PM Comments July 11 2025

Posted on Jul 11 at 14:11

Happy Friday. Grain and soy markets were mostly lower to wrap up the week this week, as WASDE data that was actually somewhat positive, at least for corn, was largely ignored by traders who continued to press the down side in the markets. Whether right or wrong, it seems the trade is set on a corn yield number that is well above what the USDA is currently penciling, which is simply making upward price action near impossible to come by. The market should find a seasonal bottom at some point in the next few weeks, but until then, we see downward momentum likely remaining in place in the short term as forecasts are favorable and funds have no reason to quit selling.

 

Have a great weekend!

Corn Market Update

? Prices:

  • September Corn (CU): $3.96, down 3 1/4 cents; outside day lower, and new contract low at 3.94 1/2
  • December Corn (CZ): $4.12 1/4, down 4 1/4 cents
  • September/December Spread (CU/CZ): -16 1/4, up a penny
  • For the week: CU was down 24 1/4 cents; CZ was down 24 3/4 cents

 

? Market Headlines:

  • The July WASDE report showed corn production down 115 mil bu from last month at 15.705 bil bu, with most of the reduction coming from a 600k acre cut in harvested acres.

 

  • Other notable balance sheet adjustments included a 100 mil bu increase to 2024/25 exports and a 75 mil bu reduction in old crop feed and residual use; old crop exports were raised 100 mil bu, and there was no change to new crop exports. The adjustments resulted in new crop ending stocks coming in at 1.660 bil bu, down 90 mil bu from last month.

 

  • At the world level, ending stocks came in at 272.1 MMTs, which was down from 275.2 MMTs last month on lower supplies in both the US and China. In South America, Brazil's 2024/25 corn crop was raised by 2 MMTs to 132.0 MMTs, while there was no adjustment made to production in Argentina.

 

Summary:

New contract lows in the corn market to end the week this week despite a WASDE report that was arguably friendly from a numbers standpoint. We are questioning today how low new crop carry out needs to go to get anyone excited, with the answer apparently being below the 1.66 bil bu figure that was printed earlier this morning. We keep repeating it, but the record crop prospects are dominating trader sentiment, and we don't see anything that changes this into next week with another monthly supply and demand update having come and gone.

Soybean Market Update

? Prices:

  • August Soybeans (SQ): $10.04 1/4, down 8 1/4 cents; outside day lower and new low for the move at 9.99 3/4
  • November Soybeans (SX): $10.07 1/4, down 6 1/2 cents
  • August Soybean Meal (MQ): $270.30, down $1.10/ton
  • August Soybean Oil (LQ): 53.75, up 0.26 cents/lb
  • August/November Spread (SQ/SX): -3, down 1 3/4 cents
  • For the week: SQ was down 51 1/4 cents; SX was down 42 cents; MQ was down $7.10/ton; LQ was down 0.80 cents/lb

 

? Market Headlines:

  • Private exporters this morning reported daily sales flashes of 219,900 MTs of soybeans for delivery to Mexico during the 2025/26 marketing year. Of note, that makes four out of five days this week with a daily sales flash of some kind.

 

  • WASDE data leaned somewhat neutral in the soybean market, as balance sheet adjustments were rather minimal for the most part. In the old crop, exports were raised 15 mil bu but then offset by a subsequent 15 mil bu reduction in residual use, while in the new crop, a 70 mil bu reduction in exports was offset by a 50 mil bu increase in crush. The end result was ending stocks for the new crop increasing by 15 mil bu to 310 mil bu.

 

  • On the products side, WASDE pegged meal production in 2025/26 at a new record of 59.85 million tons, while the bean oil balance sheet saw a sharp shift from exports to domestic use based on 45Z tax credit policy in the new tax bill. Also of note on bean oil, USDA pegged biofuel usage above FSI usage for the year for the first time on record.

 

  • At the world level, new crop ending stocks increased by just under 1 MMT to 126.1 MMTs; China's imports were lowered 1.5 MMTs to 106.5 MMTs, and Brazil bean exports were lowered 2.4 MMTs to 102.1 MMTs. In South America, Brazil bean production was left unchanged at 169.0 MMTs, and Argentina's bean production was raised 0.9 MMTs to 49.9 MMTs.

