Wheat – Holding Steady Amid Regional Extremes

Wheat futures ended Thursday’s session on a flat note. The CBOT September 2025 contract closed at $5.47 per bushel, unchanged from the previous day. The market showed resilience despite mixed global conditions. While Russia’s Rostov region, the country's leading wheat producer, continues to suffer from a second consecutive year of severe drought, the Stavropol area is reportedly heading toward record yields. In the United States, the USDA is expected to slightly reduce its wheat production forecast in upcoming reports due to lower harvested acreage. Still, strong winter wheat yields in key regions and solid output in Kansas and Oklahoma offer some balance. In Europe, Strategie Grains held its soft wheat estimate steady at 130.7 MMT, reflecting stability despite dry spells across France and the Balkans.

Corn – Volatility Amid Weather Swings and Export Pressure

Corn futures slipped slightly on Thursday. The CBOT September 2025 contract closed at $3.97 per bushel, down 2 ¼ cents. U.S. weather was mixed, with parts of the Northern Plains and Canadian Prairies continuing to experience dryness, while the Central Corn Belt saw beneficial rains. Brazil’s CONAB raised its estimate for the country’s second corn crop, boosting global supply and adding pressure to U.S. prices. Despite a heatwave sweeping across Northeast China, which threatens to reduce yields, solid soil moisture has mitigated immediate concerns. Meanwhile, U.S. ethanol production rose to 1.085 million barrels per day, supporting corn demand slightly, although ethanol stock levels dipped 0.7%.

Soybeans – Downward Trend Persists as Brazilian Supply Overhangs

Soybean futures continued their slide, with the CBOT August 2025 contract closing at $10.05 ½ per bushel, down 3 ½ cents. Brazilian output remains robust even as CONAB slightly trimmed its production forecast to 169.48 MMT. Export activity remains muted, and speculative liquidation continues to dominate the market. U.S. crop conditions are supportive, with good rainfall across the Central Corn Belt, yet bearish sentiment prevails due to increased availability and sluggish demand. Soy oil prices may also face pressure as Malaysian palm oil stocks rose to an 18-month high due to weak exports in June.

Global Market Developments

Russia's wheat landscape remains deeply split. Rostov’s second year of severe drought may slash yields by up to 20%, yet Stavropol is on track for a record harvest. This regional divergence could still preserve Russia's top-exporter status.

Ukraine expects a 5.5% year-on-year rise in its 2025/26 grain and oilseed harvest, reaching 83 MMT. Corn is seen at 29.3 MMT, with exports forecast at 24 MMT. Wheat output is projected to remain stable at 22.5 MMT, signaling sustained Black Sea competition.

In Canada, wheat production is holding steady at 35 MMT despite recent dryness in Manitoba and Saskatchewan. Weather models show favorable rainfall in the next 10 days, keeping yield expectations intact.

China’s wheat production dropped by only 0.1%, but imports declined sharply—down 80% in the first five months of 2025—due to large reserves and stable planting area. Nonetheless, ongoing drought and heat stress are weighing on summer grains, including corn.

The Brazilian safrinha corn crop is progressing well under favorable conditions. With CONAB raising its second crop estimate, Brazil is poised to remain a key competitor in global corn markets.

U.S. regulatory policy continues to evolve. The USDA’s expected limits on foreign farmland ownership—aimed largely at Chinese investors—are adding a layer of uncertainty to rural land markets.

Corn leafhoppers have been confirmed in Kansas’s Reno County for the first time this year. Although not all leafhoppers are harmful, this species transmits corn stunt disease, prompting growers to apply insecticides, which raises costs and complicates operations.

U.S. ethanol demand remains a crucial variable. While production saw a modest uptick this week, overall demand remains sluggish amid soft export figures. Corn prices remain vulnerable to fluctuations in this sector.

In Malaysia, palm oil stocks surged to their highest level in 18 months, driven by a steep drop in exports in June. Although early July exports rebounded 12%, concerns over soy oil prices persist.

Weather forecasts remain mixed. While rain in parts of the U.S. Corn Belt is helpful, dryness in the U.S. Northern Plains and Canadian Prairies could still hinder overall yield potential, especially for spring wheat and barley.

Strategie Grains’ unchanged EU wheat forecast reflects relative optimism, but the report also highlights dry weather risks in parts of Eastern Europe and the Balkans that could intensify in the coming weeks.

Finally, sentiment across all markets remains cautious as traders await next week’s USDA WASDE report, which is expected to revise acreage and production figures. With global uncertainties mounting, volatility is likely to persist into next week’s sessions.