The U.S. grain markets opened Tuesday with varied movements as futures contracts responded to crop condition updates, evolving weather forecasts, and fluctuating export dynamics.

At the opening bell in Chicago, July 2025 wheat traded at $5.39 per bushel, edging up slightly by ¾ of a cent. Wheat prices weakened overnight after holding gains on Monday, as improved crop condition ratings weighed on sentiment. The USDA reported that 83% of the winter wheat crop is now headed and 3% harvested, aligning with the seasonal pace. Crop condition ratings improved to 52% good to excellent, while spring wheat reached 95% planted, with emergence and quality also above the five-year average. Despite recent Black Sea tensions and strong U.S. export activity—especially to South Korea, the Philippines, and Indonesia—global expectations of higher production in Australia and a moderate Ukrainian outlook kept futures constrained.

Corn opened the day at $4.38¼ per bushel, up 1½ cents in early trade after closing the previous session down by 5¾ cents. Monday’s losses were driven by bearish spread pressure and a large drop in open interest. However, signs of ongoing demand strength helped stabilize prices. U.S. corn is now 93% planted with 78% emergence, while 69% of the crop is rated good to excellent. April ethanol usage reached 425.8 million bushels, marking a six-year April high. Export inspections were strong, with over 1.5 million metric tons shipped last week, mainly to Mexico, Japan, and South Korea. Still, expectations for reduced Ukrainian output (down to 26 MMT from USDA’s 30.5 MMT) support market resilience.

Soybeans began Tuesday's session at $10.33½ per bushel, showing signs of modest recovery, up 5 cents after dropping by 8¼ cents the day before. Futures had struggled on Monday due to weak soymeal and soyoil performance and a favorable planting outlook. The soybean crop is now 84% planted and 63% emerged—both ahead of average—while 67% is rated in good to excellent condition. The USDA's fats and oils report showed 202.4 million bushels crushed in April, exceeding expectations and up nearly 14% year-on-year. Despite lower weekly inspections than a year ago, U.S. soybean exports are still up 10.7% for the marketing year. China, Bangladesh, and Mexico led recent buying activity.

In international developments, Vietnam is emerging as a key U.S. grain buyer, signing MOUs to purchase 900,000 tons of corn and 250,000 tons of DDGS. These moves reflect Washington's growing trade engagement in Asia outside of China and signal rising demand from the world’s third-largest corn importer. Vietnam’s intent to remove tariffs on U.S. goods could further reinforce U.S. competitiveness in the region.

Brazil’s grain outlook was updated significantly. AgRural raised its 2024/25 corn forecast to 128.5 million tons, citing improved winter crop yields. StoneX revised the total corn crop estimate up to 134 million tons and the second-crop corn output to 106.1 million tons. For soybeans, estimates rose to 168.25–169 million tons across agencies. Harvest progress and favorable weather continue to shape Brazil’s expanding role in global grain supply chains.

In Australia, dry conditions are expected to cut 2025/26 wheat production by 10% to 30.6 million tons, according to ABARES. Although the figure remains above the 10-year average, rainfall is urgently needed to support yield projections, especially in key producing areas like southern New South Wales and Western Australia. Barley and canola production are also expected to fall by 3% and 6%, respectively.

Egypt, one of the world’s largest wheat importers, has taken a rare step by directly purchasing French wheat through its newly established buyer, Mostakbal Misr. The deal, amounting to 180,000 metric tons, may signal growing confidence in the agency despite early logistical hurdles. Traders remain cautious due to payment delays and a lack of transparency, though the move could mark a strategic shift away from traditional tender systems under GASC.

Morocco’s wheat imports rose by 9.4% to 6.05 million tons over the past year. France and Russia led soft wheat shipments, while Canada dominated durum exports. Corn imports also climbed, with Brazil and Argentina supplying most of the volume. The growth reflects continued concerns about domestic yield limitations and reliance on diversified sourcing.

Kazakhstan reported that 81% of its sowing campaign is complete, covering 19.1 million hectares, with over 14 million dedicated to grain crops. The total cultivated area rose by more than 400,000 hectares compared to last year, highlighting Central Asia’s steady agricultural expansion.

Palm oil markets showed strength as Malaysia’s May exports rose 13.2% to 1.231 million tons, according to AmSpec Agri. Meanwhile, futures in Kuala Lumpur climbed 1.39% overnight. A continued rebound in demand from key Asian importers is helping stabilize the broader vegetable oil complex.

The U.S. continues to show solid demand for corn and soybeans. Weekly export inspections recorded 1.576 million tons of corn and 268,000 tons of soybeans shipped, with China receiving 65,000 tons of the soybean total. South Korea led in wheat purchases, reflecting regional diversification in sourcing strategies.

In a positive turn for animal protein exports, Brazil has ruled out bird flu on a commercial farm in Rio Grande do Sul after lab tests came back negative. This reassures global markets about biosecurity in the world’s largest chicken meat exporter and may ease restrictions from key buyers like China and the EU that had suspended imports following an earlier outbreak.

Finally, wheat markets remain sensitive to both supply and demand dynamics. U.S. crop condition ratings and increased Black Sea tensions are underpinning prices, while expected declines in Australian and Ukrainian production add further complexity. At the same time, sluggish liquidity in Brazil’s spot wheat market has pressured domestic prices, though planting progress and favorable expectations continue to support a potentially record harvest.

As trading continues this week, participants will keep a close eye on updated weather models, final planting progress, and export trends, particularly as the Northern Hemisphere enters critical stages of crop development.