Late July is living up to its reputation: HOT weather, plenty of market chatter, and enough uncertainty to keep everyone checking forecasts and futures prices before breakfast. After enjoying a weather-driven rally earlier this month, grain markets took a step back this week as traders shifted their attention from crop concerns to geopolitics and outside markets. Headlines out of the Middle East dominated much of Monday’s trade, with talk of a pause in U.S. military action toward Iran and renewed diplomatic efforts sending crude oil prices sharply lower. As energy markets cooled off, grains followed suit. We’re not really trading corn, we’re just trading crude, since that is dictating everything lately.
Corn has been the center of attention lately, and for good reason. While much of the Corn Belt continues to look respectable, the western edge is beginning to show signs of stress. Areas of Minnesota, South Dakota, western Iowa, and parts of Nebraska have missed recent rains, and producers are becoming increasingly nervous as pollination wraps up and kernel set begins. Fortunately, much of the crop appears to have pollinated under favorable conditions, and widespread yield losses have yet to materialize. Still, another week or two without meaningful rainfall could change the conversation in a hurry.
The market has noticed. Analysts expected USDA’s latest Crop Progress report to show corn rated 65% good-to-excellent, down from 67% a week earlier. Yet despite the weather concerns, corn futures spent much of Monday retreating as traders focused on easing geopolitical tensions and technical chart support. Export demand remains a bright spot, however. USDA export inspections continue to run well ahead of the pace needed to meet current projections, suggesting demand remains stronger than many expected heading into the final month of the marketing year.
Soybeans had perhaps the roughest session of the week, with futures tumbling alongside the energy complex. That move seemed a bit puzzling considering China continues to show up as a buyer. New sales announced this week included 132,000 metric tons of soybeans sold to China for the 2026-27 marketing year, adding to an already sizable book of business. Add in the nation’s expanding biofuel demand, and the fundamentals don’t necessarily scream bearish.
That said, the trade appears increasingly confident that the U.S. will produce another large soybean crop. New crop spreads weakened this week, signaling expectations for ample supplies. Much like corn, soybean conditions are expected to slip slightly, with USDA ratings projected at 65% good-to-excellent. The next several weeks will be critical as August weather takes center stage; August is the month that often makes or breaks soybean yields, and if it stays anything like this last week of July with the heaters cranked on full blast, it could get spicy.
Kansas City wheat continues to be the market’s wild card. Harvest is largely winding down across the Plains, but global issues remain supportive beneath the surface. Russian export facilities continue to experience congestion, and ongoing tensions in the Black Sea region continue to keep traders on edge. Meanwhile, spring wheat conditions are slipping, with ratings expected to fall to 51% good-to-excellent.
As we head toward August, the market’s attention will increasingly shift to weather forecasts and USDA’s August 12 WASDE report, which is the first report to incorporate farmer yield surveys and satellite data. Until then, expect volatility to remain the name of the game.
