Rice
Rice futures have continued to climb, setting new contract highs three days in a row to open the week. Carryover support, primarily from wheat futures as reports indicate Russia plans to escalate their war on Ukraine. Food security concerns related to war in both Ukraine and Iraq are supportive. November futures have so far been capped by resistance near $16. Basis levels remain unfavorable with harvest in full swing, averaging over $1/cwt in many locations. According to USDA, the Arkansas crop was 33% harvested as of Aug. 30, but given the hot, dry conditions, harvest should be progressing quickly. USDA says 67% of the remaining crop is in good to excellent condition, but the weather could impact yield and milling yield potential. Asian prices are rising as India faces disappointing monsoon rains, limiting the size of crops.
Soybeans
Soybean futures have mostly been riding the coattails of wheat futures higher as fundamentals are largely unchanged. However, earlier this week EPA announced that it would seek to reallocate all of the biofuels volume lost through increased Renewable Fuel Standard waivers. Futures rallied sharply in reaction to the news, setting a new contract high as November closed above $13 for the first time in more than three years. Hot, dry weather is also sparking concerns about yield potential, particularly in Arkansas and the Mid-south, adding underlying support to the market. In Arkansas, 66% of the crop is rated good to excellent, while 58% of the US crop is rated good to excellent.
Corn
Corn prices gathered strong momentum starting last Wednesday following reports that Russia planned to escalate attacks on Ukraine, sparking a major rally in wheat that quickly carried over into corn and soybeans. Substantial uncertainty surrounds this year’s production, highlighted by Pro Farmer estimating yields at 173.2 bushels per acre, which is significantly below official USDA projections. What stands out in this environment is that this late-season rally places the highest price of the 2025/26 marketing year in August, a rare occurrence that has happened in only 16% of years since 1970. Historically, late-season rallies often peak during harvest in September. In short, producers are witnessing a supply-driven bull market right at harvest time. While current conditions may not track past cycles perfectly, history suggests that these late surges frequently form a major market top immediately before, during or just after harvest.
Cotton
Cotton futures surged higher last week, driven by technical speculative buying alongside persistent fears over a deteriorating U.S. crop outlook. The market established new contract highs, with front-month futures reaching two-year highs while locking in a sixth consecutive weekly gain. Severe heat and drought across West Texas and the Mississippi Delta continue to downgrade yield expectations, while similar hot, dry conditions in China’s Xinjiang region are fueling bullish sentiment globally. Although China has yet to return as a direct buyer of U.S. cotton, any increase in its global imports could create secondary opportunities for domestic exports. Trading has grown increasingly volatile recently, with prices dropping nearly 200 points before mounting a partial recovery, signaling that the market is balancing heavy speculative long positioning against the weight of the impending 2026 harvest.
Wheat
Reports of Russia escalating its attacks on Ukraine ignited a sharp wheat rally, adding fuel to a market where fundamentals were already bullish due to reduced acreage and tightening carryover. With 2026/27 U.S. wheat carryover projected at 702 million bushels compared to 920 million bushels in 2025/26, the market was primed for a breakout. Technically, the active December Chicago contract broke out of a bull flag pattern in mid-August. Measuring from the late-June low through the mid-summer consolidation pointed to an upside projection of $7.83, a target the market has already surpassed by reaching $7.89. While it is impossible to confirm an immediate peak, this supply-driven environment bears watching closely, as late-season market tops of this nature typically feature sudden and aggressive price reversals.
Cattle
Live cattle futures continue to trade lower, having now charted four-straight weeks of losses. Wholesale beef prices have dropped as the U.S. imports ground beef to lower prices. Feeder cattle futures fell for the third week in a row as USDA opened the boarder at Douglas, Ariz. for the importation of Mexican feeder cattle. Sharp gains in corn futures also added pressure. Plains cash cattle prices have also fallen as the supply of market ready cattle is adequate to meet the demand. USDA indicated the Aug. 1 supply of cattle on feed more than 180 days was up nearly 43% from last year. Cattle weights are historically, at least partially as a result. However, higher corn prices should result in lighter weight animals coming to market soon.