Grain Markets Crushed Again as USDA Report Looms and Weather Bulls Disappear

A brutal start to the week saw a cooler US forecast for mid-July confirmed through the noon forecast which combined with July first notice day liquidation, the heavy volume selling pushed old and new crop corn prices to new contract lows while beans and wheat fell to sharp double-digit losses. With Tuesday’s Acreage and Stocks report looming to potentially cause even more heartburn to end another miserable June for the fourth year in a row. The bulls now need the USDA to help build their case for a summer rally, as the long-term forecast models for nearly every major weather advisory service have been wrong again. Getting through Tuesday’s report now seems to be the only goal for the beleaguered prices.

News and Notes:

• Friday’s late forecast change to a much cooler and normal outlook for mid-July was verified through the weekend to more than erase last week’s weather premium. Weekend flooding in the lower Ohio Valley had no impact on price despite areas receiving another 6-10-inches on already waterlogged fields. US rain makes grain continues to be the market theme.
• The estimates for Tuesday’s USDA/WASDE report are on Page 2 and show the expectation of roughly 400,000-600,000 acres from corn to beans. Importantly, corn, bean, and wheat stocks are expected to increase from 2025 despite a miserable 2026 US wheat crop, US corn acres potentially falling 4MA from 2025 and extremely strong export and domestic demand. Last year’s monster US corn crop and Brazil’s record bean crop continue to have long bearish tails in the world market.
• Private analyst farmer survey generated acreage estimates continue to come in below the average trade estimate. The problem for this report is that it has not proven to be particularly close to the numbers seen in the January final report. The USDA/WASDE will begin to work with the FSA to fine tune the final numbers. The illogical way the USDA gathers the acreage numbers and then rocks the markets with a mid-summer rough draft remains one of the most idiotic things the agency does.
• Despite recent missile attacks from both Iran to ships and their neighbors and the US retaliating, President Trump announced today that Iran has requested a meeting on Tuesday in Doha, Quatar for more discussions on a permanent cease fire and completely and safely opening the Straits. Crude oil never traded lower during the day and finished with $1.20 gains. The bio-fuel connection to crude oil has completely ended.
• A 5 MBU bean sale was announced in today’s USDA’s daily sales report to Unknown destinations (probably China) for the 26/27 crop year delivery. China is not making any headlines with these small almost under the radar (or simply ignored by the markets) purchases but expect them to continue to buy just enough on breaks to keep the trade deal in place.
• This week’s crop ratings dropped 1% for each corn and beans. Corn is now 6% below this week last year while new crop prices are just 1 ½ cents higher. The current market is pricing in a 183+ BPA yield.
• The old seasonal that the July 4th weekend was the inflexion point for summer prices has all but vanished as the month of June has been brutal since Covid with only ’20 and ’21 seeing gains of 11 ¾-cents and 43-cents. Since ’22, every June has posted monthly losses of 91 3/4, 27, 46 1/4, and 45 (so far this year). The new seasonal should be sell on Memorial Day to save you money. Last year we wrote several pieces pointing out that harvest lows are becoming more frequent around September futures first notice day at the end of August. We can add July futures first notice day to the new seasonal factors. These changing factors can probably be attributed to the massive fund involvement now seen in our markets that did not exist until 2008. Since then, the stock (CME) has increased over 5X in value.

It is always a bad feeling when you wake up on Monday morning and are ready for the week to be over. The old saying of it can always get worse applies to today and for everyone’s sake, let’s hope it only gets better starting tomorrow. The corn market is in desperate need of confirmation of upcoming Chinese demand, lower planted acreage in Tuesday’s report and a real weather scare to develop fairly soon. Tuesday’s USDA report will be released at 11 AM central and we will put out an overview shortly after the release.