Grain Comments: 02.04.26

Good morning. Mid-week ag trade is mostly quietly lower to get Wednesday started, with all three of the corn, beans and wheat trading down a penny or two and generally inside of the ranges made on Tuesday. Bean oil is the one higher market of the bunch this morning, with follow through selling from yesterday being seen but not enough to push the market to new highs so far at this point. Corn futures this morning are 1-2 cents lower, soybean futures are 1-2 cents lower, and the Chicago wheat market is 2-3 cents lower.

📅 Today’s Reports: Monthly ADP Employment; EIA Weekly Ethanol Production/Energy Stocks

• This morning’s weekly ethanol report from the EIA, with data for the week ending January 30th, is expected to show average daily production in the week between 900k-1.111 mil bbls, while stocks in the week are seen between 25.0-25.7 mil bbls. The report is expected to be out at its regular 9:30am central release time.

• Crude oil futures traded higher yesterday on news reports that the US had shot down an Iranian drone in the Arab Sea that it claimed aggressively approached one of its aircraft carriers. Later in the day, a US-flagged vessel was apparently approached by Iranian speed boats before being escorted away by US destroyers. The incidents reflect ongoing tensions in the region despite President Trump over the weekend and early this week seeming to indicate progress was being made on an agreement.

• According to reports form Chinese state media, citing the State Council’s “Number 1 Document”, China will make efforts to stabilize grain and oilseed output, diversify ag imports and increase support for farmers as part of a rural policy blueprint aimed at ensuring food security. Though the country saw record grain output in 2025, it still remains heavily reliant on imports, and trade tensions, especially with the US, have led to accelerated efforts towards becoming more self-sufficient.

• Speaking at a sugar conference in Dubai this week, several industry experts and analysts said they see 2026 Brazilian ethanol production taking a notable jump from the year prior, as strong prices, an expansion of corn ethanol plants and what’s expected to be a large sugarcane crop have set the table for more supply of the biofuel to be available out of the world’s number two producer. Relatedly, they also see exports of the product likely increasing year/year as well.

• State meteorologists from Ukraine said on Tuesday that weather conditions throughout the month of January had little negative impact on winter crops there, despite severe frosts in the last week of the period. However, they did note that as a result of cold temperatures and rainfall, a lot of fields in the central and eastern part of the country were covered by a layer of ice, which if prolonged to for an extended period of time, could lead to plant damage.

• The Purdue University/CME Group’s ag sentiment index saw its biggest monthly decline since 2020 last month, with the index falling from 136 in December to just 113 in January. The drop highlights ongoing issues with trading partners, and is also likely in part due to increased production figures in the USDA’s January WASDE report that maybe caught some by surprise.

• Satellite data shows yesterday’s storm system gave the southeast around a quarter inch to an inch of rainfall from the Delta to the mid-south, though the rest of the Midwest to the north was again drier and saw little in the way of precip. For the rest of the week, models are in a little less agreement this morning on a northeast clipper that has been forecast all week; the EU is like prior runs and has the system giving snow to the eastern Midwest through the day on Friday, but the GFS now sees this system staying more to the north, with snow more likely across the northeast.