Top Tips on a Thursday
Grain markets rebounded this month after a difficult June, but the harvest lull likely will change that by month’s end. Markets are now moving on three things: weather concerns as heat and dryness hit the U.S. Corn Belt and Europe, escalating geopolitical tensions disrupting Black Sea grain exports and significant uncertainty around Chinese demand for both corn and soybeans.
The rally has pushed prices back to the high end of recent ranges, with wheat challenging contract highs and crude oil recovering over 20% from early July lows. Market sentiment is shifting into neutral. After this month, a pre-harvest could take hold.
- Know your cash flow needs.
- Use actual production costs and sales to date to rework crop breakevens.
- PLUS: Five ways succession planning gets stuck
Matt Wiegand, FuturesOne
“Market action this week has been driven by a combination of short-term weather and world events. With heat moving into much of the belt short term with drier weather for most into corn pollination, we have added weather premium back into the market but some moderation in temps and rains for some look to return next week. We saw good export shipments, but fresh sales announcements have slowed, and ethanol production eased a bit this past week. The other big driver is the return to fighting in the Middle East and attacks on shipping in the Azov Sea bringing increased risk premium back, especially in feed grains after the summer wheat has damaged European grain crops. The broad buying has pushed trade back to the high end of the recent ranges and is shifting the fund position back to a more substantial long position overall.
“We are getting close to seeing basis turning more seasonally negative on remaining old crop as well, so being ready to wrap up anything left over on further strength with be important. Fall fertilizer pricing and potential 2027 sales will need to be watched as well as some opportunities can pick up. We will also need to evaluate fall fuel needs with early August usually offering a price opportunity and we have seen distillate builds the last two weeks which should help if sustained by the refineries this month.” – Matt Weigand, risk management consultant, FuturesOne
ACTION: Evaluate current crop conditions with clear eyes and be willing to reward a rally for bin space and cash flow purposes.
Mike Zuzolo, Global Commodity Analytics & Consulting LLC
“I am suggesting to clients and subscribers that the past week or so has seen a needed shift in trader-investor sentiment has likely taken effect for crude and wheat, thanks primarily to the geopolitics reminding commodity “bears” that supplies are not yet assured. The most glaring examples of this are an over 20% recovery in WTI Crude Futures from the pre-July 4th lows, as well as $7 per bushel. Equivalent corn on the Paris Euronext Exchange at the time of this writing. Therefore, with wheat and crude back as price ‘leaders to the upside,’ I’ll be watching to see if the May highs in the grains and soybeans can be violated on a weekly closing basis. It seems as though weather and seasonality could be seen as added supportive fundamentals for prices. I am considering whether or not the end of July time-frame could mark the peak in the seasonal strength for CME grains as well as the trough in the seasonal weakness for boxed beef-CME cattle prices.” – Mike Zuzolo, founder, Global Commodity Analytics & Consulting LLC
ACTION: Watch for the potential to capture seasonal highs by the end of the month.
Ethan Robson, AgMarket.Net
“Summer is an important checkpoint. It’s a time to sit down and honestly ask: Did I hit the goals I set at the start of the year? What targets are still in play? What do I need to do to adjust for the back half of the marketing year?
“It’s been a year of real ups and downs with both corn and soybeans. Where do you sit right now in your program? If you’re being honest, do you wish you’d gotten more aggressive earlier in the year?
“If you haven’t started your new crop soybean program yet — or feel like you’re behind and need to make some catch-up sales — is this the time to act?” – Ethan Robson, hedging strategist, AgMarket.Net
ACTION: Revisit your marketing goals and strategy and, if needed, catch up on sales.
Arlan Suderman, StoneX
“USDA is dealing with a projection of around 300 million bushels in ending stocks. But if you look at that balance sheet, they're assuming that China imports about 16 million metric tons. As I kind of analyze their numbers, that's what it looks like to me. China promised 25 million metric tons. So, there's an assumption that there won't be full compliance there.
“What if China does fully comply? We run out of soybeans and suddenly we see Brazil basis drop sharply in order to cause non-China customers to go to Brazil and Brazil soybeans to be imported up into the U.S. Southeast and just reshuffling the supplies around the world if that happens. If they buy less than 16 million metric tons, then we're left with a surplus.
“On the corn side, USDA really doesn't seem to have any corn going to China in their balance sheet. So, what if China does come in to buy 4 or 5 million metric tons? And then with the drought that we're seeing in France and Germany this summer — their growing season — they may come in and import 2 or 3 million metric tons. That would add on top of that. It wouldn't be France specifically. It'd be Spain who usually gets their corn from France. So that would add on to it. And suddenly you could tighten up the corn balance sheet.
