Grains & Sugar Weekly 09/05/2025

Corn

Weather stress continues to dominate corn market discussions. Much of the eastern Corn Belt endured one of the driest Augusts on record, and rainfall forecasts remain light and scattered. USDA rated corn 69% good-to-excellent, down two points from last week. Field reports from Iowa and Illinois noted premature browning, with disease pressure from southern rust and tar spot accelerating crop decline. Concerns are building over grain fill, as ears in some regions appear to be shutting down earlier than normal.

Yield expectations remain mixed. USDA could modestly lift its September estimate, while crop consultant Michael Cordonnier held his forecast steady at 184 bpa, citing disease pressure and late-season dryness. Private estimates from Allendale and StoneX also trail USDA’s projection, reinforcing the uncertainty late in the season.

On the balance sheet, beginning stocks are projected slightly higher, while production could fall by as much as half a billion bushels. Even so, total supplies are nearly 900 million bushels above last year, pushing projected carryover up by nearly 600 million bushels year-over-year and lifting the stocks-to-use ratio to 12.1%. The ample supply backdrop suggests limited upside unless demand improves.

Technically, corn futures bounced early in the week, testing initial resistance before retreating. Prices stabilized at the 50-day moving average and the 23.6% Fibonacci retracement before closing higher into the weekend. Traders remain focused on U.S. harvest progress, reports of southern rust, and ongoing trade negotiations, particularly surrounding tariffs.

Key Levels: Support at $4.15–$4.00. Resistance at $4.25–$4.35.

Soybeans

Soybeans faced late-season challenges as condition ratings fell four points to 65% good-to-excellent. Scouts reported widespread sudden death syndrome and yellowing fields across Iowa and Illinois, with dryness in the eastern Corn Belt compounding disease stress and raising concerns about pod fill.

Yield forecasts are divided. USDA may raise its September yield slightly, while Cordonnier maintained 53 bpa. Uncertainty remains around pod weight and seed size as weather and disease play out.

Market sentiment leaned cautious. Soybeans slid midweek on the continued absence of Chinese buying before stabilizing somewhat into the weekend. Exports remain the weak link, with China yet to book significant new-crop purchases for 2025–26 — an unprecedented absence for this time of year. Supply is expected to fall modestly year-over-year, though slower exports offset part of the decline. Ending stocks are projected lower, pushing the stocks-to-use ratio below 6.5%. Domestic crush demand remains supportive, but without Chinese business, rallies will be difficult to sustain.

Technically, soybeans slid through support at the major moving averages before recovering. Converging averages continue to highlight market indecision, with futures lacking a decisive driver. Trade attention remains on U.S.–China negotiations, though little progress was noted. New sales announcements late in the week provided some support, including 327,650 MT to unknown destinations, while Japan’s finalized agreement for U.S. ag goods offers a longer-term boost. For now, harvest progress and South American planting will guide direction.

Key Levels: Support at $10.20–$10.00, with deeper interest near $9.75. Resistance at $10.50, then $10.75–$11.00.

Wheat

Wheat futures hit fresh contract lows last week as harvest pressure and technical selling weighed on the market. Gains from late August short covering were erased, with a stronger U.S. dollar adding to downside momentum.

Globally, production outlooks remain favorable. Russia raised its output estimates, opening the door for increased export capacity, while demand for U.S. wheat lags. Russian price declines could attract more

Still, current price levels are near long-term value areas. While the broader trend remains lower, additional downside may be limited as short covering and bargain buying reemerge.

Key Levels: Support at $5.00, with deeper pressure toward $4.75. Resistance initially at $5.25, with added weight at $5.35–$5.50.

Sugar

Sugar futures broke down after failing to hold support at the $0.1630 area, where the 20- and 50-day moving averages converged. Stop-loss selling accelerated the move lower, with prices testing contract lows near $0.1550.

Fundamentals leaned bearish as Brazilian production reports strengthened, with mills crushing more cane for sugar rather than ethanol. Projections point toward a surplus not seen in years, raising the potential for increased export capacity. The heavy supply backdrop pressured sentiment, though oversold conditions are emerging with RSI just above 30.

Looking forward, sugar remains sensitive to Brazil’s export pace and broader policy shifts in key producers. While supplies appear heavy, prices have retreated to multi-year value areas, making further downside less certain.

Key Levels: Support at $0.1550–$0.1500. Resistance at $0.1600, then $0.1625–$0.1650.