DTN Plains, Prairies Opening Comments

DTN Plains, Prairies Opening Comments

GENERAL COMMENTS:

Grain and oilseed markets are extending their (Thursday’s) late day reversals as production concerns seem to be outweighing anxiety over an absence of China demand. Corn has been the leader again, shaking off early weakness Thursday and turning positive for the day. With scattered showers that crossed the Corn Belt providing only slight relief, the updated U.S. Drought Monitor showing greatly expanded areas under drought conditions, little to no relief remaining in sight going out past the middle of September, and a risk of frost for the next few nights for the western Corn Belt, gains have been extended in early trade. It is looking more all the time like seasonal lows are indeed behind the corn market, which is likely inspiring additional buying on its own. For more, see Thursday’s post on the topic at https://www.dtnpf.com/agriculture/web/ag/blogs/canada-markets/blog-post/2025/09/04/harvest-low-already-set-corn-market. Financial markets are eagerly awaiting the August payroll report, due out at 7:30 a.m. CDT while ag markets look forward to the holiday delayed weekly export sales report from the USDA and the CGC weekly grain statistics report.

OUTSIDE MARKETS:

Treasury markets are extending a rally that started with Wednesday’s weak JOLTS report. A weak ADP payroll report and higher than expected weekly jobless claims report Thursday added to anxiety and treasury prices, as expectations have increased for the August payroll report to confirm a weakening labor market. That is the one thing that Jerome Powell has consistently said would inspire the Fed to lower interest rates. The market is currently pricing in one quarter point cut in September and one in October but is very close to a third in December. Friday’s payroll report may well be the deciding factor, despite inflation concerns. Technically speaking, that resulted in the 10-year note rallying off the 25-day moving average with prices currently at levels not seen since April. The weak labor data is aligning with the political will to see interest rates fall, leaving little to prevent such a move. The 30-year bond is still relatively weak on inflation fears, but it too recovered from Tuesday’s losses. The U.S. 10-year note is at 4.15%.

The U.S. dollar is lower after retreating yet again from its 100-day moving average Thursday on additional weak labor data and fears of a weak August payroll report. The report will likely (finally) decide the fate of action around the 100-day moving average for the near future. The Sept U.S. dollar is .369 lower at 97.935.

Equity markets are extending gains with the S&P in record territory yet again on lower interest rates.

Energy markets are quietly lower as concerns persist over the potential for increased OPEC+ production quotas for October from this weekend’s meetings. October crude oil is $.58 per barrel lower at $62.90.

The Sept Canadian dollar is up .00175 at $.72530. The Brazilian real is up .00040 at .18275. December gold is up $2.00 per ounce at $3608.70.

OILSEEDS:

Canola is extending its recovery on bargain hunting from severely oversold levels as buying throughout the grain and oilseed complex helps psychologically. It’s possible Saskatchewan Premier Scott Moe’s trip to China is helping inspire some optimism that the trade dispute is at least getting some attention, a first step at least. Beneficial harvest weather and related producer selling pressure may be priced in for now. November canola is $9.40 higher at $629.60/mt.

Palm oil is quietly higher to end the week. The October contract is up .18%.  

Soybean oil is quietly higher following a significant reversal up from sharply lower levels Thursday. That selloff did finally completely fill the gap higher that had been left in mid-June. The rally seen following suggests buying may have been held back looking for such a move. Regardless of why, prices were able to close back above the 100-day moving average and support at 52 cents, an important technical sign. A leg up from the saucer bottom that’s been years in the making remains as the primary technical influence going forward, despite the gap being filled.

European rapeseed is joining in the recovery efforts with it trying to return to the relatively narrow range seen for most of 2025. November rapeseed is 6.25 euros higher at 458.25 euros per mt.

Soybeans are quietly higher in an extension of Thursday’s late session recovery which resulted in a close back above the 25-day and 100-day moving averages, a positive technical development. With dryness in August often determining yield thanks to seed size, the extreme dryness seen for most of the Corn Belt south and east of Iowa with no relief in sight should provide excellent fundamental support. With the current extended forecasts showing below to much-below normal precipitation going out to Sept. 18, it looks like the production period will end without meaningful rain. It’s worth remembering that a disappointing yield combined with the sharp cut in acres will cement a drop in production while there is plenty of time for export demand to expand, either from China or other global importers that are having trouble sourcing from South America due to added Chinese demand there.  

WHEAT:

Wheat markets are even trying to bounce with the rest of the grains and oilseeds following new contract lows being set yet again Thursday. Even though they are new lows for the December contracts, they are still (barely) above multi-year lows set on nearby contract continuation charts. That may attract some bargain hunting and fund short covering. Friday’s COT report confirmed that between Chicago and Kansas wheat markets, managed money traders had started covering their short positions ahead of the Aug. 26 cutoff, resulting in the attempted bottom formations. They were still net short 130,268 contracts or 651 million bushels. To put that in perspective — the ending stocks estimate for those two categories of wheat is only 548 million bushels. Short covering by this group is likely the best hope for any meaningful rally.

CORN:

Corn is extending gains seen in Thursday’s late session recovery as production concerns from a late season drought and disease pressure combine with exceptional new crop export sales to provide good underlying support. If peak production optimism and price pessimism is indeed behind the market, along with the seasonal low in price, buying of dips may be the new normal. Technically speaking, the sharp rally off support at the 25-day moving average and early August resistance (now support) suggests an attempt by the market to fill the gap lower on July 7 would make sense. It would take a rally to $4.33/bushel in the December contract to accomplish that. Friday’s COT report confirmed managed money traders had reduced their net short position by another 33,964 contracts or 170 million bushels during the week ending Aug. 26 — a clear indication of how serious they are taking the threats to record yield estimates. They remained net short 110,686 contracts or 553 million bushels with plenty of buying potential remaining.

Mitch Miller can be reached at mitchmiller.dtn@gmail.com

Follow him on social platform X @mgreymiller