AM Comments July 28 2025
Good morning. Markets have started the new week of trade at the CBOT much like they ended the previous one, with the ag space again seeing selling early on Monday and momentum seemingly remaining to the downside. Soybean futures gapped lower on the open last night on an announcement out of Argentina that export tax levels would be permanently lowered, which has been the main reason for the early-session selling so far in the overnight trade along with continued good weather forecasts for US crops through the first 10 days of August. We said it going home last week, and several times before that, but will continue reiterating that unless some sort of fundamental spark is seen, the most likely course of action for corn and soybean markets between now and the start of harvest is sideways to lower, with few interested in taking on any sort of sizeable new positions in the meantime. Corn futures to start Monday morning are trading 1-2 cents lower, soybean futures are trading 5-6 cents lower, and the Chicago wheat market is trading 2-3 cents lower. Products are lower as well, soybean meal is down around $1/ton and soybean oil is down 5-10 points. Outside markets are higher to start the week, crude oil futures are up 80-90 cents/bbl, the Dow Jones index is up 20 points, and the US$ index is up 60 points; the S&P500 is up 10 points and the NASDAQ is up 80 points. New contracts highs again already for the S&P and the NASDAQ
Today's Reports: Weekly Export Inspections; Weekly Crop Progress
- Friday afternoon's CFTC Commitment of Traders report for the week ending July 22nd showed fund traders in the week were sellers of 2,609 contracts of corn (now net-short 177,365), buyers of 21,412 contracts of soybeans (net-short 10,866), and buyers of 8,447 contracts of Chicago wheat (net-short 52,041). In soy products, funds bought 3,273 contracts of meal (net-short 129,743) and bought 12,106 contracts of oil (net-long 55,326).
- Also out Friday afternoon was the USDA's July Cattle on Feed report, which showed the US feedlot herd as of July 1 at 11.124 mil head, which is down 2% from last year. Placements in June were seen at 1.441 mil head, down 8% from last year, while marketings in the month were seen at 1.707 mil head, down 4% from last year. Of note, this is the lowest July 1 feedlot number in the last 8 years, and this was the lowest June placement figure in the last 16 years. To view the full report, please click here.
- Cold Storage data from Friday, also released by the USDA, showed total US red meat supplies at 839.4 mil lbs, which was down 4.5% from last month and down nearly 7% from last year. Frozen beef supplies were down 1% from last year at 395.7 mil lbs, and frozen pork supplies were down 11% from last year at 422.3 mil lbs. To view the full report, please click here.
- Aside from the Argentina news, the other headline maker from over the weekend was an announced trade deal between the US and the European Union, which was made public on Sunday. The deal sees European goods into the US tariffed at 15%, which is half of what President Trump had been threatening the rate would go to on August 1. While the markets are seeing the announcement as a win early this morning, the deal is similar to others inked by the administration in recent weeks in that it considerably lacks details.
- What details of the agreement that were publicly available included verbiage surrounding some products like aircraft, chemicals, drugs, semiconductor materials, natural resources, critical raw materials, and some ag products having a zero percent tariff rate, while the agreement also includes pledges by the EU to purchase US military equipment, purchase $250 billion worth of LNG (liquid natural gas), and invest upwards of $600 billion in to the US during Trump's second term.
- Circling back to Argentina, President Javier Milei, speaking at La Rural farm show on Saturday, said that his administration would be permanently lowering export taxes on most ag products in an effort to further enhance the country's long term competitiveness in global markets. The announcement would see the corn export tax go from 12% to 9.5%, while soybeans would go from 33% to 26% and products (meal and oil) would go from 31% to 24.5%.
- The big question as far as the rest of the global market is concerned is what affect this will have on exports in the short term. Previously, Argentina's government would make similar announcements on a temporary basis, which usually spurred significant bouts of producer selling due to the uncertainty of when the tax rate would be going back up; in this case though, it is unclear whether producers will act similarly due to the reductions being permanent.
- Federally inspected beef production in the US in the week ending July 26th was seen at 474 mil lbs, which is down a little less than 3% from the week prior. Pork production in the week was seen at 493 mil lbs, down just 0.5% from the week prior. For the year, beef production is down 3.4% at 14.56 bil lbs, and pork production is down 2% at 15.38 bil lbs.
- Other trade related news for Monday will likely include headlines from a US-China meeting in Stockholm that is expected to take place today and tomorrow. Led by US Treasury Secretary Bessent and Chinese Vice Premier He Lifeng, the talks look to further restore momentum towards a more broad-based trade agreement that has seemingly been lost again in recent weeks/months, though there are little to no expectations that any sort of major breakthrough will be had the next couple days.
- Weekend weather was largely as expected throughout the Midwest, with parts of IA/MO/IL/IN?OH seeing rains ranging anywhere from a tenth or two to 2" in some local areas. Further north, parts of ND and MN also saw good rains over the last 72 hours, though SD and NE were a little more short-changed.
- For this week, the EU model is wetter than the GFS, but both show continued thunderstorm activity through mostly the same areas that saw it over the weekend; the EU sees another 1-3" of rainfall through the week this week in a band stretching from SD through southern MN and IA and then into northern IL. Most of the Midwest east of the Mississippi River also expects to see rainfall this week, but totals look to be more scattered and generally less than an inch.
- Temperatures will be warm for most to start the week this week, but will then drop to below average by mid-week as cooler air from the north works its way into the area. Daytime highs for most all of the Corn Belt will struggle to reach 80 degrees F by Thursday/Friday this week, with this cooler air then seen lingering at least through the weekend and into the first part of next week.
- Looking further out, week two precip maps continue to be in poor agreement coming out of the weekend, with the EU showing above average rain potential in the northwestern Midwest, while the GFS shows above average rainfall in the southeastern Midwest. Temperature-wise, 10-15 day outlooks over the weekend trended back warmer in the east, though cooler air is still seen for a small pocket in the central US in the period.