Grain markets displayed resilience, with corn, soybeans, and wheat bouncing off recent lows, driven by robust export demand and technical buying. Corn prices rose modestly, supported by strong new crop sales, while soybeans gained on better-than-expected export data. Wheat prices climbed due to short covering and anticipation of the upcoming USDA report, despite rising global supplies.
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In this edition:
Harvest Headlines: Events impacting crop prices.
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Market Overview
Harvest Headlines
Corn Price Events
Strong Export Sales Bolster Prices: Corn export sales for the week ending July 31 reached 131.2 million bushels, exceeding trade expectations, with new crop sales of 124.5 million bushels led by buyers like Mexico and South Korea. This robust demand, coupled with private sales announcements of 4.2 million bushels to Mexico and 4.1 million to Guatemala, provided a supportive backdrop for prices.
Technical Buying Supports Rebound: Corn futures saw follow-through buying after rebounding from contract lows, with December corn closing near $4.03. The market’s oversold condition prompted technical buying, though bearish Midwest weather forecasts limited rally potential.
Brazilian Corn Exports Decline: Brazil’s July corn exports dropped 31.5% year-over-year to 96.78 million bushels, attributed to rising domestic demand and reduced purchases from China. This reduction could shift global demand toward U.S. corn, supporting prices.
USDA Report Anticipation: Traders are eyeing the USDA’s August 12 report, with expectations of a 2025 U.S. corn crop estimate increase to 15.976 billion bushels from 15.705 billion. A larger crop and potential carryout increase to 1.902 billion bushels could pressure prices if realized.
Ethanol Production Trends: Weekly U.S. ethanol production rose 1.3% compared to last year, but stocks remained unchanged year-over-year. Some analysts suggest the USDA may lower its annual corn-for-ethanol estimate by 25 million bushels, potentially impacting demand.
Favorable Midwest Weather: Bearish weather forecasts for the Midwest, with above-normal temperatures and strong rain prospects, particularly in Iowa, suggest optimal crop conditions. This could cap price gains by supporting expectations of a record U.S. corn crop.
Soybean Price Events
Export Sales Exceed Expectations: Soybean exports reached 37.2 million bushels in combined old and new crop sales last week, surpassing analyst estimates of 11.0 to 29.4 million bushels. This strong demand, despite China’s absence from recent sales, fueled a 9.25-cent gain in November futures to $9.9375.
Argentina’s Tax Cut Impact: Argentina reduced export taxes on soymeal and soybean oil to 24.5% from 31% and raw soybeans to 26% from 33%, narrowing the tax differential. This could enhance Brazil’s soymeal competitiveness, potentially pressuring U.S. soybean prices in shared export markets.
Technical Buying Drives Gains: Soybean prices rose due to technical buying and spillover strength from other grains, with September futures up 8.5 cents to $9.74. The market’s volatility, fluctuating around the 100-day moving average, reflects trader positioning ahead of the USDA report.
Bunge’s Acquisition Move: Bunge Global SA’s agreement to acquire a soy-crushing business from International Flavors & Fragrances Inc. signals continued investment in soy processing. This could support long-term soybean demand, though immediate price impacts remain limited.
Brazil’s Record Soy Exports: Brazil’s soybean exports hit record levels in July, though specific volumes were not detailed. Increased global supply from Brazil may challenge U.S. soybean competitiveness, potentially capping price upside.
USDA Report Expectations: The upcoming USDA report is expected to raise the 2025 U.S. soybean crop estimate to 4.365 billion bushels from 4.335 billion, with carryout at 439 million bushels. Larger supply projections could weigh on prices despite strong export demand.
Wheat Price Events
Short Covering Lifts Prices: Wheat prices rose, with December Chicago wheat near $5.33, driven by short covering ahead of the USDA’s August 12 report. The market’s oversold condition and talk of lower Black Sea export supplies contributed to the uptick.
Strong U.S. Export Sales: Weekly wheat export sales reached 27.1 million bushels, exceeding analyst expectations of 12.9 to 22.0 million bushels, with Nigeria and Bangladesh as top buyers. Cumulative 2025/26 sales of 143.1 million bushels are moderately higher year-over-year, supporting prices.
South Korea’s Purchase: South Korea bought 24.5 million bushels of U.S. feed wheat for November delivery, reinforcing demand strength. As a top-five destination for U.S. wheat, this purchase bolsters market sentiment.
Global Supply Dynamics: Rising world wheat supplies due to increased production in the U.S., Europe, Russia, and Ukraine are pressuring prices. However, strong global demand at lower price levels is providing some price support.
Canadian Prairies Rainfall: Scattered rainfall in the Canadian Prairies offers some relief for wheat crops, but it may be insufficient for some areas, potentially impacting yields. This could indirectly support U.S. wheat prices if global supply tightens.
Extended Commentary
Corn and soybean markets extended their decline on August 7, as traders positioned ahead of the USDA’s anticipated yield hike in the August 12 report, which is expected to confirm robust U.S. production. December corn futures dipped near the psychological $4.00 level, pressured by favorable crop conditions and expectations of increased farmer selling. Brazil’s ongoing second crop harvest and record export pace further intensified global supply pressures, while ethanol production and export trends remained steady but unimpressive, limiting domestic demand support. Weather forecasts of below-normal rainfall in the Corn Belt provided some speculative risk, but overall market sentiment remains bearish, with global oversupply capping any price rebound.
Soybean futures also struggled under the weight of ample global supplies and strained U.S.-China trade relations, which are casting a shadow over future export prospects. Brazil's record-breaking export volumes and Argentina's new meal shipments to China have intensified competition, limiting U.S. market share. While soybean meal deliveries showed active participation, and Brazilian crushers are facing operational challenges, these factors offered only limited support amid the broader bearish landscape. Wheat, however, managed a modest technical bounce from oversold conditions, with Chicago SRW and Kansas City HRW futures edging slightly higher on bargain buying. Yet, rising global supply forecasts, soft export demand signals, and persistent technical weakness continue to suppress any meaningful rally potential for wheat prices.
