With Friday's USDA Crop Production and WASDE reports set to confirm the tightest US wheat balance sheet in decades, wheat is surging to the session's front while corn and soybeans absorb disappointing export sales and retreat from Wednesday's energy-driven highs.

Thursday's session opens with a striking divergence: wheat up 8 to 11½ cents to lead the entire grain complex, while corn is 2 to 4¼ cents lower on the second-weakest weekly export sales figure of the marketing year, and soybeans are falling 8½ to 15¼ cents as the front months retrace Wednesday's Iran-driven surge despite a fresh 256,000 MT Chinese purchase announced this morning. The backdrop is Friday's USDA Crop Production and WASDE update — the most anticipated monthly report since the June acreage bombshell — with trade surveys pointing to cuts in all-wheat production and corn carryout that would further tighten both domestic balance sheets.

Wheat Breaks Higher on WASDE Eve With $1 Billion of Demand Fundamentals Behind It

All three wheat classes are leading Thursday's session with broad-based buying: Chicago SRW July up 11½ cents to $6.11, KC HRW 6 to 9¼ cents higher, and MPLS spring wheat 6 to 7 cents firmer. The buying is occurring against a clean technical backdrop — July Chicago delivered 25 overnight notices, suggesting commercial longs are being re-established after July's liquidation — and a forward-looking fundamental narrative that is the most compelling for wheat in years. Friday's Bloomberg WASDE survey targets all-wheat production at 1.527 billion bushels, down 17 million from last month, with all-winter wheat at 1.004 billion, down 26 million, and spring wheat at 458 million. The average winter wheat production estimate at 1.001 billion is 29 million below the June figure — and if confirmed, places production at its lowest level in over 50 consecutive years. A Taiwan tender for 98,150 MT of US wheat with a July 15 deadline adds timely physical demand confirmation to the fundamental backdrop.

Global Wheat Supply Revisions Paint a Mixed but Net-Tightening Picture

Ukraine raised its 2026/27 wheat production estimate by 1 MMT to 23 MMT — a modestly bearish offset — while the Rosario Grains Exchange simultaneously raised Argentine wheat by 0.5 MMT to 20.5 MMT for 2026/27. Argentine wheat plantings have reached 88% of the intended area according to BAGE, confirming the aggressive early planting pace that has been a consistent theme through June and into July. On the bearish side, these Black Sea and Southern Hemisphere supply improvements are partially offset by Expana trimming EU wheat by 0.9 MMT to 128.3 MMT — the continued European crop deterioration story that has been building since late June. The net effect of Thursday's pre-WASDE revisions is roughly neutral, leaving Friday's USDA interpretation of the global balance sheet as the definitive supply statement the market will trade against next week.

Corn Export Sales Miss Badly — Second Lowest Total of the Marketing Year

Old-crop corn export sales for the week of July 2 came in at 565,810 MT, missing the expected range of 600,000 to 1.1 MMT and marking the second lowest weekly total of the marketing year. The figure was down 55.2% from the same week last year. New-crop sales at 401,667 MT also fell short of the expected 600,000 to 900,000 MT range and were 44.8% below year-ago levels. The holiday-week timing partly explains the miss — July 4 volumes are structurally lighter — but the scale of the year-over-year gap is harder to dismiss. Accumulated 2026/27 corn commitments of 6.55 MMT remain 20.8% above last year, providing a longer-term demand cushion, but the single-week miss reinforces why September corn is retreating to $4.30 this morning. Eighty-eight delivery notices were issued against July corn overnight — a large volume that signals commercial hedgers actively liquidating nearby positions.

