Wheat futures posted losses across all three major U.S. exchanges on Tuesday. The September 2025 CBOT wheat contract closed at $5.08¼ per bushel, down 8½ cents. Kansas City HRW led the downturn, shedding 12 to 12½ cents, while MPLS spring wheat eased by 2 to 4 cents. USDA’s latest Crop Progress report showed spring wheat conditions at 48% good-to-excellent, down 1% from last week, with notable quality deterioration in South Dakota and Idaho. U.S. June wheat exports hit 1.719 MMT, a four-year high, though down over 20% from May. Meanwhile, a South Korean importer secured 65,000 MT of U.S. wheat in a private deal, and the EU’s soft wheat exports lag behind last year’s pace.

Corn futures were pressured by ongoing bearish sentiment, with the September 2025 contract settling at $3.81½ per bushel, down 5½ cents. Despite USDA confirming a private export sale of 128,000 MT to unknown destinations and strong June export figures (6.747 MMT, the second-largest for the month on record), the market remained subdued. Weekly crop ratings held steady at 73% good-to-excellent, though state-level variation showed significant shifts—Michigan improved markedly, while Kansas and Ohio saw notable declines. A South Korean tender for 140,000 MT of corn added some demand-side hope, but wasn't enough to reverse the day's losses.

Soybeans saw modest weakness despite strong underlying export fundamentals. The September 2025 contract finished at $9.71½ per bushel, down 3¾ cents. While June soybean exports rose over 12% year-on-year to 1.501 MMT, they declined nearly 6% from May. Soybean meal exports reached a record for June, while soyoil exports fell to their lowest in eight months. The USDA reported a slight deterioration in crop conditions, now at 69% good-to-excellent. Illinois and Nebraska saw the most notable drops. Despite these fundamentals, bearish crude oil prices weighed on soyoil, dragging the broader complex lower by the close.

Across the global landscape, Japan’s record-breaking heatwave continued to dominate headlines. The country reported its highest-ever temperature of 41.8°C, prompting fears of another rice crisis following last year’s shortage. The government has rolled out emergency support, including pest control and drought mitigation, especially after a surge in stink bug infestations in key rice-growing areas. More than 53,000 people have already been hospitalized due to heatstroke, intensifying concerns over food security and public health.

In Brazil, the second corn harvest reached 81% completion, up from 68% a week ago. Although still behind last year's pace, drier conditions have accelerated progress. Brazilian soybean planting is projected to rise by 2% in 2025/26, reaching 48.6 million hectares, though expansion may be capped by tight credit and modest export opportunities to China. StoneX now forecasts soybean output at 178.2 million tons, up 5.6% year-on-year, while corn output has been revised up to 111.7 million tons.

Ukraine remains cautiously optimistic about its grain outlook. Officials now anticipate 22 million tons of wheat and 28 million tons of corn for the 2025 harvest, potentially matching last year’s 56 million-ton total. Despite EU limits cutting Ukrainian wheat imports into the bloc to just 1 million tons, strong demand from North Africa, the Middle East, and Southeast Asia is keeping export prospects firm. Sown areas for winter wheat in 2026 are forecast to expand by 6.4%, driven by reduced soybean acreage and favorable pricing.

In the U.S., uncertainty looms as the Trump administration finalizes a new round of reciprocal tariffs, potentially affecting dozens of trade partners and a wide array of commodities, including food and agricultural goods. The average U.S. tariff rate is expected to rise to 15.2%, stoking fears of supply chain disruptions. Exemptions have been made for humanitarian and essential items, but global markets are bracing for a potential escalation in retaliatory measures, particularly from countries like India and Switzerland.

Malaysian palm oil prices jumped 2.46% overnight, driven by the government’s new plan to raise replanting rates to 4% by 2026 via a proposed $331 million fund. This move is intended to support long-term yield improvements, especially after last year’s elevated fresh fruit bunch prices discouraged tree removal. Meanwhile, lingering competition from Indonesian discounted July sales—before the August tax hike—continues to challenge Malaysian efforts to balance inventories.

Egypt has now secured over 4 million tons of domestic wheat for the 2025 season, ensuring more than six months of strategic reserves. The strong domestic procurement comes at a time when global markets remain wary of output declines in Russia and Ukraine. In Brazil, wheat prices fell for a third consecutive month in July, influenced by low import parity and a weaker dollar. Still, productivity gains in Paraná could offset some of the price pressure despite reduced planted areas.

Weather remains a decisive factor in global grain production. In North America, mild and scattered rains continue to support corn and soybean development, though they may affect wheat quality. Canada’s rain is likely too late to benefit mature crops but may help suppress wildfires. Brazil faces localized harvest delays due to rain in the south, while Argentina remains mostly dry. Europe is receiving moisture in the north, risking delays and potential quality issues for wheat. The Black Sea region remains dry, raising alarm for corn development. Meanwhile, rising tropical activity in the Atlantic poses potential risks for U.S. logistics later this week.