Welcome back to the table for the Friday, October 16th, 2026 Market Plus. Shawn Hackett still with us here. Shawn, got a couple pieces of paper but I don't really need them with you. I just look at you and make sure I dodge what's coming. We got, I said it during the TV show, that we had about six or nine questions about USDA in last week's report. Let's start with the first one, shall we? We're not going to do all of them, but I just want to let you know we did see all of them. But let's start with Roger in Nebraska. He wants to know: while most farmers have seen with their own eyes that their corn yields are down, please explain why in the world USDA has raised the corn yield by three bushels in their latest report. Where I'm at in eastern Nebraska, there is a lot of lodging corn and we are having difficulties getting the crop out due to excessive rains. This is back to the backyard story that we hear every year. It's dry, it's wet, it's whatever.
I don't think anyone can look at their area and say they know the national yield, because every area has different weather conditions, different soils and so forth and so on. So, and it's even harder even for those that do crop tours to get the number right. So, I think, I think you have to look at the situation and say, the only thing we can do up until harvest results start coming in from the field is give our best guess based on our capabilities. Can the USDA maybe do a better job? Can they apply technologies maybe in a better way? Probably. Could they have waited until November to make a bigger adjustment on yield when more evidence was in place? I think they could have and should have. Does it mean that they're right or wrong? We'll soon find out. And so, I just think that too many times you look at weather in your backyard, you look at your field and think that the rest of the country is the same. And it really isn't. It's very variable and very, very hard to say for sure just because that part of Nebraska is bad, that the USDA is incorrect.
There's also midterm political questions we'll get into in a minute. So, let's get to Scott in Iowa, who I know has been busy trying to get harvest done. What has a better chance of recovering: corn, soybeans, cattle? And even though I don't have hogs, do hogs, though, have a chance to rally?
I think the best catalyst for a rally is the soybean market, because we're going to be moving into a key point of weather for South America and Brazil specifically. And so, you know, weather tends to be the great equalizer. It tends to be something that if it turns sour, you can certainly get a rally fairly quickly. And moving into mid to late November onward, as we said in the main show, that's the catalyst for soybeans. And I think that there's a really good chance that this super El Nino is going to create some adverse weather worry and bring some buying back into the soybean complex. So, I would think that soybeans have the best catalyst for the first one, or probably the best kind of a move off of the lows here that we've set here in the next couple of weeks.
Do super El Ninos or just El Ninos, do they last more than one year?
Typically not, especially super El Ninos. Definitely do not. They go up and as fast as they go up, they come straight back down. If you look at the typical analog for a super El Nino, it'll peak in November, December. All the models are suggesting that. And by the following summer we typically are in a La Nina. By the summer, July of 2027, we are probably going to be in a La Nina. That's how fast it ends. So, you go from one extreme to the other, you know, from one growing season to the next. That's what we're anticipating. And that's what the historical context says about super El Ninos.
And I know we have a question about what it means for South America production. You kind of talked about that in the program. There's a theory kind of developing about Brazil, kind of split in two in how it's impacted. Which camp do you fall into?
Well, they are impacted opposite. The North is an Amazon monsoon activity thing. The South is an ocean flow thing. And what we know from super El Ninos is that central south corn, central south soybeans, it's excessive rainfall. And we've seen record rainfall so far this planting season. Central, north, central, west where they grow second crop corn and the rest of soybeans is typically hot and dry normally in a super El Nino. If it's not so wet in the south, they have really good crops that offsets the north, and overall the crops are okay and Argentina is pretty good. What we think is going to happen because this super El Nino is so unusual, so strong, so anomalous, we think the flooding in the South actually creates poor crops. And we think that the hot, dry weather comes in the north, creates a poor crop, and we actually can get a total crop down for soybeans that we typically don't see. In fact, 2023 was the first year that we saw yields overall down 10% below expectation in Brazil. It's the first time we ever really seen anything like that. We think we could see at least a repeat performance of that, potentially even more so if this flooding in the South really keeps going, it could be a big problem.
What do I do to take advantage of such action?
Well, I mean, what I'm saying is that I think we could get a weather-related rally, whether premium gets put back into the soybean complex into, let's say, November, December, January, you get a weather-related rally that takes you back into the overhead resistance levels that we were just at. And you get an opportunity to move some cash corn that you want to, need to, or would like to. And remember what's good for soybeans, it's not going to hurt the corn market, right? The corn market's going to follow along and so will the wheat market. So, I think soybeans can be the leader here for a while and help the whole grain complex, all things being equal.
Well, you kind of answered my next question a little bit here, Shawn. But let's just see. This one's Holt's View Farms in Iowa. Would it be a smart idea to store corn this fall and sell next year?
I'm much more favorable overall, generally speaking, towards corn. I think that the corn market has a much stronger, stable demand. We don't have to worry about China buying or not buying. And when I look at how expensive the corn crop is to put in the ground, not only here but elsewhere, and I look at what I think is going to take place with geopolitics, the diesel price and everything, and the fertilizer prices and everything else, I think it's going to be very, very hard for the corn market to plant the amount of acres needed next year without keeping the price much more attractive than it already is. And so, for that reason, I'm much more favorable for storing corn in the bin and letting the soybeans go. Right now, a soybean price of 13 is not a bad price. That actually pencils out pretty good right now.
This week's MtoM podcast is about the fertilizer market. I've seen mainstream stories have more about the fertilizer market, looking at the weather impacting some of the action here in this part of the world. So yes, the fertilizer is definitely on the minds. And you mentioned midterm elections and politics. Matt in Iowa wants to know: what direction can we expect that grains are going to go into the midterm elections?
As I said in the main show, I'm kind of feeling the grains are going to struggle. All commodities have been struggling, outside of crude, have been struggling going into this. Lots of uncertainty, lots of headlines of leverage, trying to be pulled ahead of the elections to buy votes and such. I just think that because in the stock market, you know, the last couple of days, you know, the Nasdaq has been getting hit very, very hard. Lots of these AI tech stocks down 20 and 30%. I just think it's a turbulent time going into these midterms. And I would not anticipate speculators getting too excited to come into the grain complex until we get through those elections. And then after that, I think the game is on.
