based think tank Chatham House and non-profit certification group the Forest Stewardship Council. The authors estimate that if all proposed mandates are fully implemented, the land needed to produce biofuel feedstocks could more than double by 2030 compared with 2023 levels. That would require an additional 36 million hectares.
EU & UK 2026 grain crop was projected by COCERAL at 279 million mts, down 8 million from its July forecast and well below last year’s crop of 307.4 million, due to the drought. The biggest reduction was for wheat and corn. COCERAL is the European association of trade in cereals, oilseeds, rice, pulses, olive oil, oils and fats, animal feed and agrosupply.
Every U.S. Government debt instrument except the two-year Treasury note traded at levels with yields more than 5%, as the market is pricing another Federal Reserve interest rate increase on 28 October. The 10-year Treasury bonds traded at prices so low that the yield moved to a 20-year high at 5.2%! Higher interest rates are bearish for the economy for obvious reasons and especially commodities because the cost of storage increases. The higher storage costs are, the less likely grain will remain in storage.
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