Corn prices saw their biggest August rally since 2010, and two veteran market analysts say $6 corn now a real possibility before year’s end. But if corn blows past $6, then prices could have a shot at $7. For livestock producers, that’s not just a headline number. It’s a feed bill.
With corn and soybean meal prices climbing on tightening global supply and rising geopolitical risk, feed users who haven’t locked in a meaningful share of their 2026 and 2027 needs could be staring down a very different cost structure than the one they budgeted for just months ago.
Dan Basse, founder and president of AgResource Company, and Chip Nellinger, founder and partner of Blue Reef Agri-Marketing, say the rally isn’t just from supply concerns here at home. Both say when you look at the explosive run in grain markets, it’s being driven by shrinking U.S. yield prospects, tightening global supplies and rising geopolitical risk out of the Black Sea. But now there’s concerns over what El Niño will bring, and that’s where $7 corn could come into play.
A Global Supply Problem, Not Just a U.S. One
The rally isn’t only about what Pro Farmer Crop Tour scouts found during the third week of August. It’s also about a world that’s losing bushels on multiple fronts at once, Basse says, and that’s sparking interest from the funds.
“It’s concerns about the U.S. crop, but then it’s concern about the international market,” Basse says. World wheat production among major exporters is down 47 million metric tons from last year, he says, while corn production is down another 50 million metric tons. “So in the background, the U.S. crop is shrinking and stocks are coming in in domestic standpoint, but the global market with what’s going on in the Black Sea is really the problem.”
For feed buyers, that’s the key takeaway: this isn’t a story that resolves itself once U.S. harvest wraps up. Tight global stocks mean less cushion if anything else goes wrong.
What Yield Is the Market Pricing In?
USDA currently has the national corn yield pegged at 180.7 bu. per acre. That yield estimate was released in the August WASDE, and didn’t include any objective yield sampling. But Pro Farmer Crop Tour uncovered a major problem in the field, showing production issues in key I-states, specifically Illinois and Indiana. That led to Pro Farmer to release their own annual yield estimate, and this year, was a big surprise, with Pro Farmer’s estimate coming in at 173.2 bu. per acre.
While funds had already been buying, that sparked new interest and sent corn higher on an unexpected rally. Harvest typically bringing seasonal price pressure, which makes this year’s rally is unusual. Nellinger says the market is already leaning toward a much smaller crop than USDA’s official numbers currently show.
“I really think the market’s trying to factor in somewhere around a 177 crop yield right now,” Nellinger says. All eyes are now on USDA’s September 11 report, he says, where the agency’s next move could determine whether the rally has more room to run.
If USDA comes in at 177 bu. per acre or lower, Nellinger says, the market could start pricing in further cuts down the road. A smaller, half-bushel trim could take some steam out of the rally instead.
“It’s really hard to rally the market straight through harvest, not impossible,” he says.
Adding to the volatility: comments from Russian President Vladimir Putin midweek suggesting a possible escalation in the Ukraine conflict sent wheat limit-up.
“That adds another wrinkle in the whole equation,” Nellinger says, adding it’s one more reason feed costs could move fast in either direction.
From $6 Corn to $7 Corn, And What It Means for Feed Bills
Basse and Nellinger first floated $6 corn roughly six weeks ago, a call that’s now looking increasingly likely. But Basse says there’s a real path to $7, a level that would mark a sharp jump in feed costs for livestock operations, with some sectors already working with tight margins.
“I still think we’ll see $6 corn before the end of the year, but I also believe there’s a 50-50 chance we could see $7 corn if there’s any hiccups in Latin America,” Basse says, pointing to a possible timeline of late this year into the first quarter of next year. He cites record-warm conditions in the equatorial Pacific tied to a potential super El Niño, and the uncertainty that creates for South American weather.
“If there is any issues at all, this corn market will not stop. The march will continue, and we get to real demand rationing... around $7,” he says.
Nellinger agrees the scenario is plausible, but not imminent. “Under Dan’s assumptions of, you know, some sort of a problem in the southern hemisphere, particularly Brazil due to El Niño, absolutely,” he says. “Is that going to come by October 15th? Probably not.”
He also cautions that feed buyers waiting for a pullback should be prepared for a bumpy ride. “Daily ranges are expanding. We are well in overbought territory,” Nellinger says. “There’s going to be corrections along the way here that are going to likely be violent and hard to sit through.” Fund positioning has accelerated the pace of these swings dramatically, he says. “What takes, you know, moves that used to take three months now take... a matter of 10 days,” he says. “I think $6-plus is where we need to go based on what we know today. And that’s going to change rapidly.”
What If a Producer Doesn’t Have Feed Needs Locked In?
For livestock producers who haven’t covered a meaningful share of their upcoming corn needs, Basse says there’s still a window to act, but it means being ready to move on any dip.
“We [AgResource Company] covered 50% of 2026 and early 2027 feed needs back in late June at $4.32 basis December corn futures,” Basse says. “Would use any 10-15 cent breaks to do the same today. I’d be 60-75% covered, depending on the client’s risk profile.”
Basse’s approach suggests using short-term breaks in the market, rather than waiting for a sustained decline, to build coverage incrementally.
What Could Spook the Funds?
There’s risk to any market, especially a market that has funds have been pushing price higher, and cause the market to drop. Ag Bull Trading reporting that as of late August 2026, managed money holds a net long position of 376,513 corn contracts, while their outright gross long position has reached an all-time record of 465,500 contracts
Beyond weather, Basse points to China as a wildcard heading into a September 24 summit with President Trump.
“There’s always something called China, right?” Basse says. He notes China was notably left out of recent U.S. sanctions tied to Iran — “a tip of the hat economically to the Chinese,” he says — while Chinese buyers continue purchasing U.S. soybeans and roughly 2 million metric tons of corn out of Brazil. “So that, if you look at the shipping line, it tells me that China also has a need for corn,” Basse says. He wouldn’t rule out China extending some additional goodwill purchases of wheat or corn ahead of the summit.
The Bottom Line for Feed Buyers
For now, all roads lead back to USDA’s September 11 report — the next major data point that will tell traders whether $6 corn is a floor, and whether $7 corn moves from possibility to probability.
For livestock producers and other feed users, the message from both analysts is consistent: coverage strategy matters as much as market direction right now. With volatility rising and a credible scenario for $7 corn on the table, waiting too long to lock in feed needs could prove costly.
