Corn and soybeans are taking support from building doubts over U.S. production estimates as harvest progresses. Later maturing crops are showing more stress that took place from August and September weather. Drought was a factor, but elevated temperatures were also an issue. This has generated overly dry soybeans this year, with many reports of moisture below 8 percent, and caused shatter loss with some farmers reporting losses of 5 to 7 bushels per acre.

Corn has also been impacted, with test weight down in some regions of the U.S. compared to last year, but still close to average. Corn is also seeing heavier disease pressure as harvest advances. Not all areas of the U.S. experienced these losses though, making it difficult to determine accurate yields on either crop.

Interior basis values have started to tighten as country movement of newly harvested bushels remains minimal. Many farmers have already moved as much inventory as they need and are quickly becoming disengaged from the current market. This is especially the case on soybeans where interior basis values have tightened considerably. Corn basis has also started to tighten with half of the crop harvested. While these tighter basis values are welcomed, it will take a recovery in futures to really encourage movement.

This lack of movement is starting to be felt in the end user market. This has led end users to offer incentives for delivery, including deferred pricing contracts. It is questionable as to how much movement this will gain, as the mechanics of these programs allow end users to process inventory without paying for it, greatly reducing any need to push bids. While these contracts are favorable on the front end, the end result can be unfavorable in the cash market.

Soybeans continue to take support from the record-sized September crush report from the National Oilseed Processors Association. September crush was a record for the month at 197.86 million bu, well above trade expectations and last September’s crush of 177 mbu. Even with this elevated crush volume, end of September soy oil reserves were nearly unchanged at 1.24 billion pounds. This shows the market just how strong soy oil demand is right now, mainly for the expanding biofuel industry. The question now is if this demand will require further expansion in the U.S. crush industry.

While political reasons have been credited for the lack of Chinese trade this year, there are other factors. The main one of these is ongoing weakness in China’s economy. China continues to suffer from deflation, as even with lower consumer prices, demand remains stagnate. Two of the greatest decline in consumer costs in China are pork, which is down 17 percent from a year ago, and vegetable prices are down 14 percent. A portion of these lower food costs have been offset with a 4.6 percent increase in beef costs, but overall costs are still down double digits.

More reports of damage to the Chinese corn crop are being seen. Rains have not let up in parts of China with standing corn, not only delaying harvest, but causing quality issues. More reports of standing corn with mold and mildew growing on the grain, making some of the crop unusable. Wheat farmers in China have now halted sales of that grain as it is possible feed demand may increase given damage to the corn crop. While this may not directly impact U.S. corn demand, the ripple effects could boost overall U.S. grain export interest.

China has released its pork production for the third quarter of 2025 and showed a 7 percent increase in output from the same period in 2024. Third quarter pork production totaled 13.48 million metric tons as the country starts culling its hog herd to reach government ceilings. China’s hog feeders have been overproducing pork for several months and this has led to sharply depressed pork values. The main target is a 1 million head contraction in the country’s sow herd. As this takes place, a need for pork imports is diminishing.

U.S. cattle slaughter continues to run below average numbers, but this is again being partially offset with higher cattle weights. The current average U.S. beef carcass weight is 944#, up 27# from a year ago. More steers and fewer heifers are being slaughtered, and this does tend to raise averages. Feeders are again holding cattle longer though as grazing conditions are favorable and feed grains remain cheap. Ongoing tightness in the replacement market is also prompting feeders to hold current inventory longer.

The United States Climate Prediction Center has revised its La Nina outlook, indicating a system is building. The CPC claims conditions are favorable for the development of a La Nina over the winter months, although the event is expected to be on the weaker side and not a major weather factor. The La Nina is then expected to weaken to neutral by March. The odds of this all taking place are 55 percent. A La Nina over this period would normally have little impact on U.S. production, but can be a factor in South America, mainly Argentina.

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