Corn, soybeans, and wheat futures opened on Tuesday evening on the defensive, and remain that way for the evening, though the losses were more contained than Monday’s sharp selloff. Market attention centers on the ongoing tariff situation and its implications for global trade. While several agreements appear to be nearing completion, traders are watching for tangible progress with key trade partners, particularly China, the European Union, Japan, and South Korea. Japan and South Korea, two of the largest importers of U.S. corn—accounting for roughly 700 million bushels of demand—are facing a 25% tariff effective August 1. Even if agricultural commodities are ultimately excluded from the tariff list, the situation still weighs negatively on trade relations.

Weather remains another key focus, with no major threats to U.S. crops currently in the forecast. Interestingly, ratings in key Eastern Corn Belt states such as Illinois and Ohio have slipped despite slightly improving the overall national corn condition. Analysts have begun to release early projections for Friday’s WASDE report, some of which are drawing skepticism. As the report approaches, pre-release positioning is likely to become a greater influence on market movement. Once again, managed money flows, updated weather outlooks, and trade headlines will be major drivers in today’s session.

The Brazilian corn market declined yesterday to $4.90, off $0.10 and a new 10-month low, as the safrinha harvest acceleration gets underway and competitive exports start to wind their way into the ports seasonally. Currently, corn supplies and motto Grosso are above the domestic market's needs, so the FOB corn markets thereafter will be watched.

Weather models forecast some better rains in Indiana with heavy rains in the second half of July, favoring the Central Plains, IA, MN, WI, and MO. OH and pockets of the far Western Plains look to be shortchanged moisture-wise into the end of the month. Temps look to be normal for the most part, with the US corn crop nationally seeing silking now at 18% and should be over one third by the weekend.

Live and feeder cattle futures pushed sharply higher on Monday, with live cattle attacking their discounts to the cash trade, which are pretty large for this time of the year, while feeder cattle are eyeballing a crashing corn market and showing gains of $4.00, making new contract highs in the front feeder cattle months. The feeder cattle index picked up $0.21 and is at $312.04. Show lists are smaller for the week, so tight supplies against the seasonally bearish box beef market will be played out into mid-August. Yesterday, though, box beef values had choice gaining $1.23 while select was down $0.91.

Technicals having turned friendly on yesterday’s burst, August live cattle are targeting 18.50, while feeder cattle could rush to the 316-320 pocket.