Rally Takes a Breather as Crop Tour Rolls On

Momentum and poor early crop reviews from ProFarmer sent corn and bean prices higher in early trade before a cooler and drier noon forecast allowed for farmer hedging and fund profit taking to push corn into the red and beans near unchanged. Wheat remains hostage to news from the Black Sea, but all three markets saw an easier trade into the close as the recent rallies needed to take a break. The PFT found disappointing crops on Monday in Ohio and the Dakotas, but today’s trek through E Nebraska over to central Indiana states found fields with better opportunities, but nothing to match the 2025 record yields. The bulls were looking for fresh news today and without any Chinese purchase rumors or announcements, the yield discussion is not enough to accelerate what has been an exceptional rally since last Wednesday’s report.

News and Notes:

• Unseasonable cool temperatures in the ECB with seasonal temperatures for the rest of the Corn belt remain consistent, but the return to mostly dry conditions over the next week was the most welcome part of the forecasts. The south and S Plains will continue to bake, driving late maturing crop to a quick finish. The US outlook into late August is far less concerning than last week.
• The daily December corn chart is on Page 2 and shows today’s early rally to $4.93 took out the June high of $4.92 but failed to hold momentum and closed lower and well off the daily high of $4.93. This is not a surprising technical reversal after the 34-cent rally since last Wednesday’s report. The market (and beans) were approaching overbought and today’s pause without a sharp reversal is a healthy way to start a more range-bound trade for consolidation.
• The ProFarmer Crop Tour will continue through t week with nightly highlight reports, but with so many of the participants on social media, the market is able to digest findings during market hours. Iowa’s results will be closely followed as the USDA expects a record state yield approaching 208 BPA, but even a 2-3 BPA drop would take meaningful bushels from final US estimates.
• There were no flash sales this morning and no cash related rumors on Chinese interest, China only rarely buys rallies when they are in the market but should be seen on any 10-12 cent pullback in corn or 15-20 cent loss in beans. The funds will be key players in what the markets do in preparation for the China/US trade summit 5-weeks.
• Monday’s crop ratings each fell 1% with corn coming in at just 60% G/E while beans were 61%. Illinois at 59% for corn and beans tells the tale why US trend line yields will not be achieved this year. Iowa’s matching 78% G/E ratings for both crops will be tested by this week’s news from the PFT as they traverse across Iowa. The problem this year has been the wild inconsistency of the rain and dry spells and duration of the heat. If you just look at summer rain totals, you will think the crops would be better, but that is not what has happened. The hottest July on record in the Corn Belt and potentially the wettest August on record in the ECB, are good reminders that consistent weather rather is more important than just looking at the averages.
• There was no substantive news or conversations about ending either war over the last 24-hours as crude oil crawls back to $85 a barrel adding inflation concerns, which would be raw material price positive if realized.

Markets can’t and shouldn’t go up every day unless there is a major event that makes fair value a quickly moving target. With Dec corn and Nov beans flirting with a larger breakout, a healthy period of consolidation will set up an even higher price target if the markets calm down for a week. Whatever PFT finds this week will not offset or accelerate the general mood after the USDA report, as the trade is becoming acutely aware that early fears of another 2025 yield were unfounded. The 2026 US corn yield is on pace to be a top 5 performer, but not a bin buster. Unless something crazy happens, we will not publish a daily comment on Wednesday.