After a rally in soybeans on Thursday, a sharp drop was seen Friday morning.
What caused either is to be debated, but it probably has a lot to do with positioning ahead of the September World Agriculture Supply and Demand Estimates at 11 a.m. on Friday.
ADVERTISEMENT
Just prior to that report, Randy Martinson, president of Martinson Ag Risk Management, analyzed movements in the markets with Jamie Dickerman of the Red River Farm Network during the Agweek Market Wrap.
What Martinson expects to see in that report is some amount of reduction in corn yield, simply because conditions have worsened since the August report.
“So with that, I would expect a small decrease in yield,” Martinson said. “I don't think we're going to see anything where the Pro Farmer dropped at seven and a half bushels, but I think we could drop corn yields about a bushel, maybe two bushels.”
He expects the report to be neutral to maybe a little negative. He expects USDA will not make a major cut at this point.
As for soybeans, he does not expect much of a change.
“But that sets us up then for better reports down the road,” Martinson said.
What will make some movement is a reduction in corn yield. If it comes in at 178.5 bushels an acre or lower, it’s friendly to the market. For soybeans, 52.5 bushels an acre seems to be the number that could set the tone. Anything more or less will cause a reaction, and it could be swift.
ADVERTISEMENT
Part of the rally seen on Thursday came from news of China coming in once again to buy 1 million metric tons of soybeans. Demand was also seen in corn as Mexico also made some purchases this week. The demand in grains has finally pushed weather out of the frame.
“Now, the only thing that will really matter is if we start getting rain as we get into the harvest of soybeans and corn, and that might delay harvest and cause some quality concerns,” Martinson said. “But at this point, you know the weather is becoming a backseat.”
Dickerman mentioned how wheat has not held onto the headlines quite like soybeans. Martinson agreed that wheat has been trading based on headlines. He does not expect any news from the WASDE report to move wheat. It’s more likely that movement would come from the small grains summary expected at the end of the month.
In that case, eyes will be on expected decreases in exports from Russia and Ukraine. He also expects to see production increases in Australia and Argentina.
Dickerman bought up the impact that record-high crude oil prices are having on markets. Martinson said crude oil is often a leader. As tensions flared up this week, crude oil rose once again. That brings concerns for all the commodities that are reliant on harvest and shipping mostly using diesel fuel.
“Well, it's hitting at the wrong time,” Martinson said. “As Brazil's planting, the U.S. is harvesting. The diesel consumption is rising sharply, and we're looking at record high prices.”
The cattle market saw some returning strength this week. Martinson expected to see more retracement, but cash is helping to lead again.
ADVERTISEMENT
“So overall, the cattle actually had a really good week after seeing some dismal weeks ahead of them behind us,” Martinson said.
After the September WASDE is released, Martinson said eyes will be on harvest season, which is fast approaching.
“Everybody's combining, whether it be up, you know, corn and soybeans are being combined up here in North Dakota, all the way down into or over to Illinois,” Martinson said. “So we are going to be seeing harvest results that are going to kind of take the lead and kind of drive this market next week.”
(The Agweek Market Wrap is sponsored by Gateway Building Systems.)
Facts Only
* Soybeans rallied Thursday and dropped Friday morning.
* The World Agriculture Supply and Demand Estimates (WASDE) report is scheduled for Friday at 11 a.m.
* Randy Martinson is the president of Martinson Ag Risk Management.
* Jamie Dickerman is with the Red River Farm Network.
* China purchased 1 million metric tons of soybeans.
* Mexico made corn purchases this week.
* Record-high crude oil prices have coincided with rising diesel consumption.
* Brazil is currently planting while the U.S. is harvesting.
* Production increases are expected in Australia and Argentina for wheat.
* Export decreases are expected from Russia and Ukraine for wheat.
* Cattle markets showed strength this week.
* Harvest is currently occurring in North Dakota and Illinois.
Executive Summary
Agricultural markets are currently reacting to a combination of international demand and anticipation of the September World Agriculture Supply and Demand Estimates (WASDE) report. Recent volatility in soybeans followed a rally driven by a 1 million metric ton purchase from China, while corn demand was bolstered by purchases from Mexico. Market analysts suggest that weather concerns have largely receded, shifting focus toward harvest results and official USDA yield estimates.
There is uncertainty regarding the exact impact of the upcoming WASDE report, though expectations lean toward a slight reduction in corn yields—potentially by one to two bushels—while soybean estimates are expected to remain relatively stable. Beyond yield data, external economic pressures are mounting; specifically, record-high crude oil prices are increasing the cost of diesel fuel during a critical period where U.S. harvesting and Brazilian planting overlap. While cattle markets have shown recent strength, the broader grain market remains sensitive to specific yield thresholds, such as 178.5 bushels per acre for corn and 52.5 for soybeans.
Full Take
The strongest version of this narrative is a professional market briefing that synthesizes technical yield thresholds, geopolitical trade flows, and macroeconomic energy costs to provide a roadmap for short-term price action. It correctly identifies the interdependence of global agricultural cycles, such as the friction between U.S. harvest and Brazilian planting.
The narrative operates on the paradigm of "market signals," where the primary reality is not the crop itself, but the *expectation* of the report about the crop. This creates a loop where the WASDE report acts as a catalyst for volatility regardless of the actual data, provided that data deviates from the perceived "number" (e.g., 178.5 for corn). The unstated assumption is that the USDA's reporting is the definitive truth-source for the market, effectively granting a government agency the power to trigger "swift" market reactions.
The second-order consequence is the vulnerability of the producer to energy shocks. By linking crude oil prices to diesel consumption during harvest, the narrative reveals how geopolitical tensions in oil-producing regions can directly erode the profit margins of a farmer in North Dakota. The benefit of this information accrues to those with the liquidity to pivot their positioning before the 11 a.m. report; the cost is borne by those locked into higher input costs.
Patterns detected: none
Counterstrike Scan: A coordinated campaign would use this data to trigger panic-selling or artificial hoarding by amplifying the "swift reaction" warning to create a self-fulfilling prophecy of volatility. The actual content remains a standard market analysis and does not match this pattern.
Bridge Questions:
1. How does the reliance on a single government report (WASDE) create systemic fragility in commodity pricing?
2. In what ways does the overlap of Southern and Northern hemisphere planting/harvesting cycles create a global "choke point" for energy costs?
3. What independent data sources exist that could challenge or confirm the USDA's yield estimates before they are released?