Wheat, Corn, and Soybeans – Thursday Opening Snapshot

Chicago wheat prices for the September 2025 contract opened Thursday at $5.08½ per bushel, up 8½ cents in early trading after a mixed midweek session. The Kansas City market led the rally in winter wheat, while Minneapolis spring wheat remained under pressure. Despite a new South Korean purchase of 65,000 metric tons and expected weekly U.S. export sales between 350,000 and 600,000 metric tons, traders are cautious amid global supply concerns. Overall, wheat prices remain lower month-to-date, and year-to-date futures are still in decline across all three U.S. exchanges.

Corn prices began Thursday with gains of 2½ cents, pushing the September 2025 contract to $3.79¾ per bushel. Wednesday’s session saw minor losses across contracts, but bullish sentiment is slowly returning. Ethanol production fell to 1.081 million barrels per day for the week ending August 1, prompting a 960,000-barrel inventory drawdown. U.S. corn export sales are forecast between 1.3 and 2.5 million metric tons for the new crop, although Brazil’s July corn exports dropped by over 31% year-on-year due to a delayed second crop harvest and logistical challenges at ports.

Soybeans saw early Thursday gains of up to 3 cents, lifting the September 2025 contract to $9.65½ per bushel, after Wednesday’s 6-cent drop. Soymeal and soy oil futures also lost ground midweek, with soymeal down between $2.10 and $4.40. Brazil shipped a record 12.257 million metric tons of soybeans in July, and China imported 11.67 million tons—a July record driven by strong Brazilian flows and U.S. trade uncertainty. Export sales estimates for U.S. soybeans range from 100,000 to 300,000 metric tons for the old crop, and up to 500,000 metric tons for the new.

Global Developments Driving Market Volatility

Brazil’s soybean dominance continues to reshape global trade flows. According to the Trade Ministry, Brazil exported 12.3 million metric tons of soybeans in July, a 9% year-on-year increase. Soybean export revenues totaled $5 billion despite a 7.1% drop in average price per ton. Shipments to China reached a record 9.6 million tons for the month, with January–July exports totaling 57.9 million tons—up 5% year-on-year. This strength, coupled with recent U.S.–China trade tensions, has led Chinese buyers to avoid booking any U.S. soybeans for Q4, favoring Brazil instead.

China's soybean imports reached a July record of 11.67 million tons, up 18.5% from last year, largely due to heavy Brazilian shipments and risk hedging amid trade friction with the U.S. Analysts expect imports to remain above 10 million tons in August and September. However, despite the strong inflow, domestic soymeal inventories are rising due to weak feed demand. This oversupply could weigh on soymeal prices and influence grain markets as Chinese feed mills adjust future purchases.

Ukraine is emerging as a key barley supplier to China. UAC reported that Ukraine shipped 250,000 metric tons of barley to China in July and aims to export another 250,000 to 300,000 tons by August 20. The total volume for July–August is expected to reach 770,000 tons, but concerns are rising due to July’s heavy rains, which hampered harvest quality and pace. With Ukrainian farmers forecasting only 4.5–5 million tons of barley, mostly consumed domestically, deficits could arise by December—tightening regional supply.

U.S. ethanol production dropped 15,000 barrels per day to 1.081 million last week, according to the Department of Energy. Stocks fell to 23.756 million barrels, down 3.9% from expectations. Despite production declines, ethanol demand remains firm, with refiner inputs slightly up. This tightening of ethanol supply—alongside Brazil’s second crop delays—could add upside pressure to corn prices in upcoming sessions.

Argentina’s soybean industry is facing competitive headwinds following President Javier Milei’s cut in export taxes. Soymeal and soy oil export duties were reduced from 31% to 24.5%, and raw soybeans from 33% to 26%. While this narrows Argentina’s tax advantage, Brazil’s soymeal exports may benefit from the shift, as their processed products become more competitive. Industry group Abiove anticipates this could open new market opportunities, especially in regions where Argentina and Brazil compete directly.

In Asia, China’s July edible vegetable oil imports fell 9.9% year-on-year to 534,000 tons. This decline could push up regional soy oil demand. Meanwhile, China is urging top pig breeders to reduce sow herds by about 2% to combat pork oversupply, which has dragged prices down 20% in the past year. If successful, these measures could lower soymeal demand further, influencing global soy product markets.

Palm oil prices are expected to remain stable around 4,000 ringgit/ton through 2025, supported by Indonesia’s biodiesel policies and favorable weather. The European Union’s decision to grant Indonesia zero tariffs for one million tons of crude palm oil annually could boost exports to the bloc by over 50% in the coming years. This trade shift might also influence global vegetable oil flows and demand for soybean oil as a biofuel feedstock.

Finally, weather is a growing concern across major grain regions. Heatwaves are forecasted to expand across the U.S. Midwest from August 18 to 25, potentially affecting corn and soybean yields during critical stages. In Australia, timely rainfall continues to benefit wheat crops, while China's North Plain is experiencing heavy rain that supports summer crop development. In South America, dry weather helped Brazil’s corn harvest, but rain may come too late for Canada’s maturing wheat. Overall, weather variability remains a key driver of market sentiment heading into the second half of August.