Wheat

Wheat futures saw mild declines on Thursday after Wednesday's robust gains. September 2025 CBOT wheat contracts settled at $5.56¾, down 7¼ cents on the day. Market participants engaged in light profit-taking following a surge of up to 19 cents on Wednesday. Expectations for weekly U.S. export sales between 200,000 and 600,000 metric tons tempered further movement. On a broader scale, dry harvest conditions in parts of Russia and export regulatory shifts in Romania and Moldova continued to cast a shadow over supply-side projections.

Corn

Corn futures showed slight strength heading into the holiday weekend. The September 2025 contract closed at $4.20¼, marking a modest 2¼ cent rise. Traders were influenced by steady ethanol data and optimism surrounding upcoming USDA export sales numbers, which are expected to reflect 0.4 to 1 million metric tons in sales. Brazil’s second corn crop continues to support global supply, yet ongoing dryness in parts of Ukraine and policy shifts in Argentina remain downside risks.

Soybeans

Soybeans edged higher Thursday, with the August 2025 contract closing at $10.55½, up 2 cents. The market showed resilience following strong gains earlier in the week, supported by favorable export trends, tightening U.S. stocks, and technical strength. Soymeal and soyoil prices also contributed to bullish sentiment, with USDA’s Fats & Oils report confirming robust crush and oil demand. Export demand from Asia and lingering concerns over Argentina’s new grain tax policy continue to drive positioning.

Global Drivers Shaping the Grain Market Landscape

China’s Fufeng Group remains in focus as it finalizes a U.S.-based corn milling project. The North Dakota facility was scrapped, but Illinois' Douglas County is now a likely location. The move comes amid heightened U.S.-China tensions and reflects broader geopolitical challenges influencing grain-related investments.

Weather remains the dominant factor influencing market expectations. Beneficial rains have improved soil moisture across key areas of the U.S. Corn Belt, yet projections show increasingly hot and dry conditions into mid-July. This duality in weather adds volatility to yield projections.

In Argentina, continued dryness is hindering ideal conditions for winter wheat development. The Pampas may receive rain next week, but concerns persist. Meanwhile, Brazil’s second corn crop harvest remains on track, although specialty crops continue to report frost-related losses from last week.

The European grain belt anticipates more rainfall over the weekend. While this will benefit corn and sunflower development in northern regions, it poses challenges for maturing winter wheat. In France, hot and dry conditions continue to pressure yields.

Ukraine is experiencing corn development delays in southern and eastern zones due to prolonged dryness. While winter wheat harvest has begun, forecasts remain critical for continued progress. Ukraine’s corn production outlook has been downgraded to 28.6 MMT by the IGC.

Romania, on the other hand, is seeing an exceptional season. With wheat output forecasts ranging between 13.3 and 14 MMT—well above the EU Commission’s 10.4 MMT estimate—the country is emerging as a top regional performer. Romania’s decision to extend Ukrainian grain licensing through 2025 aims to protect local producers and shape market flows.

Russia has upgraded its wheat production forecast to 83 MMT thanks to improved conditions in central regions. However, uneven rainfall continues to threaten output in other areas. These weather disparities keep Russia’s full harvest potential uncertain.

Argentina’s June grain exports surged to a record 23.53 MMT—36% of its half-year total—as farmers rushed to ship before new tax rates took effect on July 1. Corn export taxes rose to 12%, while soybean duties also increased. A slowdown in July volumes is anticipated.

India’s palm oil imports rose 61% month-on-month in June, hitting an 11-month high. This strategic buying supports palm oil prices in key exporting nations like Malaysia and Indonesia, where exports rose 4.3% last month.

Palm oil futures are projected to stay between 3,800–4,000 ringgit/ton into year-end. However, discounts to soy oil could support sustained demand from top importers like India and China, boosting oilseed-related markets.

U.S. ethanol output fell slightly to 1.076 million barrels per day, but stocks declined and exports climbed—suggesting steady corn usage. The USDA's weekly sales report and the latest WASDE will be closely watched after the holiday.

Lastly, the Antarctic Oscillation is entering an extreme positive phase, likely to affect Southern Hemisphere weather. This could alter development conditions for Australian and South American crops during key growth stages, especially wheat and canola.