“We probably won't know those demand factors for either corn or soybean for a number of months. If that unexpected demand shows up, you could have that rebound in price. But it's going to leave both farmers and end users kind of in the clouds trying to figure out which way is it going to go? And there's going to be downside risk and then upside risk if that demand does show up. What the producer has to do is focus on what's going to keep me in business for another year during these uncertain times, particularly with high input costs.” – Arlan Suderman, chief commodities economist, StoneX
ACTION: Delve into crop budgets and yield estimates to be ready to take advantage of market opportunities.
Chris Trant, Hedgepoint Global Markets
"Grain bulls have a new ally in their war on low prices – Ukrainian attack drones. More than 115 Russian vessels in the Sea of Azov have been struck since July 6, adding to wartime logistics risk just as the Black Sea wheat harvest gets underway.
"The July 10 WASDE pegged 2026-27 Russian wheat exports at 47.5 MMT, representing 22% of total world exports, with the peak export window running August through October. Roughly a quarter of Russian exports move through the Sea of Azov.
"Russia's winter wheat harvest is just getting started, with a large crop expected. USDA estimates 88.5 MMT; SovEcon's latest is 90.3 MMT. The risk for world markets isn't production — it's logistics.
- Risk 1: Rising fuel prices delay harvest as a fuel crisis develops across Russia's wheat belt.
- Risk 2: The Sea of Azov stays closed during the export window, straining capacity and raising shipping costs.
- Risk 3: Russia retaliates against Ukrainian grain shipments, widening the disruption to both sides of the Black Sea trade.”
– Chris Trant, head of U.S. agriculture, Hedgepoint Global Markets
ACTION: Keep an eye on potential market opportunities caused by Black Sea shipping disruption.
Lauren Urbanczyk, Texas Hedge Risk Management
“This week is all about weather and geopolitical risk, with Russian headlines driving KC wheat limit up Wednesday. Wheat looks like it wants to challenge contract highs, while corn will face some resistance at the $4.75 level (vs. December.) Producers should have target orders in place to hedge corn, beans and wheat. On the cattle side we’ve seen three weeks of significant selling pressure and fund liquidation due to declining beef prices and cash prices. I would look at hedging livestock risk with options over LRP so you can take advantage of the strong present basis.” – Lauren Urbanczyk, cofounder, Texas Hedge Risk Management
ACTION: Now is the time to place target orders to hedge corn, soybeans and wheat.
Ed Usset, University of Minnesota
“June was an ugly, ugly month. The markets - corn, soybeans, and wheat - came out of the chute after July 4th, roaring on a big upswing and we needed it. And I'm treating it as a second chance.
“This is a second chance for people who may still have some old crop grain in the bins. I know in my home state of Minnesota, they've rarely had as much corn in on-farm storage as they have this year. So, there's still some corn to be priced. I'm sure there's still soybeans and wheat to be priced. Here's the second chance if you didn't get it done in that strong month of May.
“Price some new crop, too. I'm sure some farmers, maybe many farmers got something done, but did you not get enough done? And are you seeing a decent crop on the way? Here's your second chance." – Ed Usset, grain marketing economist, Center for Farm Financial Management, University of Minnesota
ACTION: Price old crop and some new crop before August.
Naomi Blohm, Total Farm Marketing
“This week's tip is about keeping a balanced approach. The most recent June USDA acreage, quarterly stocks, and July WASDE reports have shifted once what was an overly bearish sentiment for U.S. grain prices, to a short-term neutral tone. The one now in the driver's seat is Mother Nature.
“For corn, for the moment, trade seems to agree on the recent USDA trendline yield guesstimate of 183 bushels per acre, especially with weather temperatures cooling next week for much of the Midwest. Private yield estimates based on satellite imagery should start to come out in the coming week or two. If trend is perceived to be less than 180, then corn has a legit reason to potentially rally. If yield stays parked at the current perceived number of 183 bushels (or increases slightly), then production will be viewed as sufficient, keeping ending stocks are comfortable.
“The same notion is true for soybeans. Current USDA yield is estimated to be at 53 bushels per acre, and traders will eagerly watch August weather for pod filling capabilities and how that might affect yield.
“Bottom line, for those making cash sales now for old crop corn, take note that corn prices could significantly rally into the latter part of 2026 if the crop growing in fields has yield perceived to be less than 180 bpa. One may want to be open to re-ownership strategies with call options.
“On the flip side, if weather turns out to be cooperative over the next month for corn, and yield is perceived to be at or larger than 183, then corn prices might trade in more of a sideways fashion for a few months. The good news, market perception is not as bearish as previously anticipated. The bad news, having to be patient and wait on Mother Nature for final yield and production numbers for grains. And don't forget to not only keep an eye on U.S. weather, but global weather as well for major grain-producing regions of the world.” – Naomi Blohm, senior market adviser, Total Farm Marketing
ACTION: If you anticipate a drop in corn yield expectations, consider re-ownership strategies with call options.