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FRIDAY, OCTOBER 2, 2026   |   SPECIAL REPORT & ANALYSIS

MARKET PERSPECTIVE  |  WEEKLY COMMODITY REVIEW

Corn Stocks Shock Leads Broad Crop Selloff as Soybean Oil and Livestock Hold Firmer

Harvest supplies and uneven demand outweigh trade hopes heading into October

Analysis  ·  October 2, 2026  ·  Futures through Friday, Oct. 2

Agricultural markets ended the week of Oct. 2 with a sharper divide between struggling crop futures and comparatively resilient livestock. Corn suffered a major setback after USDA reported more old-crop supplies than traders expected. Soybeans and soybean meal surrendered ground despite encouraging export business, wheat extended its retreat, and cotton’s Friday recovery recovered only a fraction of its weekly losses.

Soybean oil moved against the broader crop decline, while cattle retained most of the previous week’s advance. December hogs finished higher, but their rebound followed a contract low Thursday, leaving considerable doubt about whether a lasting recovery had begun.

The change from the previous week was pronounced. Last week’s Sept. 26 recap described soybean, cotton and cattle gains supported by China trade optimism, harvest disruptions and tighter prospective livestock supplies. This week, expectations of improved agricultural trade encountered the harder tests of implementation, actual purchases and available inventories.

Based on Friday’s settlements, corn fell approximately 5.8% for the week, soybean meal 6.3%, cotton 4.5% and soybeans 3.1%. Wheat losses ranged from roughly 2.2% to 3.5%. Meanwhile, soybean oil gained about 1.1% and December hogs 1.6%, while live and feeder cattle declined less than 0.4% (see Table 1 and Figure 1).

CORN: STOCKS SURPRISE CHANGES THE STARTING POINT

December corn closed Friday at $4.97¾ per bushel, down 4½ cents for the day and 30½ cents for the week. Its weekly low close left the market technically vulnerable heading into the next trading week.

Wednesday’s USDA Grain Stocks report provided the central bearish development. Sept. 1 corn inventories totaled 2.095 billion bushels, compared with the 1.924 billion-bushel average expectation in the Dow Jones survey reproduced by The PRICE Futures Group. The result exceeded even the upper end of that survey’s forecast range (see Figure 2).

That changes the supply cushion entering the new marketing year. Additional beginning stocks can offset part of a smaller harvest, reducing the urgency for buyers to secure supplies on concerns about disappointing yields. October’s production estimate still matters, but it now must be evaluated against a more comfortable starting inventory.

The stocks surprise also requires care in interpreting demand. Quarterly stocks measure grain remaining; feed and residual use is calculated within the broader balance sheet. A disappointing residual calculation does not independently establish that livestock feeding collapsed or that elevators misclassified early-harvested corn. Such explanations require evidence beyond the price reaction.

Export demand offered some support. The Oct. 1 report, covering the week ended Sept. 24, showed corn net sales of 536,000 metric tons (mt) and shipments of 1.445 million mt. Those shipments demonstrate continuing movement, but the new bookings were insufficient to overcome the inventory shock.

Harvest adds another layer of pressure. USDA reported corn harvesting 18% complete as of Sept. 27, matching the five-year average. Local weather delays can strengthen nearby basis by interrupting deliveries, even while national futures fall on a larger supply estimate (see Figure 3).

For the coming week, the ability to regain and hold $5 will be an initial psychological test. A stronger recovery would require a combination of improved demand, a less bearish production outlook and evidence that selling pressure is being absorbed.

SOYBEANS: BETTER SALES CANNOT PREVENT A WEEKLY RETREAT

November soybeans finished at $12.78¼ per bushel, down 5¾ cents Friday and 40¾ cents for the week, after touching a four-week low.

The decline was especially revealing because soybeans received more favorable inventory news than corn. USDA placed Sept. 1 soybean stocks at 315 million bushels, below the surveyed average expectation of 323 million. Nevertheless, the market could not sustain a rally.

