Grain markets were lower again on Tuesday as traders are solely focused for the time being on good weather for the growing spring planted crops. It is also safe to say at this point that the crops are passing the “eye test” with USDA giving the corn crop its highest early July rating since 2018. In outside markets, it was a much quieter tone Tuesday compared to Monday as investors and traders seem to have been somewhat calmed by the extension of the tariff cutoff by the Trump administration to Aug. 1, but ongoing trade negotiations will be an important factor for the balance of July. For energy markets, crude oil is working towards a second session higher to start the week despite the announced OPEC+ production increase for August reported over the weekend. Unfortunately, for ag markets, the firmer energy prices did little to prop commodity prices, as currently, weather trade is trumping all..
WHEAT:
Wheat futures traded mixed on Tuesday with Kansas City September futures closing down 5 cents to $5.22 1/2. Meanwhile, September Chicago futures were only fractionally lower, and MIAX September Minneapolis futures dropped 7 1/2 cents. Harvest pressure for winter crops is keeping a firm hand on prices, while spring wheat futures may have traded lower Tuesday in reaction to chances for increased precipitation across northeast Montana, North Dakota and Minnesota over the next two weeks.
USDA reported on Monday that 53% of the U.S. winter wheat crop is harvested as of Sunday, July 6. Progress advanced 16% over the past week and has closed within just 1% of the five-year average pace for early July. Conditions for the winter wheat crop held mostly steady at 48% good to excellent nationally. For the spring wheat crop, good-to-excellent ratings declined on Monday for the third straight week to 50% as of July 6. Drops were notable in Minnesota and Washington, but stable conditions in Montana likely thanks to recent rainfall kept prices in check for Tuesday’s post report trade.
For wheat technicals, September KC futures failed in the last minutes of trade Tuesday to hold above the lowest close for the contract thus far at $5.22 3/4, set on May 12. Should support here fail to inspire short covering through the rest of the week, the market is likely looking to move back towards the July contract low close of $5.08, which also featured an intraday trade down to $5.00 1/4 from which buyers stepped in to ultimately send prices over 80 cents higher through the next month.
CORN:
September corn futures traded down 5 1/2 cents on Tuesday to $3.98. New-crop December futures were down 6 1/2 cents to $4.14 1/4. Both old and new crop prices sank to new lows for Tuesday, with September futures finally breaking below $4.00 for the first move below the mark since October 2024 and the first close below since August 2024, both events which spurred subsequent rallies moving forward.
USDA raised the percent of the U.S. corn crop rated good to excellent by another point in Monday’s update, to a stout 74% as of July 6. The highest rating for early July since 2018. I remain skeptical of overreliance on weekly crop condition ratings for predictive measures, as the relationship between early season conditions and final yield is a weak one over the past decade. That being said, it can’t be denied that the crop looks great thus far thanks to mostly ideal weather, which is still forecasted to remain in place through the start of pollination, which may prove difficult for bulls to rally against. On a state-by-state basis, Iowa ranks highly at 86% good to excellent, while conditions are generally lower as you move east across the Corn Belt. Illinois needs to have a close eye kept on conditions, where good-to-excellent ratings have fallen 6 points over the past two weeks, while poor-to-very-poor ratings have risen 2 points.
In trade news Tuesday, private exporters reported sales of 4.4 million bushels (mb) of corn to Mexico for the 2025-26 marketing year — the second day in a row with a reportable sale and likely pushing the pace of new crop corn sales to over 30% higher than at the same point in 2024. The low cost of U.S. corn is keeping export offers competitive on the world stage, with a softer U.S. dollar relative to 2024 surely helping as well.
In corn technicals, September corn’s break below $4.00 will be important to monitor for buying interest through the balance of the week, as prices briefly rallied back above the mark early Tuesday before fading throughout the rest of the session. If the bearish bias continues and corn traders decide to take a run at the record net-short noncommercial position (likely less than 100,000 contracts away at this point), then the market is likely looking at a bearish target of $3.70 for September futures or $3.85 to $3.90 on December futures to complete the retracement back to August 2024 lows.
The DTN National Corn Index finished Monday at $3.91. Tuesday’s futures close and implied corn basis of 13 cents under the September board would indicate the index on Tuesday afternoon to be near $3.85.
