CROP FOCUS: JULY 25 CHICAGO OPENING PRICES

Wheat futures opened Monday at $5.21¾ per bushel, continuing to slide amid weak export activity and bearish sentiment. Despite a moderate reduction in net short positions by speculators, the Chicago wheat market failed to find support from broader commodity strength. Friday's losses of 7½ cents extended weekly declines, as SRW contracts dropped over 21 cents during the week. Traders now await the USDA Crop Production and WASDE reports for updates on winter wheat yields, expected at 1.325 billion bushels, and insights into both old and new crop stock positions.

Corn began Monday’s session with modest gains, opening at $4.49¾ per bushel, following Friday’s 2¼ cent increase. The market had faced pressure throughout the week, with the July contract down 19¼ cents overall. However, strong export sales and renewed optimism ahead of USDA’s balance sheet projections supported prices. Analysts expect a record U.S. corn production forecast of 15.787 billion bushels and a slight cut in old crop carryout. Global traders are also eyeing Brazil’s anticipated upward revision to 126.96 million tons, and Argentina’s expected dip to 49.75 million tons.

Soybeans surged into Monday’s open at $10.51¾ per bushel, gaining 17¼ cents following a 6¾ cent Friday rise. Momentum was fueled by strong export sales to Mexico and Pakistan, a rally in soyoil futures, and optimism around the U.S.–China trade agreement. Despite China’s decade-low April soybean imports, traders saw the announcement of reduced tariffs as a bullish turning point. The USDA is expected to project U.S. production at 4.338 billion bushels with a stable world carryout of 122.5 million tons, shifting attention to the new crop estimate of 126.02 million tons.

KEY GLOBAL DRIVERS

A significant breakthrough was reached over the weekend between the United States and China, resulting in a temporary de-escalation of the ongoing trade war. Reciprocal tariffs were slashed, with China reducing duties on U.S. goods to 10% and the U.S. lowering tariffs on Chinese products to 30%. The move, following high-level negotiations in Geneva, lifted market confidence and supported risk sentiment globally. The easing of trade barriers is expected to stimulate renewed interest in U.S. grain exports, particularly in soybeans and wheat.

Chinese wheat import activity picked up sharply amid heatwave concerns across major producing regions. Henan province, which grows about one-third of China’s wheat, issued warnings over hot and dry conditions. In response, China secured 400,000 to 500,000 metric tons of wheat from Australia and Canada—marking the first Australian shipments since last year. These developments coincided with the return of Chinese demand, driven by weather anxiety and opportunistic buying at current price levels.

In Brazil, the government confirmed ongoing discussions with China to build a transcontinental railway connecting the Chancay port in Peru to Brazil’s interior. This infrastructure project, intended to shorten shipping routes to China by over 6,000 miles, could transform regional grain logistics and enhance Brazil’s competitiveness in the global market. The route would bypass the Amazon and pass through Tocantins and Bahia, linking to Brazil’s under-construction FIOL railway corridor.

Brazil’s 2024/25 soybean export outlook remains strong despite earlier logistical setbacks. Shipments to China dropped 37% year-on-year between September and January due to depleted stocks, but improved production in 2025 is expected to restore volumes. Harvest estimates now stand at 169 million tons, and exports could reach a record 108.3 million tons. Analysts project 57% of the crop has already been marketed as of early May.

In contrast, corn prices in Brazil continue to soften. While production and exports have improved, domestic prices fell sharply in early May due to weakening dollar values and global pressure. Corn purchasers are reportedly staying away from contracts, anticipating further devaluations as the second crop develops under favorable weather. April’s corn exports reached 178,000 tons—170% higher than a year ago—but the outlook remains cautious.

Argentina’s weather has provided mixed results. Dry conditions supported soybean and corn harvesting over the weekend, while some rainfall improved soil moisture for winter wheat planting. The Buenos Aires Grain Exchange increased its soybean output estimate to 50 million tons. However, future precipitation patterns remain crucial for securing yields in both current and upcoming crops.

Ukraine’s spring grain sowing remained in line with last year, covering 4.32 million hectares or 76% of planned area. Despite steady progress, analysts at APK-Inform downgraded the 2025 harvest forecast by 3.8% due to lower expected corn yields. Corn production is now estimated at 27 million tons, while total grain exports for 2025/26 were revised down to 40.9 million tons.

In India, the weather outlook brightened with the monsoon season projected to begin on May 27—five days earlier than average. The early arrival of rains could boost the planting of corn, soybeans, rice, and other summer crops. With half of India’s farmland relying solely on monsoon rains, the announcement eased food supply concerns, particularly given geopolitical tensions in the region.

Weather in the U.S. also presented a mixed picture. Northern Plains benefited from warm and dry conditions suitable for fieldwork, but a midweek storm could bring heavy rainfall. Central and Southern Plains saw contrasting temperatures and patchy rainfall, while the Midwest experienced warming and upcoming storms. The Lower Mississippi Valley remained waterlogged, and Canada’s Prairies faced scattered showers and cooler temperatures. These mixed conditions continue to influence planting progress and yield potential.

European grain regions enjoyed widespread rainfall across Spain, France, and Poland, supporting crop development. However, Germany trended drier and could face moisture stress if conditions persist. In the Black Sea region, recurring showers improved moisture availability, although cold air brought risks of localized frost.

Finally, U.S. commitment of traders data revealed ongoing repositioning. Speculative net short positions in Chicago wheat were reduced by 7,681 contracts, while net longs in corn were cut to just 13,893 contracts—the lowest since November. Soybean net longs also declined, but positive sentiment surrounding the China deal and improved export performance helped stabilize the complex heading into the week.