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Prices updated as of 6:55 a.m. CDT.
What we’re watching
Federal Reserve Chair Kevin Warsh is making the rounds on Capitol Hill this week. Though his personal policy is to avoid signaling Fed decisions ahead of Federal Open Market Committee meetings, traders will be hanging on his every word as he testifies before the House Financial Services Committee this morning and then moves over to the Senate Banking Committee on Wednesday. This is Warsh’s first monetary policy report to Congress since moving into the leadership role on May 22.
Corn continues to fall on pre-report trading
December corn futures opened down 4.62 and quickly fell to $4.57.
Where will corn go from here? With crude oil rising on the battles battering the critical supply line through the Strait of Hormuz and tensions stringing ever tighter across the Middle East, the correlation between corn and crude offers price hope. But waning concerns about heat and dry weather on the U.S. crop are testing that link.
Through summer is the most difficult time to forecast, well-respected ag weather guru Eric Snodgrass sees a lot of variables as the central corn production area hits the threshold for stress degree days that dip into yield opportunity.
“The stress degrees can be really only problematic if you don’t have the moisture,” Snodgrass says. “If you’ve got moisture and there’s moisture in the soil then okay, we can take on some heat. The crop can use the water.”
Snodgrass looks at possibility of flash drought, scattered thunderstorms and the length of this current heat wave. “As we take it all out to the 23rd to the 27th, models are really not aggressive on keeping this heat around,” Snodgrass says. “And that’s what I’m trying to figure out: if this is right or if this is wrong.”
Ultimately, Snodgrass for now sees that crop stress easing in the last 7 days or so of July.
Can you catch this falling bean rally?
November soybeans continued to flirt with that $12 resistance level, giving up nearly a dime between Monday’s close and Tuesday’s open, falling to 11.91.
The question for farmers is what price turns a profit for their farm? The only way to know is to erase a few numbers on production costs, pencil in actuals from planting and new estimates going into harvest and figure in any sales to date. AgMarket.Net’s Ethan Robson suggests now is a good production season lull for working those breakeven numbers and perhaps making some sales.
“At the time of writing this,” Robson notes on FarmFutures.com, “November soybeans not only approached but touched the $12 futures level, and China has started buying U.S. soybeans for the new crop marketing year (which has helped support the move). 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?”
The trade thinks it might be – or at least time to put in a strike price with a broker who will be busy if prices again top $12. Farm Futures Senior Editor Bruce Blythe says the bean market either needs drought or more China purchases. And China appears to be coming to the table. And soy oil futures continue to offer a bright spot. The tempering force is strong U.S. production coupled with expectations for production in Brazil.
After reading USDA’s crop progress reports Monday, here’s what John Zanker, of Farmer’s Keeper, is thinking about beans this morning: “The national good-to-excellent rating improved a point to 65%, which is strong enough at this point on the calendar to keep chatter of a record yield in play. Soy oil futures are in the black this morning and that could eventually lead soybeans into positive territory when the day session unfolds.”
As they say, hold and hope isn’t a strategy. It’s time to refigure those breakevens. Robson asks: “If you’re being honest, do you wish you’d gotten more aggressive earlier in the year?”
Now could be your second – possibly last – chance to make some sales near a 2026 top.
Could wheat prices rise?
Chicago Soft Red Winter Wheat futures joined the fall across the commodity board, with September SRW dropping a solid nickel to open at $6.30.
For those scratching their heads over falling wheat prices despite strong U.S. fundamentals, a shift still is possible. Opportunity for wheat prices to rise largely hinges on weather in the European Union, where heat and drought are taking a toll on yield and quality, particularly in the EU’s largest producer, France. The counterweights pulling on the futures market for wheat are: changes in American dietary habits, also known as disappearing bread baskets; profit taking; and global fundamentals that show strong supply despite geopolitical upheaval in strong wheat production areas.
Reports across the financial universe, including today’s inflation index, can impact ag commodities futures in ways that sometimes surprise farmers and occasionally catch the trade off guard. The question as we start looking toward those harvest lows is whether global impacts will boost or tank U.S. grain prices.
To University of Minnesota ag economist Ed Usset’s experienced eye, this month offers opportunities that may be gone when the calendar page flips. With rally potential highly uncertain, Usset suggests farmers sell any remaining 2025 crop now and forward-price a portion of 2026 corn and soybeans.
In other words, don’t bet the bin on drought and China.