August 20, 2026
Grain Overview
You can tell by the morning grain trade that things did not go well for the Pro Farmer Tour going through Iowa and Illinois. Corn breaching 5.00 overnight, along with soybeans and wheat making new weekly highs, reveals that the yields are not stacking up. The only negative thing developing is that everybody is becoming aware this is not a regional problem anymore, but a complete Corn Belt yield issue where we could have another sub-180 BPA crop. Ironically, the 10-year national average has been around 176 BPA, and the talk is becoming that the yield could be near 178, still making it the third-largest corn yield ever grown. But on the S&D sheets, the carryout continues to decline toward concerning levels.
The tour found an Illinois corn yield around 15 BPA below last year’s 199.6 and also below the five-year average of 199.15. Soybean pod counts were off 3.3% from last year, but still about 3% above the five-year average. Meanwhile, the tour rolled through the western third of Iowa, finding a corn yield of 190.7 BPA, close to the five-year average but still below last year. Soybean pod counts were also near the five-year average but below last year’s record. The tour continues through eastern Iowa today and southern Minnesota as everyone heads toward Rochester, Minnesota. Pro Farmer will release its final yield estimate late Friday after the markets close.
Wheat futures pushed higher again this morning, with French milling wheat up around €4.00/MT as countries like Tunisia and Egypt begin moving away from Black
Sea-origin wheat after being notified by Russia of its inability to make transit. Their first stop for shopping will likely be European wheat of either German or French origin. As French milling wheat rises, remember wheat is fungible. Higher European values put upward pressure on US wheat to keep our exports from accelerating and maintain our current carryout of just over 700 Mil Bu. If a purchase is announced out of the US Gulf, it could create an explosive move in US wheat values.
The grain trade has seen an elevated price move this week, and as always, when markets push to new highs, you find not only willing profit-taking but actual cash movement that adds to the stalling effect. It’s been a long time since old-crop corn holders have been rewarded for hanging on late in the season and getting an opportunity to capture profitable cash values.
So be leery of an initial price stall for December corn just under 506.6 and November beans near 1256.4. These are both contract highs for the year. They will likely get bested, but the first attempts usually create a bit of wiggle.
Cattle Overview
Yesterday’s cattle trade put in a disappointing close after Monday and Tuesday tried to mount a recovery rally and put a better face on the trade, especially with the Fort Morgan, Colorado, plant reportedly coming back online the first week of September. Yesterday’s lower settlements had October cattle settling at their July 27 low-watermark price, while feeder cattle fell through their levels. The cattle trade remains on a bearish run as packers have now found the upper hand, despite boxed beef values that have improved. A weakening board is pushing for a lower cash cattle trade this week.
There was some light negotiated cattle trade reported yesterday, with Northern dressed sales at $355-$360, off $2-$13 from last week, while the Western Corn Belt did have some sales at $225, which is off $3-$5. Reports of $225 offers in the South were passed. Boxed beef had Choice up $3.84, but Select declined $2.12 in the afternoon trade. Packers are now making money with the cash cattle trade off $30 since May, while boxed beef is back near the better price levels of the year. Packers are even telling feedlots that prices will be lower next week, which is gutsy, but for now they have the leverage.
The feeder index yesterday morning was off $1.19 at $342.36. August feeders continue to chase it lower, with resolution day still 11 calendar days out. Feedlot buyers have now finally tightened up and are not talking about how there’s no cattle out there. At least not very loudly anymore. Friday’s COF report is seeing estimates that placements will come in at 93%, while feedlot inventory is expected at 102%, with heavy cattle again creating inventory numbers. A marketing rate of 93% is also expected.
By the numbers, if October cattle fail to hold the 215-216 range, which is significant, then 210 becomes the next target. October feeder cattle are in the same situation, with 320 important support that is now under attack. The 306 level had been a longer-term target but could come into play much sooner than expected. These numbers play against last fall’s low at 299.52.
Liquidation runs always do one thing very well, and that is go too far and overshoot on the board the price realities that develop later. Today’s close appears a long way off, but if cattle can sustain yesterday’s values after whatever chaos is thrown at the session, then we might finally be reaching levels that can create a base.
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