Export business also improved. Weekly net sales reached 1.034 million mt, including 589,400 mt to China. Those bookings are meaningful, but the reporting period ended Sept. 24 — before the Sept. 27 announcement of the new trade recommendations. They should therefore be distinguished from purchases generated by that announcement.

China’s recommended import list included soybean seed but omitted ordinary commercial soybeans. That limited the immediate benefit to the principal U.S. soybean export market and disappointed expectations for broader access.

The week’s trading suggests that better sales and relatively tighter old-crop stocks were already insufficient to counter harvest-season selling and liquidation of bullish positions. New demand must be large enough to absorb incoming supplies, rather than simply confirm business traders had anticipated.

Domestic processing remains an important support. USDA’s Oct. 1 Fats and Oils report showed August soybean crush of approximately 210 million bushels, compared with 222 million in July and 198 million a year earlier. Processing remained stronger than the previous year despite the monthly decline.

With soybean harvest only 17% complete as of Sept. 27, substantial supplies still must move through the system. The distinction between local shortages and national availability remains important: processors can pay attractive nearby premiums during delivery interruptions without establishing a sustained futures advance.

SOYBEAN OIL: THE STRONGEST PART OF THE SOY COMPLEX

December soybean oil settled at 68.62 cents per pound, up 124 points Friday and 78 points for the week. Friday’s 1.24-cent advance more than accounted for the weekly gain.

Oil’s strength contrasted sharply with losses in beans and meal. That divergence reflects different demand channels: soybean oil serves food and fuel markets, while meal depends primarily on animal feeding.

USDA’s processing report offered a supportive inventory development. August ending stocks of crude soybean oil were approximately 1.279 billion pounds, down from 1.498 billion in July; once-refined stocks also declined. These are August figures released this week, rather than a measurement of current October availability.

Lower inventories provide a firmer foundation for oil than a rally based solely on expectations. Still, the weekly gain does not by itself establish that fuel demand accelerated this week. Actual consumption, processing margins and policy implementation will determine whether oil can continue outperforming.

For crushers, stronger oil values help offset weaker meal revenue. Cheaper soybeans also reduce raw-material costs. The combined effect matters more than the direction of any one contract: an oil rally can support processing economics even when bean futures are declining.

SOYBEAN MEAL: LIQUIDATION MEETS A GROWING SUPPLY RISK

December soybean meal closed at $347.50 per short ton, down $5.80 Friday and $23.50 for the week, after reaching a four-week low.

Meal posted the largest percentage decline among the supplied contracts. Its deteriorating chart pattern and long liquidation indicate that traders became less willing to pay for the supply concerns that had supported the market earlier.

The latest USDA processing data showed soybean cake and meal stocks of approximately 452,530 tons at the end of August, up from 366,931 tons in July. That historical inventory increase adds context to the market’s concern about product availability as harvest supplies reach crushers (see Figure 4).

The longer-term relationship with oil is consequential. If oil demand makes crushing attractive, processors produce additional meal along with the oil. Meal demand must then expand sufficiently to absorb that output. Oil strength can therefore support soybean processing while leaving meal under pressure.

For livestock producers, this week’s cheaper corn and meal offer prospective feed-cost relief. The benefit will emerge unevenly because delivered feed prices also depend on basis, freight and previously contracted purchases.

WHEAT: SMALLER PRODUCTION FAILS TO HALT THE DECLINE

All three major wheat classes finished lower for the week:

December SRW wheat: $6.83 per bushel, up ¼ cent Friday, down 20¼ cents for the week.

December HRW wheat: $7.35¼, down 2¼ cents Friday and 26¾ cents for the week.

December spring wheat: $6.98, up 1¼ cents Friday, down 15½ cents for the week.

USDA’s Small Grains Summary confirmed a substantially smaller U.S. harvest, placing all-wheat production at approximately 1.53 billion bushels, down 23% from 2025. But the survey comparison showed winter wheat production above expectations, limiting the report’s bullish impact.

This illustrates why a smaller crop does not automatically produce higher futures. Markets respond to changes relative to expectations, as well as the ability of available supplies to satisfy demand.

