US Futures Close in the Red

Wheat

Wheat futures ended the session lower across all key contracts. The Chicago Board of Trade (CBOT) September 2025 wheat contract closed at $5.48 1/2 per bushel, down 8 1/4 cents, as both HRW and HRS markets posted similar declines. Despite a boost in year-over-year export inspections—Mexico and Brazil being the main destinations—traders were cautious. Harvest progress data from USDA showed 53% of the winter wheat crop had been harvested, slightly behind the average pace. Conditions held steady at 48% good-to-excellent. In spring wheat, 61% of the crop is headed, but crop condition ratings slipped 3 points to 48%. In global markets, Russia cut its wheat export duty to zero (from July 9 to July 15), aiming to boost lackluster shipments. France’s harvest is just 11% complete, though crop quality remains decent.

Corn

Corn futures were under pressure throughout Monday’s session, with the September 2025 contract closing at $4.03 1/2 per bushel, down 16 3/4 cents. Trade tensions contributed significantly to bearish sentiment, especially following President Trump’s announcement of increased tariffs on Japanese and South Korean goods. Even with positive export news—1.491 million metric tons (MMT) shipped last week, up nearly 46% from the prior year—market momentum remained negative. Crop progress showed that 18% of the U.S. crop is silking and 3% is in the dough stage, with condition ratings improving slightly to 74% good-to-excellent. However, speculators expanded their net short positions to over 206,000 contracts, underscoring market skepticism.

Soybeans

Soybean markets were hit the hardest on Monday, with the August 2025 contract closing at $10.31 1/2 per bushel, down 24 cents. The declines followed a 64.5% week-over-week jump in export inspections, led by shipments to Egypt, Indonesia, and Mexico. Reports earlier in the day highlighted Indonesia’s $34 billion deal to buy U.S. goods, including soybeans and energy products. However, this was quickly overshadowed by Trump’s announcement of a 32% tariff on Indonesian imports starting August 1. Meanwhile, U.S. crop conditions remained steady at 66% good-to-excellent, and the Brugler500 index ticked up one point to 369. Argentina finished its 2024/25 soybean harvest at 50.3 MMT, while Brazil saw soybean prices firm slightly in the spot market despite a drop in the U.S. dollar.

Global Grain Market Influencers

Strong Chinese Demand for Ukrainian Barley

Chinese firms secured up to 700,000 metric tons of Ukrainian barley in a major export push that drove up prices by as much as $8/ton. The deals account for roughly a quarter of Ukraine’s total expected barley exports for the 2025/26 season. Ukrainian analysts highlighted that the country's preferential trade status with China continues to give it an edge, with contracts reaching $240/ton CIF China. Despite a sluggish start to the season, Ukraine’s barley harvest is already underway, with strong demand fueling bullish sentiment.

Indonesia Strengthens Wheat Ties with the US

Indonesia, the world’s second-largest wheat importer, signed a memorandum to import at least 800,000 tons of U.S. wheat in 2025, with plans to ramp up to 1 million tons annually between 2026 and 2030. The move is strategic, aimed at securing favorable terms ahead of tariff escalations by the U.S. government. Although this volume represents a fraction of Indonesia’s total demand—forecast at 12 million tons for the 2025/26 season—it signals stronger trade cooperation amid uncertain geopolitical dynamics.

Russia Eliminates Wheat Export Tax to Regain Market Share

In a surprising move, Russia’s Agriculture Ministry reduced the wheat export duty to zero (from July 9 to July 15) for the first time since 2021. The decision follows a steep 28% drop in year-on-year wheat exports, and only 1.12 million tons of wheat exported in June—one-quarter of what was shipped in the same month a year ago. Russian officials are determined to reverse declining global competitiveness, even as weather delays continue to slow harvest progress in central regions.

