Even though the U.S. growing season is over and harvest is underway, weather remains very much a factor in daily price discovery. The record strong El Nino event is disrupting global weather patterns and causing mixed production outlooks. Planting is taking place in Brazil on both soybeans and the first corn crop. While planting started out ahead of the normal pace, planting has slowed as more regions of Brazil claim to need rain. Drought is already a concern in India where light monsoon rains have led to lower input demand, and in turn means smaller crops. Excessive rain is an issue in other regions, mainly China.

In the United States, the most weather concern right now is the rain delays we have seen to harvest in some regions. This is more of a factor for cash markets and led to more quick ship incentives in today’s session. Soybeans saw the greatest basis strength, with some crushers tightening basis 80 cents in the past week to draw in bushels. Rising transportation costs due to the spike in diesel costs also limited selling interest. If transit costs continue to rise, they will start having a negative impact on cash markets as high fuel costs are passed back through the processing market.

China’s soybean imports for the month of August were down 12 percent from a year ago at 200,497 metric tons. Year-to-date Chinese soybean imports from the U.S. total 10.66 million mt, a 34 percent decline from last year. U.S. and China trade is building though and the gap between years will start to narrow. China has imported 55.14 mmt of Brazil soybeans since Jan. 1, a 5 percent increase from last year.

There is a noticeable spread taking place in Chinese red meat imports. China imported 4.5 percent less beef in August from July, and 19 percent less than in August 2025. Year-to-date Chinese beef imports are up 8 percent, however. Chinese importers are trying to get as much coverage as possible before government quotas are placed. China has imported 29 percent less pork than a year ago as the country continues to cull its domestic hog herd at the same time consumer pork demand has softened.

Some interesting numbers are coming out on China’s feed production and demand. China’s total feed production in August was 31.24 mmt, an increase of 4.5 percent from July and 3.2 percent more than in August 2025. Compound feed production was up 4.3 percent, and concentrated feed production was up 7.2 percent.

Corn inclusion in Chinese feed rations was down 1.7 percent in the month though and is now 28.8 percent of rations according to Sitonia Consulting. This is the lowest corn usage level since September 2023. China has an ample supply of feed wheat and is using that in rations over corn. China has also been an active importer of alternative feed grains, including sorghum and barley. China’s feed rations currently contain 13.4 percent soy meal, steady from a year ago.

The September cattle on feed report showed a slightly smaller U.S. cattle herd than expected. The U.S. cattle herd was 11.2 million head on Sept. 1, 101 percent of a year ago. Trade was expecting a 2 percent increase in the cattle supply. August placements were also less than expected at 1.65 million, 9 percent fewer than last August. This was also below trade estimates. August marketings were the lowest for the month on record at 1.52 million, 3 percent less than a year ago.

The number of cattle in the U.S. milking herd continues to increase. At the end of August, the United States had 9.71 million head of cattle being milked, a sizable 15,000 head increase from July. This is also a 167,000 head increase from August 2025. These cows added 2 percent to the U.S. milk supply, keeping prices under pressure. A decline in beef replacements due to declining pasture conditions and high-priced feed grains are currently pushing more animals into the milk herd.

There is an interesting development starting to take place in global beef trade, mainly trade with China. China has set beef import quotas for sources they do business with, and some of these are already being met. Two of the main ones are Brazil and Australia who are at 100 percent of allowed trade. There are others who are out of exportable beef but have room left on their quotas. The main one is Uruguay who has only sold China 31 percent of its 324,000 metric ton allowance. As a result, Brazil and Australia are seeking a way to use Uruguay’s quota for their own sales.

China has seen its cattle values climb 11 percent in the past year from industry improvements and culling, but beef values are up 13 percent on added demand. China’s government wants to support its cattle feeders but also provide cheap beef.

The Sept. 1 U.S. hog and pig inventory report showed a lower hog herd than expected. As of Sept. 1, the United States had a hog herd of 74.3 million, 2 percent less than a year ago. Trade had been expecting a 1 percent decline. The U.S. breeding herd was down 1 percent at 5.87 million head, and the market herd was down 2 percent at 68.4 million head. The June to August U.S. pig crop was 34.5 million head, a 2 percent decline from the same period last year.

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