July 29, 2025 Comment

The momentum of slower and lower continued today as Monday’s high crop ratings, falling world wheat cash prices and no bullish news after the completion of the preliminary US/China trade talks allowed prices to move lower again today with wheat the largest daily loser pulling corn lower while beans bounced off early lows to finish modestly lower. The bright spot in the raw material sector was a sharp rally in crude oil futures on optimism of an improving world economy and the massive energy section in the EU/US trade deal. Friday’s August 1^st tariff expansion deadline will be the next major piece of market moving news as the trade awaits potential last minute trade deals with Mexico, India, and other major world importers other than China.

News and Notes:

• The heat is ending and a cooler than normal temperature profile has emerged into mid-August for most of the Midwest. Normal rainfall is also forecast which would set up ideal conditions for corn final dough and fill stages and excellent growth conditions for beans. The current forecast continues to push the massive yield talk.
• The daily November bean chart is on Page 2 and shows the general laziness of the rallies and ease of bears to sell the rally and quickly take back those gains. The important areas on the chart to look at are the two trendlines (dotted black lines) that are heading toward meeting in the $10 area while the contract low ($9.61) and the spring low ($9.71 ¼) are the obvious the eventual downside targets if August weather does not become a problem for bean yield.
• The cattle and equity markets always have a relationship where general strength in the stock market spills over positively into beef demand. But four of the last seven trading sessions have seen new all-time highs in the NASDAQ and S&P equity indexes and live and feeder cattle futures. A strong economic outlook and no job security concerns will continue to support beef demand even at record prices.
• The US/China trade talks ended in Europe earlier with both sides calling the negotiations “constructive” with expectations that the August 12^th tariff deadline increase to be pushed back at least 90-days until Trump and Xi can meet in person. The market was not surprised by this news as expectations are for a contentious, slow negotiation that will drag into 2026, if it is done at all.

 The commodity and equity markets have been very unimpressed with the recent announcements of new trade deals, especially the grain and soy markets. The landscape of worldwide government sponsored agricultural expansion has caught up to the market after nearly 30-months of record yields in the US and South America and prices reflect that problem. With a record US crop on the way, extra demand is the only way to tighten ending stocks which we do not have currently.