Cheaper corn adds pressure by reducing wheat’s attractiveness in feed rations. The stronger dollar cited in market commentary also raises the cost of U.S. wheat for foreign buyers, making export competitiveness more difficult.

The wheat-class spreads moved in opposite directions. HRW’s premium over SRW fell to 52¼ cents, from 58¾ cents a week earlier. Spring wheat’s premium over SRW widened to 15 cents, from 10¼ cents the previous Friday—an increase this week, following the substantial compression described in last week’s recap.

That distinction matters: HRW again underperformed Chicago, while spring wheat held up somewhat better. The market was adjusting individual class premiums within a generally weaker wheat complex (see Figure 5).

Winter wheat planting was 27% complete as of Sept. 27, versus a five-year average of 34%. Moisture can improve establishment prospects, but excessive rain can delay seeding. The effect on prices depends on whether favorable soil moisture ultimately translates into timely planting.

SORGHUM: TRADE POTENTIAL REMAINS AHEAD OF ACTUAL BUSINESS

Sorghum continues to face a demand problem that China trade announcements have yet to resolve.

The latest weekly export figures showed net sales of just 2,200 mt, bringing 2026/27 commitments to approximately 44,600 mt, versus 477,800 mt at the comparable point last year—a shortfall of roughly 91%. Last week’s recap reported commitments of 42,400 mt, underscoring how little the total advanced (see Figure 6).

China’s recommended product list includes commercial grain sorghum. That offers a potential route to improved competitiveness, but inclusion is not equivalent to an effective tariff reduction or an export sale.

Meanwhile, falling corn futures lower the competing feed grain’s price. Without stronger export demand, sorghum has limited scope to command a premium from domestic feed users.

The most useful evidence of improvement will be sustained bookings accompanied by stronger local basis. A large percentage increase from today’s depressed export base could make an impressive headline while still leaving total demand far behind last year.

RICE: DOMESTIC TIGHTNESS SUPPORTS OUTLOOK DESPITE HARVEST PRESSURE

Rice retains a different supply foundation from corn. Early-week trading gave back some of the preceding rally, according to The PRICE Futures Group, as harvest supplies continued moving into the market.

USDA’s September outlook estimated all-rice production at 158.2 million hundredweight, a 33-year low, and projected ending stocks at 40.4 million hundredweight, down 31% from the previous year. However, beginning stocks were a 40-year high, cushioning the smaller harvest.

That combination supports prices without establishing an immediate physical shortage. Buyers can draw on carry-in inventories as the new crop becomes available.

Demand supplied encouragement this week. Rice net export sales reached 150,600 mt, while shipments totaled 85,600 mt. National harvest was 80% complete as of Sept. 27, compared with a five-year average of 69%.

The distinction between rice classes remains essential. Last week’s recap emphasized the tight long-grain outlook; stronger sales involving buyers such as Japan and South Korea should not automatically be interpreted as relief for every segment of the U.S. market.

For producers, the key question is whether tighter supplies strengthen actual mill bids as harvest pressure passes. International competition will constrain how far U.S. prices can rise without discouraging export customers.

COTTON: FRIDAY’S BOUNCE LEAVES THE WEEKLY DAMAGE INTACT

December cotton finished at 78.88 cents per pound, up 112 points Friday but down 376 points for the week. The recovery followed a three-month low earlier in Friday’s session and Tuesday’s limit-down close.

The scale of the weekly decline indicates that supply concerns were overwhelmed by selling pressure and demand uncertainty. Friday’s short covering improved the close, but it did not reverse the bearish trend.

Texas A&M’s Cotton Marketing Planner reported 35% of the crop rated good to excellent, with harvest and boll opening ahead of their five-year averages. It also warned that widespread Texas rain could degrade lint quality at this stage of the season.

Weather therefore presents a quality risk as well as a quantity risk. Producers may face discounts for damaged lint even if national production changes little.

Weekly upland export sales of 202,600 running bales provided business, but Texas A&M reported shipments continuing below the pace needed for USDA’s export target. That leaves the market dependent on stronger mill buying and execution of existing sales.

