- Chicago stays under intense pressure on weather and Trump China worry; Wheat tests trendline support at $5.30.
- Chicago grain futures continue at sharply lower levels at midday. Non-threatening Central US weather and ongoing speculative selling pushed November soybeans to downside price target at $10.40 while September wheat futures test a monthly uptrend line at $5.30, and corn tests last week’s low. End users are scale down buyers as debate rages on 2025 US corn/soybean yield potential. The market has a bearish feel at midday.
- Chicago is trading a 182-184 bushels/acre corn yield and a 53-53.5 bushels/acre soybean yield. It appears that either a threat to this yield must occur or these big yields need to be ratified by USDA before crop losses in the EU/Black Sea becomes a market topic. Chicago momentum is down which has algos/AI trading systems wanting to sell rallies. Yet, the rubber band is very stretched when considering the money managed short in terms of a percentage of open interest.
- Scale down end user pricing is noted, but so far, the needed interest by China to turn the market’s tide is not being seen. Chinese buyers believe that the weekend assassination attempt of Trump helped his re-election chances. Chinese buyers are worried about rising US tariffs in his second Administration. However, the new tariffs will not become active until February at the earliest, which allows a window of purchase opportunity for China.
- Chicago brokers estimate that the managed money has sold a net 5,500 contracts of wheat, 4,400 corn, and 6,700 of soybeans. In the products, speculators have sold 4,100 contracts of soymeal and 2,100 contracts of soymeal.
- US weekly grain exports were 42.5 million bu of corn, 19.6 million bu of wheat, and 6.2 million bu of soybeans. For their respective crop years to date, the US has shipped 1,755 million bu of corn (up 439 million or 33%), 83.3 million bu of wheat (up 18 million or 28%), and 1,543 million bu of soybeans (down 290 million or 19%). The US is on track to reach USDA’s revised corn/wheat annual export estimates, although we could argue that WASDE is too high with its soybean export estimate by 15-20 million bu.
- NOPA members reported a record June Crush rate of 175.6 million bu, a record and up 6.4% year on year. US soyoil stocks fell to 1,622 million pounds, which was below the average trade estimate of 1,686 million pounds. The August/December soyoil spread has pushed out to a $1.40 premium as cash US soyoil supplies tighten. The next upside price target is a test of the 2023 highs just above $2.00. The strength of cash soyoil and spreads offers limited downside potential for soyoil values.
- We look for US good/excellent ratings on corn/soybeans and spring wheat to rise 1-2% later this today. Rating gains are unseasonal in mid-July as the crop enters the reproductive stage. However, corn disease pressures are mounting with Grey Leaf Spot, Tar Spot and Northern Corn Blight worsening.
- The midday GFS weather forecast is drier for the W Midwest and the Northern Plains and more in line with the EU overnight run. Following a storm later today across IA/N IL, the forecast becomes more arid across the NW Midwest and the Northern Plains. Heavy rain will fall across the Gulf States and the SE US with totals of 2.50-4.50”.The midday forecast is warmer with heat returning to the Central US after July 20 as the western high pressure ridge in the west pushes eastward. A ridge in this position would spur the return of heat and 90’s/100s.
- The bears are in control amid favourable Central US weather and the fear of a trade war with China as President Trump prepares to address republicans in Milwaukee this week. The bears expect that Trump will continue his strong rhetoric against China and promise even larger tariffs in 2025. Wheat, corn and soybeans are at major chart support amid strengthening cash basis bids. And humidity levels are high with scouts concerned about corn foliar diseases. The bearish cast is set for today and maybe early Tuesday, it is a hard place to make sales with speculators so short.