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The week ended on a bearish surprise Friday as USDA defied expectations for a cut in its yield estimate, boosting its forecast to 181.2 bushels per acre from 178.5 bushels in September. That meant a larger-than-expected jump in U.S. and global ending stocks, with December corn futures crashing through the $5 level that had provided psychological support after USDA’s last bearish shock, which came Sept. 30 with the quarterly Grain Stocks report. Analysts had expected a 0.7 bushel cut. The drop saw corn briefly touch the daily 30-cent limit before the December contract finished with a loss of 20 ½ cents at $4.79 ¾, down 18 cents on the week.
The Sept. 30 jump in quarterly stocks meant a bigger carry-in for the new-crop year, pushing the stocks-to-use ratio back above 10%. It wouldn’t have taken much of a downward adjustment in yields to get the key ratio back below the 10% threshold, instead the production boost, offset partly by increase demand, pushed above 11%.
The drop in corn futures did technical damage on the daily and weekly charts, likely setting the stage for follow-through selling on Monday.
Soybeans were pressured by a larger-than-expected bump higher in USDA’s yield estimate, but shook off a kneejerk selloff and pressure from corn with November ending the day at $12.92, up 4 ½ cents, after hitting a six-week low.
USDA raised its U.S. ending stocks for wheat more than expected, largely due to a cut in its export forecast. Russia’s export forecast was cut to a five-year low as a result of Black Sea shipping disruptions. December SRW wheat ended 12 ¼ cents lower at $6.71, hitting a two-month low.
December cotton rose 60 points to 80.54 cents despite USDA boosting its cotton crop estimate by 241,000 bales on an unexpected increase in the yield estimate. Concerns about potential damage from Hurricane Isaias (see item below) helped hold the line.
Report Reaction: Corn leads slide after USDA production figures surprise to upside
Russian diesel deal… President Donald Trump on Friday said his administration reached a deal with Russia to supply hundreds of thousands of tons of diesel fuel, easing pressure on Moscow over its war with Ukraine in a bid to bring down the stubbornly high fuel price. Analysts were quick to question the impact of the deal as described by Trump, noting that the amounts discussed remain relatively small compared to U.S. and global flows. Trump, in a TruthSocial post, said Russia agreed to supply over 300,000 tons of diesel fuel into U.S. and global markets, another 500,000 tons in November, and 1 million tons immediately after. He said Russia would also deliver an additional 3 million tons of diesel “within a short period of time” depending on the condition of its refineries.
The Wall Street Journal noted that Russia measures diesel in tons. It said the figures announced by Trump would amount to around 36 million barrels overall. Refineries knocked offline in Russia and the Middle East have left the world short around 1.6 million barrels a day of diesel, the International Energy Agency has estimated. A diesel export ban by Russia has been a major factor in the global diesel shortage that has sent prices to records. Attacks on refineries and shipping by Ukraine have created a domestic fuel crisis and created bottlenecks.
- For global fuel markets, the additional supply could help at the margin, but it remains “well off” the gap in supply faced the near term, Ryan McKay of TD told Bloomberg. “The biggest concern is refiners being able to do it.”
Diesel futures fell more than 4% after the news, but were up 4% for the week, having rallied despite Trump’s executive order on Oct. 5 easing restrictions on the use of untaxed red-dyed diesel.
Hurricane Isaias landfall looms… Hurricane Isaias is expected to make landfall over the Florida panhandle late Friday or early Saturday. World Weather said the storm is expected to drop between 4 and 12 inches of rain into the Florida panhandle into southern Alabama and southeastern Georgia, with rain extending into northeastern Mississippi and the Carolinas. The forecaster warned that open boll cotton in this region is vulnerable to further quality decline and stringing as recent persistent thunderstorms have already affected the Florida Panhandle. Flash flooding may also hurt soybeans and peanuts in the region.
Lowest French wine output of the century… France’s 2026 wine production is projected to hit its lowest level this century at 34.9 million hectolitres due to severe summer heatwaves and drought, Reuters reported. While the latest French farm ministry forecast was upgraded from last month’s 33.9 million estimate owing to late-summer rains in Languedoc-Roussillon, total output remains 2% lower than last year’s depressed harvest and 14% below the five-year average, with Champagne production halving due to extreme weather.