Wheat

The new trading week opened with mixed movements in the futures markets for the major grains. In Chicago on Monday morning, the September 2025 contract for wheat opened at $5.16¾ per bushel, showing slight recovery after last week’s drop of over 21 cents. The wheat complex remains under pressure due to bearish speculative positioning, though tight physical supply in the Black Sea region continues to offer some support. In Kansas City, the HRW contract was down 3½ cents overnight, and MPLS spring wheat continued its weaker trend, reflecting quality concerns.

Corn

Corn futures opened the week at $3.89½ per bushel, slipping 1½ cents from the previous session. Despite strong ethanol use in June—up 0.4% year-on-year—corn is struggling to sustain gains. U.S. crop conditions remain strong, harvest forecasts are robust, and open interest data shows continued bearish sentiment from speculators, with the net short position now exceeding 181,000 contracts. Meanwhile, cash prices in Brazil are falling due to rapid second crop harvesting, even though total harvest progress still lags behind last year.

Soybeans

Soybeans opened at $9.69½ per bushel, with minimal movement early Monday and sentiment remaining weak following last week’s 37-cent drop. Despite record June crush figures in the U.S. and strong demand in Brazil, the absence of Chinese buying for Q4 and high global stockpiles continue to weigh on prices. Soymeal futures were down $1.00, while soyoil edged lower by 0.01, reflecting softening global margins.

Global Market Drivers

Across the global grain market, a host of developments are impacting today's trading session. India’s vegetable oil import dynamics shifted notably in July, with palm oil imports dropping 10% to 858,000 metric tons, while soyoil surged 38% month-on-month to 495,000 tons—reaching a three-year high. This shift was fueled by competitive pricing and delayed shipments from June that finally discharged at congested Indian ports. The trend is expected to continue as refiners stockpile ahead of the festive season, boosting overall edible oil imports by 1.5% to 1.53 million tons in July.

In Argentina, the recently introduced tax cuts are beginning to alter medium and long-term projections. According to the Rosario Board of Trade, if the new tariff regime is sustained through the next decade, Argentina’s crop output could reach 172.3 million metric tons by 2034-35—8% higher than earlier forecasts. Shipments abroad could increase by over 10 million tons under these favorable conditions. The Buenos Aires Grain Exchange projects a 2.3-million-ton increase in soybean production for 2025-26 compared to a previously expected decline, and a revised 1.5-million-ton drop in next season's corn production compared to pre-policy estimates.

Brazilian corn continues to face bearish pressure despite harvesting delays. By early August, just over 74% of the second corn crop had been harvested—well below last year’s 87% at the same time. Prices are under strain from limited export activity and low domestic demand, especially in key producing states like Mato Grosso and Goiás. Some high-productivity areas are pushing supply into the market faster than buyers are willing to respond.

On the soybean front, Brazil saw rising prices amid a combination of firm international demand and currency effects. July exports totaled 10.44 million tons, with a 12.4% higher daily average than the same period last year. This demand surge has driven export premiums to their highest levels in three years, positioning Brazil strongly in global markets—especially as tariffs on U.S. goods increase. Soybean buyers are shifting preferences in favor of Brazilian suppliers.

Malaysia is grappling with a near two-year high in palm oil stocks, projected to hit 2.25 million metric tons in July—a 10.8% rise from June. Production climbed 8% month-on-month, while exports are expected to grow only marginally by 3.2%. Discounted sales from Indonesia in July ahead of their August export tax hike capped Malaysia’s ability to clear stocks. Analysts note that palm oil must now compete aggressively with abundant soybean oil supplies from South America and the Black Sea.

Russian and Ukrainian wheat harvest data revealed further cuts that are shaking the global wheat market. SovEcon lowered its forecast for Russia’s 2025-26 wheat production to 83.3 million tons due to weaker southern yields, though central and Siberian zones performed above expectations. For Ukraine, the Ministry of Economy reported a 39% drop in total grain output so far this season, with wheat production falling to 11.4 million tons from 19.4 million last year. Barley is also down 26% year-on-year. These deficits are contributing to firmer Black Sea spot prices despite pressure on U.S. futures.

Meanwhile, the U.S. USDA Fats & Oils report showed a strong soybean crush performance for June, with 197.1 million bushels processed—up 7.44% from the same month last year and a new record for June. Crude oil production also rose by 7.8% year-on-year, although total oil stocks were 10.8% lower than a year ago, reflecting tight processing margins.

In weather, mixed forecasts continue to influence regional expectations. Heavy rainfall in Canada’s Saskatchewan region is expected to benefit wheat yield formation. In Brazil, dry weather in key second corn areas will assist in speeding up harvesting after delays. Europe is facing an expanding heatwave in the southwest, particularly affecting Spain, while northern China is benefiting from rainfall that helps alleviate drought in the North China Plain. Tropical activity in the Atlantic is increasing, adding a note of risk for logistics in coming weeks.

Together, these headlines point to a global grain market still navigating tight wheat supplies, volatile oilseed dynamics, and deeply strategic shifts in trade flows—from South American tax regimes to Indian import patterns and Chinese procurement hesitations. As traders recalibrate their strategies in response, pricing may remain volatile in the sessions ahead.