Wheat – July 2025 CBOT: $5.25/bu (up 5¾ cents)

Wheat prices began the week on a rebound after mixed performance last Friday. The July CBOT contract rose 5¾ cents this morning, reversing some of last week’s softness. The latest Commitment of Traders report showed a sharp increase in speculative short positions—now at their largest level in nearly two years—with Chicago net shorts at 126,895 contracts. Despite lagging actual exports, commitments have reached 97% of the USDA forecast. FranceAgriMer reported a 1-point decline in the soft wheat crop quality to 73% good/excellent, and South Korea and Saudi Arabia purchased over 670,000 MT of U.S. wheat, lending support to prices.

Corn – July 2025 CBOT: $4.43½/bu (up 4½ cents)

Corn futures posted early gains, with July up 4½ cents after finishing last week lower. Pressure continues from strong global supply expectations, both from Brazil’s safrinha crop and good sowing conditions in the U.S. Despite this, export commitments are near 94% of USDA’s revised target, and actual shipments are slightly ahead of pace. Speculative money shifted to a net short position of nearly 85,000 contracts last week. On the cash side, average prices sit at $4.15½. The market appears cautiously supported by export fundamentals and planting optimism.

Soybeans – July 2025 CBOT: $10.50/bu (up 4¾ cents)

Soybeans climbed this morning after last week’s minor losses, driven in part by slow Argentine harvest progress, now at 65% versus a 70% average. Managed money increased net longs to 38,407 contracts. However, concerns linger over weak demand in Brazil due to strong supply and a potential U.S.–China trade truce. U.S. soybean bookings are at 95% of USDA targets, but actual exports trail slightly. Soy oil and meal remain volatile, though byproducts are expected to reach record production levels in the 2025/26 season.

Global Drivers Reshaping Grain Markets

An array of interwoven developments continues to shape the direction of global grain markets this week, spanning weather shifts, geopolitical trade actions, and production outlooks across key exporters.

Brazil’s confirmation of its first commercial outbreak of bird flu has disrupted global poultry trade. Major buyers including China, the EU, and South Korea have triggered 60-day bans on imports, which could redirect grain demand flows, especially corn and soy used in feed. The affected state, Rio Grande do Sul, represents 15% of Brazilian poultry exports, with some 17,000 birds already lost. Efforts are underway to isolate the outbreak and negotiate shortened embargoes.

In Argentina, severe flooding across the Buenos Aires province is compounding delays in the soybean harvest. Rainfall of up to 260mm has impacted logistics and crop quality in the country, which is the world’s top exporter of soybean meal and oil. This flooding follows an already slow harvest season, and could disrupt export flow in the coming weeks.

Meanwhile, Argentina’s currency reforms are finally showing results. Grain sales rose to 11.6 million metric tons after April’s slump, thanks to a narrowing gap between official and market exchange rates. With export tax breaks expiring in June, a rush to finalize deals is expected. First-half grain export revenues are forecast at $18.2 billion.

In Brazil, soybean and corn prices remain under pressure due to high domestic supply and the specter of a U.S.-China trade thaw that could dampen demand for Brazilian exports. Soybean productivity has held firm in major producing regions, while corn prices continue to slide amid expectations of a record safrinha crop.

The USDA’s recent report projects global corn production to rise to 1.26 billion tons in 2025/26, with consumption slightly outpacing at 1.27 billion tons. For soybeans, global output is forecast at a record 426.82 million tons, with Brazil alone expected to hit 175 million tons—up 3.6% from the previous season.

European markets are facing a more optimistic sowing outlook. Germany’s winter wheat area is up 12.2% year-over-year, reaching 2.78 million hectares. Increased acreage and favorable weather may boost yields, even as spring crops like barley and maize face reductions.

China’s import appetite is showing signs of cooling. April figures revealed drastic year-on-year declines in grain imports: corn fell 84.5%, soybeans 29.1%, and wheat 61.2%. This retreat is likely due to elevated domestic stocks and shifting trade strategies amid ongoing U.S. tensions.

Weather continues to be a double-edged sword for global crops. In North America, widespread rains have supported early wheat growth in the Dakotas and parts of the Midwest but delayed fieldwork. Cold temperatures could bring patchy frost. In contrast, Brazil’s corn regions remain mostly dry, pushing crops to rely on subsoil moisture. Southern Brazil and Argentina are expected to receive more rain, aiding winter wheat planting but possibly exacerbating soybean harvest delays.

Favorable rainfall across Ukraine and parts of Russia is improving crop conditions in the Black Sea region. However, deficits persist, and long-term weather forecasts point toward a possible drier trend in southwestern Russia—a risk for winter wheat and newly planted corn.

Australia’s wheat outlook remains challenging due to expanding drought, especially in key producing belts. Meanwhile, China’s central wheat areas are under stress from dryness during crucial reproductive stages, although some late-month showers may offer relief.

Finally, in the vegetable oil sector, tension between palm oil giants Indonesia and Malaysia is growing. Indonesia plans to hike its palm oil export levy to up to 10%, prompting industry pushback. Malaysia, in contrast, is strengthening trade ties with China, looking to boost its 2024 exports. India also posted an increase in oilmeal exports in April, including a surge in soymeal and rapeseed meal shipments.

Taken together, these developments point to a volatile trading environment for grains this week, as the market digests shifting supply-demand dynamics, policy interventions, and persistent weather risks.