 

  • Private Brazilian agribusiness consultancy Safras & Mercado said on Friday that they see Brazil's soybean planted area increasing by more than 1% next year to 48.2 million hectares. If accurate, soybean output could approach 180 MMTs with good yields, which would be another new record and up nearly 5% from the current year.

 

Summary:

WASDE adjustments in the soybean market were rather minimal, but were sold by traders following the report release nonetheless, as August futures fell below $10 for the first time since early April. China's absence from the world soybean market continues to limit rally opportunities in prices, as crop size becomes less important if we don't have anything to do with the beans either way. The increase in soybean crush was a bright spot, but it is our opinion that this number is still a bit of a crap shoot over the rest of the year, with it being far from certain that newly enacted biofuel policy will rapidly lead to a ramp-up in crush in the short term.

Wheat Market Update

? Prices:

  • September Chicago Wheat (WU): $5.45, down 9 1/2 cents
  • December Chicago Wheat (WZ): $5.65 1/2, down 9 1/2 cents
  • September/December Spread (WU/WZ): -20 1/2, unchanged on the day
  • For the week: WU was down 11 3/4 cents; WZ was down 12 3/4 cents

 

? Market Headlines:

  • Production numbers were the main focus for wheat in today's WASDE update, with all wheat production being seen at 1.929 bil bu vs 1.921 bil last month and 1.971 bil last year. Winter wheat production was seen at 1.345 bil bu, while spring wheat production was seen at 504 mil bu.

 

  • On the balance sheet, new crop ending stocks were down 8 mil bu from last month to 890 mil bu, as exports were increased by 25 mil bu and supply was increased by 17 mil bu. From a crop standpoint, yield was raised to 52.6 bu/acre, and harvested acres were dropped 600k to 36.6k.

 

  • Globally, ending stocks were seen at 261.5 MMTs this month vs 262.8 in June; production in both Canada and Ukraine was trimmed 1 MMT a piece to 35.0 and 22.0 MMTs respectively, while the EU was increased 0.7 MMTs to 137.3 MMTs, and Russia was increased 0.5 MMTs to 83.5 MMTs. China's imports for 2025/26 were steady on the month at 6.0 MMTs.

 

Summary:

Wheat numbers in today's reports were largely as expected, and didn't do much to materially change the fundamental outlook in the short term. US production came in slightly larger than predicted, but there wasn't a lot of change to ending stocks or trade estimates, which led to a mostly muted price reaction. News of a desire by Russia to increase exports, possibly by decreasing prices, could keep a lid on any further upside potential at least in the short term.

In Other News
  • Cattle markets were higher to end the week this week, while hog futures ended the week lower:
  • August live cattle: $222.20, up $2.97; new contract high at $223.27
  • August feeder cattle: $325.32, up $4.05; inside day higher
  • August lean hogs: $104.67, down $1.65

 

  • Outside markets are trading mixed to end the week, with crude oil futures seeing good gains on news that OPEC+ could slow production cuts after August:
  • Crude oil futures: up around $2/bbl
  • Stock index futures: The Dow Jones index is down 300 points, the S&P500 index is down 20 points, and the NASDAQ is down 50 points
  • US $ Index: up 15-20 points

 

  • President Trump told reporters at the White House on Friday that it was possible he could speak to the leaders of both Canada and Brazil regarding recent tariff announcements, but otherwise offered no new details on trade developments between the partners.

Weather Outlook

? Short-term Forecast:

  • Rains through the weekend according to the EU model will be best in IA/N IL/S WI, where totals are seen in a range of 1-2"; areas further south see chances at a lesser 05.-1", but will coverage will be spotty.

 

  • On the temperature side, most of the Midwest expects to see more mild air temps through the weekend, with highs seen in the mid 80's both Saturday and Sunday. Things then briefly warm up again for a day or two early next week, but cooler air then comes back in the middle of next week to drop highs back well below seasonal averages into the weekend of the 19th and 20th.

 

? Extended Forecast:

  • Week two precip forecasts this afternoon continue to show average to above average rainfall potential through the Midwest into the end of July, while the west looks to stay drier than average. Best rain chances look to be in the southeast and areas along the Gulf Coast.

 

  • Temperature outlooks in both the 5-10 and 10-15 day periods are mild throughout the Corn Belt, and are keeping any extreme heat to areas west of the Rockies. Warmer temps are also seen in the far northeast, but cooler air stays sandwiched in between in the country's midsection, which benefits Midwest crops.