Grain Spreads: Funds Buy the Dip
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Commentary
Optimism about China drove grains higher today in my opinion following last week’s sell-off. China officially accepted the invitation to meet with President Trump between the 23rd and 25th of September. Secretary Bessent further noted that negotiations have been leading up to the meeting but gave few details. President Trump said, “We intend – we’re not just doing this for our health. We’re going to have some pretty important meetings. We are going to have a lot of different deals. Corn, soybeans, and wheat took notice with fresh buying across the Board. Last week’s pressure in the market flushed out several weak longs, potentially creating a buying opportunity. Harvest was stalled across the Corn Belt this weekend but is starting to make progress again. Cooler temperatures will limit drying in most areas, however. It is too early for harvest delays to be a market factor in my opinion. Weekly corn inspections were strong at 76.3 million bushels, a five-week high and also above the top-end analyst estimate, with Japan being the featured destination. It’s worth noting that cumulative 2026/27 corn inspections of 162.9 million bushels are now 15.9% ahead of this time last year despite the slowing pace of sales for future shipment. Crop conditions for corn at 57% good to excellent, unchanged on the week and 5 points below the 10 year average. Soybeans came in at 58 percent good to excellent, unchanged on the week and three points behind the 10-year average. Moving forward this week, how far will the funds push grain prices into the meeting on the 24th?
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Sean Lusk
Vice President Commercial Hedging Division
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