The grain trade turns lower overnight after mild overnight strength.

Grains are under pressure due to a lack of interest from managed money and the absence of a bullish story. Both US and global corn and wheat crops are experiencing stress, but yield loss is difficult to determine at this stage. For corn, the US can afford to lose some bushels and still meet demand, which is tempering buying interest. The same holds true for wheat, although there are increasing reports of damage from recent storms across the US Plains. The main concern for US wheat currently is the slow harvest and reports of sprouting in saturated fields.

In corn, market attention remains focused on the Eastern Corn Belt, where some planting delays continue. The final plant date for this region has passed, which will impact final acreage. The key question is whether additional acres in the Western Belt will be enough to offset losses in the East. Soybeans are showing a bit more strength this morning, as balance sheets are much tighter compared to corn and wheat.

The US and China are scheduled to hold trade talks in London today, raising market hopes for improved trade relations. The US is also continuing trade negotiations with Japan. Meanwhile, relations with other partners such as the EU remain strained following last week’s US decision to raise steel and aluminum tariffs to 50 percent. Fresh news outside of the geopolitical sphere is limited, and this is weighing on all contracts.

The June WASDE crop report will be released this Thursday and will include a new winter wheat crop survey from the NASS. Current average estimates place the 2025 all wheat crop at 1924 million bushels, up 2 million from May. The 2024/25 corn ending stocks are estimated at 1392 million bushels, down 23 million from May, while soybean stocks are projected at 353 million bushels, up 3 million. For the 2025/26 marketing year, corn ending stocks are expected to show another decline of 11 million, placing them at 1789 million bushels.

This afternoon’s crop progress report is expected to show corn seedings at 96-97 percent complete, with soybean seedings at 92-93 percent. Crop condition ratings for corn, soybeans, and spring wheat are forecasted to improve by 1-2 percent.

This week’s weather forecast shows continued rainfall across most of the Midwest, although Alberta and Saskatchewan are again seeing a reduction in expected rain over the next 10 days. The extended 11-15 day forecast also lacks any widespread precipitation. In contrast, the Midwest is expected to receive intermittent rainfall in the 1-3 inch range over the next 15 days. Temperatures will remain mild with highs in the 80s due to cloud cover and showers. Meanwhile, the Black Sea region is expected to experience heat and dryness, with temperatures in the 90s for a few days before cooling back into the 80s later in the week.

Following last week’s sharp rally in the cash cattle market, which pushed both live cattle and feeder cattle significantly higher, June live cattle ended the week at $226.30 while August feeder cattle closed at $310.10. The cash feeder index surged $7 last week, reaching a record high of $306. After such a strong cash performance driven by tight supplies, attention now turns to packers to see whether they will continue to absorb losses or choose to idle some plants to mitigate those losses.

The cash market has gained $30 over the past eight weeks, while August cattle today are trading $20 below the cash market, creating a challenging environment for hedging. At such steep discounts, the market tends to behave like a bull market climbing a wall of worry. Currently, all short hedges are acting more as a barometer. If the market senses fear, the board breaks; if it gains confidence, it rallies. The discounts in live cattle reflect lingering fear, which must shift to bullish sentiment before a lasting top can be confirmed.