Lower futures can encourage purchases, but mills also consider textile orders, financing costs and currency movements. A lasting recovery requires commercial demand to follow the price decline.

CATTLE: MODEST WEEKLY LOSSES PRESERVE MOST OF THE PREVIOUS ADVANCE

December live cattle closed at $221.475 per hundredweight, down $1.70 Friday and 67½ cents for the week. November feeders finished at $331.15, down $5.20 Friday and 82½ cents for the week.

Friday’s profit taking was sizeable, particularly in feeders, but the weekly losses were modest. November feeders retained approximately 94% of the previous week’s $13.975 advance.

The supply outlook remains supportive, although the timing deserves attention. USDA’s September Cattle on Feed report showed August placements down 9%, while the Sept. 1 on-feed inventory was 1% larger than a year earlier. Fewer placements support expectations for tighter future supplies; they do not establish an immediate shortage of market-ready cattle.

Wholesale beef weakness added near-term caution. Thursday’s choice cutout fell $6.00 and select declined $7.70, while cash cattle business occurred at steady prices. That reduced the basis for expecting stronger packer bids late in the week.

Mexican imports remain another variable. Douglas, Ariz., reopened Aug. 24 and Santa Teresa, N.M., Sept. 24, while APHIS still lists other southern border livestock ports as closed. Reopening creates access, but actual crossing volumes determine how much additional feeder supply reaches U.S. buyers.

Cheaper corn improves prospective feeding costs and may help explain feeder resilience. Nevertheless, expensive replacement cattle keep feeding margins exposed to any decline in the eventual selling price of finished animals.

HOGS: A HIGHER WEEKLY CLOSE STILL NEEDS CASH CONFIRMATION

December lean hogs settled at $70.125 per hundredweight, up $1.20 Friday and $1.10 for the week.

The weekly gain was constructive, but Friday’s advance exceeded the entire weekly increase and followed Thursday’s contract low. That pattern is consistent with short covering rather than an established change in trend.

Last week’s Hogs and Pigs report offered longer-term support. USDA reported 74.3 million hogs and pigs on Sept. 1, down 2% from a year earlier, and a June–August pig crop also down 2%.

Immediate cash conditions remained less encouraging. Thursday’s national afternoon cash hog price down 79 cents, while the pork cutout rose only 34 cents.

Smaller year-over-year inventories can coexist with seasonal increases in market-ready supplies. Packers’ current buying needs, slaughter volumes and pork movement therefore remain more immediate price drivers than the headline inventory decline.

Lower feed costs improve prospective producer margins. For futures to establish a durable recovery, however, that cost relief needs to be accompanied by stabilizing cash hog prices and stronger pork values.

THE NEXT TEST: DEMAND EXECUTION AND USDA’S OCTOBER ESTIMATES

The trade outlook remains consequential, but its market impact depends on execution. USTR’s Sept. 27 announcement described recommendations covering $30 billion of trade on each side that could receive more favorable treatment in the future. It did not establish that the recommended tariff changes were already effective.

For agriculture, the sequence matters: improved access must translate into competitive offers, purchases and shipments. Soybeans have demonstrated actual Chinese business, while sorghum remains an especially clear test of whether broader trade opportunities produce additional demand.

The next major supply checkpoint arrives Friday, Oct. 9, at noon Eastern, when USDA is scheduled to release its Crop Production and WASDE reports. Updated yields will show whether this week’s additional corn carry-in is reinforced or offset by changes in the harvest estimate.

BOTTOM LINE

Until then, crop markets face damaged technical patterns and incoming harvest supplies. Cattle retain stronger prospective supply support, while hogs still need cash confirmation. Soybean oil’s outperformance shows that demand can sustain individual markets, but this week’s broader retreat raised the threshold for bullish news to produce lasting gains.

AG POLICY & MARKETS DAILY   |   MARKET PERSPECTIVE  |  WEEKLY COMMODITY REVIEW — OCTOBER 2, 2026