FAO Projects Record Grain Output in 2025/26

The United Nations' Food and Agriculture Organization (FAO) projects that global grain production will reach a record 2.93 billion tons in the 2025/26 marketing year. This increase is largely due to better wheat yields and higher-than-expected stockpiles, which are now forecast at 321 million tons—11 million higher than previously estimated. With the global stock-to-use ratio standing at 30.3%, the outlook is for ample supply, which may limit future price rallies unless demand surprises to the upside.

Monsoon Rains Fuel Indian Agricultural Optimism

India’s early and above-average monsoon rainfall has enabled early sowing of major crops like rice, pulses, and oilseeds, boosting hopes for a record harvest. Farm officials noted that June precipitation was 9% above normal, with July expected to be similarly favorable. If the trend continues, it will benefit not only the summer crop but also the upcoming winter season. India’s government is also promoting ethanol-driven corn cultivation and incentivizing premium rice varieties for export, adding momentum to production across sectors.

China Diversifies Soymeal Sources with Ethiopia

China has approved Ethiopian soybean meal imports starting July 3, further diversifying its supply base amid ongoing tensions with major exporters like the U.S. and Brazil. Ethiopia joins an expanding list of approved suppliers, including Argentina, Uruguay, Russia, and Belarus. While the volume of Ethiopian exports may be modest, the decision signals China’s intent to reduce reliance on whole soybean imports by acquiring more processed products directly.

Argentina Wraps Up Soy Harvest, Focuses on Corn and Wheat

Argentina completed its soybean harvest at 50.3 million tons, capping off a season marked by weather extremes—from summer droughts to autumn rains. The country’s corn harvest is 61.7% complete, with final output expected at 49 million tons. Meanwhile, wheat planting progress lags at 78.2%, affected by excessive rainfall. Despite the challenges, Argentina remains a dominant player in global soymeal and corn exports.

Brazil’s Soy Sales Lag, Spot Market Sees Mild Gains

Soybean sales in Brazil are trailing behind historic averages. As of July 4, 69.8% of the 2024/25 crop had been sold, compared to a 5-year average of 82.1%. Currency fluctuations have dampened export enthusiasm, with the Brazilian real appreciating 1.6% over the past week. Nonetheless, local spot markets experienced increased liquidity, driven by domestic processing demand and biodiesel-sector optimism.

Brazilian Corn Prices Hit Annual Lows

Corn prices in Brazil have fallen to their lowest levels of 2025, driven by abundant supply, weak export parity, and storage constraints. In Campinas, corn dropped 5.1% to BRL 64.15 per 60-kg bag—the lowest since September 2024. Farmers are increasingly flexible with prices as buyers purchase only what is necessary, expecting further declines. The strong real is also reducing competitiveness in export markets.

US Export Sales Surge

The USDA reported a surge in weekly export sales across major crops. Corn sales jumped to 1.47 MMT, soybeans to 701,000 tons, and wheat to 586,000 tons for the week ending June 26. Top buyers included Mexico for corn, unknown buyers for soybeans, and the Philippines for wheat. These figures suggest strong international interest, though trade policy developments could reshape demand in the weeks ahead.

Weather Patterns Vary Across Key Growing Regions

Rainfall and temperature trends are showing mixed effects across major agricultural zones. The U.S. Midwest continues to receive widespread rain, mostly beneficial for pollinating corn and soybeans. In Canada, dry conditions in Manitoba may ease with a forecasted storm later this week. Europe and the Black Sea are seeing heat that benefits harvest but stresses spring crops. Drought remains a concern in Australia, while Brazil enjoys drier conditions that support the safrinha corn harvest. In China, central and northeast regions are receiving helpful rains, though parts of the North China Plain remain at risk due to dryness.

Fertilizer Prices Ease as Input Costs Fall

Fertilizer markets are experiencing some relief as natural gas prices—key to nitrogen fertilizer production—have fallen nearly 10% over the past week. UAN (urea ammonium nitrate) prices in the Black Sea dropped 8.84% to $253/ton. While benchmark prices remain mixed, the broader downtrend in production costs could eventually provide relief to global farmers contending with high input inflation.