Corn Market Update

? Prices:

• July Corn (CN): $4.16 1/4, down 3 cents; new contract low at 4.15
• December Corn (CZ): $4.29, down 4 3/4 cents
• July/September Spread (CN/CU): 4, up 2 3/4 cents

? Market Headlines:

• Private exporters this morning reported daily sales flashes of 630,000 MT's of corn for delivery to Mexico; of the total, 554,400 MT's is for delivery during the 2025/26 marketing year, and 75,600 MT's is for delivery during the 2026/27 marketing year. This appears to be the first flash sale for the 2026/27 crop year.

• The USDA's ag attaché to Mexico said in their most recent grain and feed report that corn imports in the 2025/26 marketing year are expected to be down around 2% from 2024/25 at 24.8 MMT's, based on better production and also imports in that season being record large and likely leading to increased carry over stocks.

• The attaché's post also sees Mexican corn production in 2025/26 at 24.5 MMT's, which matches the USDA, while ending stocks are seen at 5.5 MMT's, compared to the USDA's current estimate of 5.7 MMT's.

• Yesterday afternoon's crop progress report from the USDA showed corn conditions declining 2% on the week in the G/EX category to 70%, though this figure remains above both last year and average. Notable in the numbers was a 9% decline in North Dakota, which is possibly the result of recent severe weather.

• The report also showed 4% of the corn crop silking as of Sunday, which matches last year and is 1% ahead of the five-year average.

Summary:

Old crop corn futures fell to new contract lows again on Tuesday, as spill over selling from the wheat market led to pressure for the second consecutive day this week. Though at the lower end of trade expectations yesterday, crop conditions have generally stayed high through the first part of the growing season, which is keeping the USDA's currently lofty production projections in the realm of possibilities. Until this is no longer the case, we see the upside as fairly limited; rallies in the new crop will likely be met with farmer selling, while the old crop likely continues to be dominated by fund positioning, which has been decidedly bearish since the beginning of spring.

Soybean Market Update

? Prices:

• July Soybeans (SN): $10.46 3/4, down 12 cents
• November Soybeans (SX): $10.37, down 9 3/4 cents
• July Soybean Meal (MN): $280.50, down $1.90/ton; new contract low at 280.10
• July Soybean Oil (LN): 52.17, down 1.07 cents/lb
• July/August Spread (SN/SQ): -3 1/2, down 1/4 cent

? Market Headlines:

• Soybean conditions in the G/EX category held steady this week at 66%, while the USDA also reported 8% of the crop was blooming this week; this compares to 7% through the same week last year and also the five-year average of 7%.

• Meal futures made new contract lows for the third consecutive session today, as prospects for increased US crush next year have continued to pressure futures values. The old saying that low prices are the best cure for low prices will likely hold true at some point, but it is tough to see today where new demand will come from to absorb the new glut of supply US crushers will soon have.

• July bean oil futures traded into the open chart gap from last Monday during today's session, but were unable to fill it completely; they also left another gap on the way down last night, with the chart now also being open from 53.06 to 52.93.

Summary:

Spill over selling from crude oil into the soybean oil market was the dominant feature in the complex on Tuesday, as values declined for a fifth straight session and challenged the 10-day moving average at 51.86. Otherwise, it was the somewhat surprisingly large week of fund buying seen in yesterday's CFTC update that garnered the rest of the market chatter, as it appears fund manager have remained comfortable spreading their short corn market positions against long positions in soybeans.

? Prices:

• July Chicago Wheat (WN): $5.35 3/4, down 17 cents
• December Chicago Wheat (WZ): $5.75 3/4, down 17 cents
• July/September Spread WN/WU: -16 1/4, up 1/2 cent

? Market Headlines:

• Winter wheat harvest in the US continues to lag both last year and the five-year average, with the USDA showing just 19% of the crop out as of Sunday; last year, harvest had reached 38% complete by this date, while the five-year average is 28%.

• AgResource Co. reported in their mid-day wire that early reports of Kansas wheat protein levels were a little on the disappointing side, with most samples showing levels below 12%. Yield reports, however, have been good, averaging anywhere from 5-15% above APH. USDA currently sees KS wheat production up around 15% from last year.

• Wheat values across the Black Sea have continued to decline, adding pressure to US futures, as exporters try to get additional sales on the books for August/September ahead of full-scale Russian harvest in another few weeks.

Summary:

Harvest pressure remains the name of the game in the wheat market, as a recent pop in values last week gave producers an opportunity to sell newly harvested bushels across the scales which has led to pressure now in recent days. Funds trimmed their net-short position a bit in the most recent weeks' data, but are still short and haven't even covered half of the nearly 127,000 contracts they were short in May. Last summer, funds trimmed their net-short position to just 23k contracts by the start of October before adding back in through the fall/winter and into 2025.

In Other News

• Livestock markets again mixed/mostly quiet on Tuesday:
• August live cattle: $209.55, up 17 cents
• August feeder cattle: $302.25, down 55 cents
• July lean hogs: $112.22, down $1.22

• Outside markets saw a more scattered day of headlines on Tuesday, with there not really being one story that dominated the space:
• Crude oil futures: down $3.60-3.70/bbl
• Stock index futures: The Dow Jones index is up 500 points, the S&P500 index is up 75 points, and the NASDAQ is up 350 points
• US $ Index: down 40-50 points; also outside day lower

• Crude oil futures were down another 5-6% on Tuesday, though news out of the Middle East responsible for the declines was largely the same as yesterday. Those familiar see Iran's retaliation against the US as being complete, with no closure of the Strait of Hormuz as an outcome; this has led to the selling pressure over the past two days, as such a closure would likely send futures prices sharply higher.

• Fed Chairman Jerome Powell testified before a Congressional committee today, where he reenforced the Fed's cautious, data-drive approach to interest rate policy. As has generally been the case since Trump started his new tariff war several months ago, Powell noted a moderation in inflation, but added that uncertainty brought about by tariffs and geopolitical tensions continues to pose risks to policy making.

Weather Outlook

? Short-term Forecast:

• Ridging looks as though it will continue deteriorating throughout the week this week, as models see storms filling in through the southeast and southern Midwest early/middle next week.

• Temperatures look to remain though, with Monday highs seen in the mid/lower 90's for most of the region, while the central Plains stay a little cooler with highs in the mid/upper 80's.

• Not a lot of change the rest of this week, as the northern/northwestern Corn Belt still look to receive 2-3" of precip between now and Saturday.

? Extended Forecast:

• The GFS is more like the EU model in the week two outlook today through the Midwest, but added precip for the western/northern Plains through parts of Wyoming and Montana that are not present in the EU's outlook. Despite the fluctuation, the best rain chances in the period look to remain through the southern half of the US, stretching from New Mexico to Florida.

• Still no signs of heat abating, with extended forecasts still showing above average warmth through most all of the country besides the far southeast into the first part of July.