Corn Weather Watch: Southeast Corn Belt Gets Rain, But the Northern Periphery Stays Dry Heading Into the Heat

Scattered but in some cases healthy rainfall fell across Iowa, eastern Nebraska, Kansas, southern Minnesota, and Wisconsin over the past 24 hours — useful pre-heat moisture for those areas. Over the next 5 days, 1 to 2 inches of rain is expected across the southeast third of the corn and soybean belt, with lighter amounts across the far Western Corn Belt. The Northern and Southern Plains receive only scattered rains, while the Northern Midwest takes a break from the recent heavy precipitation. The 8-14-day outlook is the more consequential read: the high-pressure ridge is now expected to shift further west compared to the most extreme earlier forecasts, limiting yield-threatening heat primarily to the Northwestern Plains rather than the core Corn Belt. This moderation in the week-two heat forecast is the primary reason the weather premium is not sustaining Monday's gains — corn at $4.25 in September is the midpoint of the two-week range, and without a fresh heat intensification signal, that is where the market finds equilibrium heading into Friday's production data.

Friday's WASDE: Bloomberg Survey Expects 66-Million-Bushel Cut in Old-Crop Corn Stocks

The Bloomberg poll for Friday's WASDE projects old-crop corn ending stocks cut 66 million bushels to 2.079 billion bushels, with new-crop carryout down 61 million to 1.899 billion. These are meaningful reductions that, if confirmed, would push the corn balance sheet to its tightest level since 2012 and represent a direct validation of the record quarterly stocks miss from Tuesday's report. With US crop ratings at 67% good/excellent — described as currently average — the USDA is not expected to come off its 183 bushels-per-acre trendline yield this early in the season. The EIA ethanol data confirmed on Wednesday that production ran below the pace required to reach the USDA's corn-for-ethanol estimate for a twelfth consecutive week, a figure the July WASDE must eventually reflect — though analysts expect the adjustment to come via a larger corn feed and residual usage increase rather than a wholesale ethanol demand downgrade. The Argentine production situation remains a divergence the WASDE will need to address: BAGE holds its forecast at 64 MMT and the Rosario Grain Exchange at 68 MMT, both well above the USDA's 61 MMT, with harvest now at 56% complete.

Soybeans Retreat From $12 as Crush Margins Collapse and Export Sales Disappoint

August soybeans are at $11.87¼ at Thursday's open, down $0.06, with November $0.04¼ lower at $11.88 — both contracts stalling after briefly trading back above $12.00 on Wednesday. Old-crop soybean sales for the week of July 2 came in at just 54,349 MT, barely within the 50,000 to 500,000 MT expected range and only marginally above last week's marketing year low. New-crop sales at 408,250 MT were on the higher end of estimates and the second-largest total of the marketing year — a constructive new-crop booking signal that partially offsets the weak old-crop figure. Despite the headline price retreat, two demand signals remain actively supportive: USDA announced another flash sale of 256,000 MT to China this morning — 136,000 MT for 2026/27 and 120,000 MT to unknown destinations — bringing the cumulative Chinese and unknown-destination purchases announced since Monday to well over 800,000 MT. Crush margins at $2.29½/bu are well below the levels at which processors would expand operations aggressively, and with soy oil at a fresh three-week high as crude oil holds near $74 on Iran tensions, the internal complex dynamic of firm oil versus weak meal persists.

Soy Oil at a Three-Week High on Sustained Iran Risk Premium; D4 RINs Near $2.50

August soy oil is at 71.11, up 26 points and at a three-week high, as crude oil holds near $74.15 following Wednesday's Iran-driven energy spike. D4 RIN credits are trading near $2.50, with the break-even price for soybean oil in California renewable diesel manufacturing near $0.90 per pound — a level that soy oil is approaching but has not yet consistently sustained. The RIN credit level is important because it defines the floor below which biodiesel and renewable diesel manufacturers lose economic incentive to blend soy oil into their feedstock mix. With soy oil at 71 cents and the break-even at 90 cents, there is still a meaningful gap between current market pricing and the level that would fully stimulate biofuel demand recovery. Bean oil sales for the week at just 878 MT confirm the structural disconnect between improving oil prices and actual commercial offtake — the market is pricing geopolitical oil risk rather than confirmed biodiesel demand recovery.

