CORN HIGHLIGHTS:

• Corn futures posted another strong session, with September futures decisively breaking above structural resistance near $4.55, while December futures continued to build on this week’s breakout above $4.70. September corn closed 9-1/4 cents higher at $4.62, and December futures gained 9-1/2 cents to $4.84-3/4. Also of note, the March contract climbed back above the $5.00 mark, closing at $5.00-1/4.
• Cooler temperatures across the Corn Belt, generally 75°F–85°F, should reduce crop stress during a key development period. However, hotter weather is expected to return, keeping traders focused on next week’s USDA Crop Progress report for signs of declining crop conditions.
• While the recent cooldown has eased immediate crop stress, forecasts still call for hotter temperatures to return. As a result, traders will be watching next week’s USDA Crop Progress report closely to see whether the heat results in a decline in crop-condition ratings.
• EIA data showed ethanol production rebounded to 322 million gallons last week, up from 306 million the previous week and 1.5% above the same week last year. Production came in at the high end of trade expectations.
• Despite the rebound, corn demand from ethanol remained below USDA’s pace. Corn use totaled 107 million bushels, or 15.34 million bushels per day, marking the 14th consecutive week below the 15.6 million bushels per day needed to reach USDA’s corn-for-ethanol forecast. Ethanol stocks increased to 24.5 million barrels, slightly above 24.4 million a year ago.

SOYBEAN HIGHLIGHTS:

• Soybeans ended the day significantly higher and closed near their high of the day. November soybeans came within ¼ cent of their all-time contract high from 2022. August soybeans gained 13-1/2 cents to $12.33 while November gained 16-1/4 cents to $12.39. August soybean meal gained $4.90 to $331.60 and August soybean oil gained 1.18 cents to 75.48 cents thanks to gains in crude oil.
• Crude oil has jumped by over $15 a barrel so far this month as a result of escalations and end of the ceasefire with Iran. This has caused soybean oil to increase by 8.55 cents so far this month. The gains in crude have bled over to boost other grains as well, and it does not appear that a peace agreement is near.
• The 6–10 day forecast calls for above-normal temperatures and below-normal precipitation across the Corn Belt. Concerns that the dryness could persist into August are increasing, particularly if paired with continued heat during critical crop development.
• Since July 4 when China began purchasing new crop US soybeans in earnest, prices have rallied by 75 cents. Concerns over hot and dry weather and strong domestic crush demand have been supportive as well.

WHEAT HIGHLIGHTS:

• Wheat closed sharply higher across the board as war premium continues to be factored in, and the Wheat Quality Council’s HRS tour is finding lower yields. In the September contract, Chicago gained 27-3/4 cents to 705-3/4, Kansas City rallied 30-1/2 cents to 763-1/2, and MIAX climbed 24-3/4 cents to 7.29.
• MATIF wheat was also up significantly today, with front month September up 9.50 Euros/mt at 244.25. That is roughly the equivalent of 29 cents/bu when accounting for current exchange rates.
• Day 1 of the spring wheat tour in North Dakota found an average yield of 46 bpa, as scouts noted fields varied from average to good with mostly dry conditions. This falls below the 50 bpa found a year ago. This is also under the USDA’s average yield estimate of 58 bpa, which itself would only be 1 bpa below the record from 2024.
• Much of Australia is expected to be dry into early August. This will be unfavorable for the wheat crop as drought increases. And with the El Nino weather pattern building, there are concerns that this could worsen over time.
• Over the next 15 days, rainfall in the Argentine Pampas region is expected to be below normal. However, during the second week of the forecast temperatures are also expected to be 5-9 degrees Celsius above normal – this should aid wheat development.
• Jordan is believed to have made no purchases in their tender for 120,000 mt of milling wheat. It is reported that a new tender was issued for the same amount, with this one closing on August 4. In related news, Tunisia is said to have purchased 100,000 mt of soft wheat in their tender yesterday.

DAIRY HIGHLIGHTS:

• The block/barrel average cheese price added another half-cent, closing at $1.64875/lb and marking another new yearly high.
• Class III milk continued to follow the strength in the cheese market, with the August contract gaining 35 cents to close at $17.93.
• Spot whey gained 0.25 cents to close at $0.700/lb.
• Class IV milk remained under pressure from the declining powder market, with the August contract losing 14 cents to settle at $16.80.
• Spot butter fell 3.50 cents to close at $1.5400/lb, while spot powder declined 2 cents to finish at $1.4100/lb.

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Author

John Heinberg