Wheat

Chicago’s July 2025 wheat contract closed Tuesday at $5.19¼ per bushel, reflecting a loss of 18½ cents. The market faced continued pressure from poor U.S. harvest progress and weakening crop health. The USDA reported that only 19% of the winter wheat crop has been harvested—well behind the 28% average. Condition ratings also dropped to 49% good/excellent, with Kansas and Oklahoma showing pronounced stress. Spring wheat also struggled, with ratings declining 3%, driven by harsh conditions in Minnesota and South Dakota. Traders trimmed short positions slightly, but the EU’s ongoing drop in soft wheat exports—down significantly from last year—added to the bearish tone.

Corn

Corn prices continued their downward trajectory as the July 2025 contract closed at $4.12¼ per bushel, down 6 cents. Even after a large U.S. corn sale to Mexico totaling 630,000 MT, weak crop conditions and macroeconomic pressures weighed heavily. The USDA reported 97% emergence and early silking, but crop condition fell to 70% good/excellent. Notable drops were seen in Texas and Colorado. Managed money increased short positions to nearly 185,000 contracts. Brazil’s revised June corn export forecast further dampened optimism, with ANEC cutting expected volumes—a signal of global demand softness.

Soybeans

Soybeans were also weaker, with the July 2025 contract settling at $10.35¼ per bushel, down 14¼ cents. Even with steady U.S. crop ratings at 66% good/excellent, the market had anticipated improvement. States such as Nebraska and North Dakota reported significant quality declines. While planting is nearly finished, blooming remains slow. Speculators grew their long positions last week, but Brazil’s improved export projection of 14.99 MMT for June (up from 14.36 MMT) introduced bearish undertones. Soymeal and soyoil posted midday losses, tracking broader commodity weakness.

Key Global Developments Impacting the Grain Market

Tensions in the Middle East are disrupting fertilizer logistics. Urea production in Egypt and Iran has halted, impacting supply chains. In Brazil, prices for urea are up 25% compared to last year, raising concerns about affordability ahead of the 2025/26 planting cycle.

Shipping costs through the Hormuz Strait have surged. Charter rates have doubled and freight costs are up 30% over the last ten days. The market fears this could become a wider supply chain crisis if the geopolitical situation escalates.

July weather forecasts for North America predict dry heat, potentially stressing corn and soybean crops further. Meanwhile, a cold front threatens southern Brazil’s corn in Paraná and nearby areas. While coffee crops appear safe, frost risk persists.

Heavy rainfall in southern and central China is causing flooding, particularly in the North China Plain. The floods may disrupt grain output and supply logistics in these key production regions.

The EU crop monitor MARS revised soft wheat yield expectations slightly upward due to better performance in southern Europe, but also issued a warning. Drought stress is growing in France and the Benelux region, where critical grain-filling phases are underway.

Ukraine’s wheat harvest is expected to fall by 3% to 21.74 million tons. Export potential has dropped to 15 million tons due to tightening EU quotas and stronger Russian competition in key regions like Asia and Turkey.

USDA’s weekly inspections revealed mixed trends. Corn exports were stronger year-over-year at 1.477 million tons. Soybean and wheat inspections declined. Mexico and Germany were top buyers of U.S. corn and soybeans, respectively.

Indonesian palm oil exports dropped sharply to 1.78 million tons in April from 2.88 million the month before. Domestic consumption and biodiesel usage were also lower. Stocks rose to 3.05 million tons.

In Brazil, mills are favoring imported Argentine wheat due to better pricing compared to domestic offers. However, wheat prices across the country remained relatively stable despite regional variations.

Louis Dreyfus announced plans to reactivate a long-idle grain terminal in Indiana by 2026. Although small in volume, the move enhances U.S. grain export capacity via the Great Lakes and diversifies routing.

India’s monsoon arrived slightly early and is now 2% above normal in total rainfall. The northwest is much wetter than average, while eastern regions are still behind — a disparity that could affect grain output.

The U.S. egg industry reported a 5.6% production decline in May, with table egg output dropping by 6.4%. Though not directly grain-related, this could indicate reduced demand for corn and soymeal-based feed.

Overall, the market remains under pressure due to macro uncertainty, deteriorating weather outlooks, logistical bottlenecks, and weaker crop condition ratings. Traders are closely watching developments in Brazil, Ukraine, and U.S. weather patterns for direction.