Global Conflicts and Chinese Demand Strengthen Bullish Grain Outlook

After a volatile week of ever-changing input, prices finished the day and week higher with wheat leading the charge in both. World war event premium was added as Russia and Ukraine have begun to target and hit several key shipping routes and grain loading facilities in the Black Sea region. Further south, the US, and Iran are back to square one in a ceasefire negotiation as Iran as regional attacks increased late week. US weather has moderated for most of the Corn Belt, the far WCB and Plains remain too dry with heart building in the next week. Strong Chinese demand was the biggest supply demand news of the week as China is moving forward on honoring the 25 MMTs of US bean purchases for 2026. The landscape for the entire world is too unpredictable and volatile to feel comfortable in any prediction, but the markets are taking on a more bullish posture.

News and Notes:

• The US forecast into the end of July is calling for below normal rainfall and above normal temperatures for most for the Corn Belt, with the WCB with the worst outlook. Europe and Black Sea crops remain in drought influenced decline.
• The daily new crop charts for corn, beans and wheat are taking on different shapes as Dec corn works back into mid-range for the entire trading year of 2026 while beans and wheat are attempting to definitively break out to make new 2026 and new 26-month highs. With the most serious weather threat past for US corn pollination, the Dec corn chart is stuck in the congestion of the 50, 100 and 200-DMAs as the funds sit on a net long of 215 MBU. Beans have a bullish set up on extremely strong world demand and high crush margins as the funds are holding a sizable 475 MBU long. The European drought and increased targeting and destruction of Black Sea export capacity is the fire under wheat as the funds have trimmed their net short to a very small 100 MBU. There is currently so much fundamental news that the technical picture will take less of a roll into month end.
• The August USDA yield update is looming on the horizon which will add another potential wildcard shock to very unsettled markets. Currently, industry estimates are for a 181-182 corn yield while beans ability to hit trend of 53 will be determined by August weather.
• The USDA announced additional Chinese bean purchases in Friday’s daily sales report with totals for the week exceeding 40 MBU. Mexican corn purchases were also announced. The US export sales pace should continue to accelerate into harvest as China needs to by about 35 MBU of beans a week to reach their annual commitment.
• Cattle prices remain in freefall with cash trade falling nearly $30 from its peak and live cattle futures prices falling to their lowest close since December 2025.
• Please look at the updated Sales Targets on Page 3 and have them placed with your buyers. The insane overnight volatility will remain until both wars are ended, so don’t let an opportunity slip by when you are sleeping. With option re-ownership strategies put on at lower levels, using upcoming rallies to advance and catch up on sales is advised.
• Weekly Changes: Corn + 5 1/4 (Sep ‘26), + 6 1/2 (Dec ‘26), Beans + 12 1/4 (Sep ‘26), + 12 1/4 (Nov ‘26), Wheat + 40 1/2 (Sep ’26), Crude + 1108, Diesel + 5113, Dow - 531, US Dollar - 119, Cattle - 1077, Feeder Cattle - 1020, Hogs  + 350 , Cotton - 281, Milk + 119 (17.82).

With so much going on all over the world, it is necessary to identify the driving factors for each market. For corn it will be the US weather for the next 8-weeks, for beans it will be US weather and Chinese demand, while wheat will closely watch the Black Sea infrastructure destruction amid falling northern hemisphere production. Although crude oil is back to mid-range since the war with Iran started, diesel has exploded to new 4-year highs to add more cost to the transportation of everything. With the Sales Targets for each crop updated to address the increasingly bullish setup, the roller coaster of 2026 should give everyone additional pricing opportunities into late summer. Opening calls are higher on Sunday night on escalation on each war front and more international logistic issues. Have a great Sunday.