Wheat Export Sales and Physical Demand Confirm the Structural Tightening Story

Wheat export sales for the week of July 2 came in at 313,103 MT for 2026/27, on the lower end of the 250,000 to 600,000 MT expected range but up from last week and still confirming active market engagement. The figure was 45.86% below the same week last year — a year-over-year comparison that continues to reflect the structural US export competitiveness gap that has been a consistent headwind throughout the 2025/26 marketing year. The Taiwan tender for 98,150 MT with a July 15 deadline is the most concrete single demand signal in Thursday's morning data, adding evidence that the price recovery since the June lows is beginning to attract traditional US wheat buyers back to Gulf origin. US equities are mixed and the dollar is slightly higher in two-sided trade — a neutral macro backdrop that leaves Friday's USDA data as the unambiguous price-setting event for the close of the week.

Wheat

Jul '26 CBOT SRW wheat is at $6.11 at Thursday's midday, up 11½ cents — the session's clearest price signal and the complex's best-performing crop. In the morning outlook, CGO Sep-26 opened at $6.07, down less than a cent, while KC Sep-26 was at $6.43½, down 1¾ cents, and MIAX Sep was unchanged at $6.30¾ — all three subsequently reversed to trade firmly higher through midday. Friday's Bloomberg production survey targeting all-wheat at 1.527 billion bushels and winter wheat at 1.004 billion — the latter 29 million below June's estimate — provides the clearest fundamental justification for the session's leadership position. The Taiwan tender for 98,150 MT adds physical demand confirmation. US 2026/27 wheat stocks are expected to be trimmed 30 million bushels to 714 million in tomorrow's WASDE, while Argentine plantings at 88% complete and Ukraine raising production 1 MMT to 23 MMT represent the competing bearish supply inputs.

Corn

Jul '26 CBOT corn is at $4.32½ at Thursday's midday, down 2¼ cents. In the morning outlook, Sep-26 was at $4.30 and Dec-26 at $4.51¼, both $0.05 lower, with December having topped out just short of its 50% Fibonacci retracement at $4.66 on Wednesday. The CmdtyView national average cash corn price is 3¾ cents lower at $4.00¼. The session's weakness traces directly to the export sales miss — old-crop at 565,810 MT against a 600,000 to 1.1 MMT expectation, new-crop at 401,667 MT against an expected 600,000 to 900,000 MT — both figures 40 to 55% below year-ago. Friday's WASDE survey targets old-crop stocks cut 66 million bushels to 2.079 billion and new-crop down 61 million to 1.899 billion, with production unchanged as the USDA is unlikely to move from its 183 bpa trendline yield at this early crop development stage. Argentina's divergent production at 64 MMT versus 68 MMT (BAGE versus Rosario) against USDA's 61 MMT is the balance sheet discrepancy most likely to be addressed in tomorrow's report.

Soybeans

Jul '26 CBOT soybeans are at $11.86½ at Thursday's midday, down 8½ cents, with Aug-26 at $11.87¼, down 6 cents, and Nov-26 at $11.88, down 4¼ cents. The CmdtyView national average cash bean price is 14½ cents lower at $11.31¾. August soymeal is down $3.40 to $4.60 across contracts while soy oil is up 43 to 55 points. Crush margins at $2.29½/bu with bean oil price value holding above 53%. The retreat from $12.00 follows Wednesday's stall precisely at that level in August and November — a technically significant double-top signal that requires a confirmed close above $12.00 to invalidate. The fresh 256,000 MT Chinese flash sale this morning partially offsets the weak old-crop sales figure, and US FOB Gulf offers remaining at a $0.10 to $0.20 per bushel premium over Brazilian bids through November provides physical support. Friday's WASDE is expected to hold old-crop stocks near unchanged at 337 million bushels while raising new-crop to 330 million on higher acreage — a broadly neutral outcome for soybeans that leaves weather and Chinese demand as the dominant week-ahead variables.