Howdy market watchers! 

What a week it has been!  Even more so, what a Friday!  The day started with the highly anticipated press conference in Austin with Texas Governor Abbott and US Secretary of Agriculture Rollins regarding the New World Screwworm and the Mexican border.  Cattle markets were choppy leading up to the scheduled 11:30 AM start, but popped before anyone was in front of the cameras.  There must have been a mole in the room that leaked the fact that the announcement was not the reopening of the US-Mexico border and just context around scaled up monitoring of all animals coming across the border and investments in sterile fly facility in Texas, that was already known, and increased inspectors.  

With the press conference starting about 20 minutes after the scheduled time, the news of the day was that the border is not being reopened yet.  Markets surged making a high above Thursday’s high, but failing to make a high above the Wednesday high that, even more importantly, was below the all-time high on Thursday, August 7^th.  While markets closed strong, but off session highs on Friday, the close was right at the new, downward sloping trendline that has now formed over the three, lower highs.  

We will just have to see if this market can make another push next week, but failure to make a high above the Wednesday high, could suggest that we have a top in for now. However, it is impossible to know as every technical story of key reversals lower have been debunked and followed by fresh highs.  

As President Trump and Putin landed in Alaska on Friday afternoon, the Dow Jones was making new, all-time highs followed by some easing into the close.  As of this writing, there was a brief post-meeting press conference with nothing material revealed until other conversations take place with leaders of certain countries.  

In other international tariff news, this past Monday’s deadline of the prior 90-day extension of escalated tariffs on China, was extended by Trump at the 11^th hour kicking the can down the road another 90-days.  Of course, the web of foreign negotiations is all connected as every inch gained or given with Russia or China makes the other conversation change. It’s just like China’s announcement on Tuesday of anti-dumping duties on Canadian canola as well as pea starch in response to Ottawa’s announcement of tariffs on electric vehicle imports from China last August.  While that stands alone, it is definitely signaling to the US that import restrictions in one sector will be answered by restrictions on critically important products in other politically sensitive sectors such as agriculture.  

US grain exports have seen a notable pick up while old crop exports have seen net cancellations.  There has yet to be any direct purchases of US agriculture products by China, which will certainly be chips on the table whenever that negotiation nears towards the end of the next 90-day extension.  China will be watching closely how discussions with the US and Russia go on Friday as it is a playbook on their plan to eventually make a move on Taiwan. The similarities between these situations are eerie with China taking notes on global reaction to Russia’s advances on the Ukraine.  Negotiations between the US and Russia are also relevant to India as well as China when it comes to secondary tariffs on energy and other trade.  

Also critical to global economic trends is the progress of US inflation and the corresponding response of the Federal Reserve’s FOMC on interest rates.  We will hear more about this at next week’s Jackson Hole hosted by the Kansas City Fed, which starts Thursday.  New data points this last week on consumer and wholesale price inflation shed new light on the progress of reducing inflation.  On Tuesday, July CPI was reported at an annual increase of 2.7 percent, which was less than expected.  However, producer price inflation, which tracks the wholesale cost of goods and services, increased a whopping 3.3 percent year-over-year and 0.9 percent month-over-month and was the largest increase in 3 years.  

With all the talk that tariffs haven’t showed up in the inflation data, this could be the first data point suggesting that the delayed impact is now here.  However, will it be a one-time increase as many economists suggest or prolonged?  Time will tell and much will depend on the various border restrictions and tariffs.  Grain markets are doing their part to lower inflation with corn and wheat continuing to be under immense pressure that finally showed a touch of life to finish the week led by soybeans then corn with wheat remaining a sleeper.  

USDA’s monthly WASDE and Crop Production reports released Tuesday had plenty of shock and awe to provide fresh fodder for the bulls.  US corn production expectations were calling for an increase of USDA’s previous yield forecast of 181.0 bushels per acre (bpa) with the highest end of the range 188.1 bpa for an average guess of 184.3 bpa. And then the USDA announced a mega 188.8 bpa versus last year’s 179.3 bpa.  That brings total production to 16.742 billion bushels with nearly 2.0 million more harvested acres announced as well!  Wow!  While that was much larger than expected, the market’s reaction showed that a big, a huge crop was somewhat priced in and that the bears were getting fatigued after making new lows on report day and growing concerns of diseased areas.  December new crop corn closed at the high on Friday up 7 plus cents with more upside expected next week.  The US dollar sold off Friday back to the trendline below, which helps as will more news of export sales next week.  

There was also a sizeable surprise for soybeans with 2.4 million acres less of harvested acres despite an increase in yield from 52.9 bpa to 53.6 bpa.  Soybean futures started the week around $9.85 and traded to a high near $10.50, holding most of those gains through Friday’s close above $10.42.  The chart gap from July 3^rd filled and we need some China purchases to make it more interesting for the bulls.  NOPA soybean crush released Friday was solidly above expectations and 7 percent above July last year and is supportive from demand side. Watch for the 50-day moving average to cross over the 200-day moving average, the so-called golden cross, for more bullishness ahead.  

US corn and soybean conditions were one percentage point lower than last week, but in line with expectations.  Next week’s Pro-Farmer row crop tour will be closely watched for any yield surprises.  

Spring wheat conditions increased a percentage point above last week and expectations while winter wheat harvest was two percentage points behind expectations, now at 90 percent complete.  The wheat market had an okay close on Friday and at least didn’t make new lows.  A rally in corn will help as wheat crops are increasing in production expectations around the world.  

If you’re tired of sitting on physical wheat and paying storage and interest on money that could be paid down if you sold your wheat, we have a strategy for that! Sell your wheat for $4.80 per bushel or whatever your local bid is and buy a call option with only 7 percent of those funds.  That gives you 93 percent of your grain check to spend on paying expenses or loans at 9 percent.  Do the math or call me and we’ll do the math.  You will not be able to un-see it especially with these high interest rates.  

In USDA’s reports, wheat production was slightly below last month’s figures, but above expectations, ending stocks for the 2025/26 marketing year were lower than expected in the US and globally. Eventually, that should provide some support.  Both Chicago and KC wheat futures have yet to break the $5.00 level and I believe we will see a bounce before we see that, but beware as that could still be coming. 

Sidwell Strategies is the one-stop shop to protect cattle with futures, puts, LRP or a combination of all, which is probably the best strategy overall.  If you’re ready to trade commodity markets, give me a call at (580) 232-2272 or stop by my office to get your account set up and discuss risk management and marketing solutions to pursue your objectives.  Self-trading accounts are also available.  It is never too late to start and there is no operation too small to get a risk management and marketing plan in place.  

Wishing everyone a successful trading week!  Let us know if you'd like to join our daily market price and commentary text messages to stay informed!

Brady Sidwell is a Series 3 Licensed Commodity Futures Broker and Principal of Sidwell Strategies.  He can be reached at (580) 232-2272 or at brady@sidwellstrategies.com.  Futures and Options trading involves the risk of loss and may not be suitable for all investors. Review full disclaimer at https://www.sidwellstrategies.com/fccp-disclaimer-21951.