The grains are fighting between war or weather on pricing.
Grain Overview
Grain futures initially turned higher on the evening opening, as crude oil pushed higher after Iran launched missiles at US assets, which oil intercepted. The point is,any talks going on in the background are essentially fruitless babble. Yet overnight weakness in row crops gave way as the weather modeling continues a good chance some of the dry areas of the Western Corn Belt will get a good drink on Friday. Wheat, though volatile overnight, maintains a firm tone, as the Black Sea region is seeing minimal movement of the upcoming Black Sea wheat harvest.
Crop concerns remain elevated as corn and soybean condition ratings continue to trail last year’s levels. While weekly ratings do not directly determine final yields, they do suggest the crop has less potential to achieve exceptional production. The market’s focus is shifting from whether the crop is large to whether it will be large enough to avoid further demand rationing through higher prices. This weekend’s rain event for the Western Corn Belt has to perform, as warm temperatures next week will bring renewed buying after this end-of-month liquidation departs.
Early reports from the US small grain harvest indicate yields have generally held up, but test weights have been disappointing. Traders are beginning to question whether this year’s corn crop could experience a similar outcome following the recent stretch of intense heat. Crop stress also continues to build across the European Union, helping sustain demand for Ukrainian grain exports despite the ongoing logistical challenges in the Black Sea.
The last days of July are always seasonally negative, as the market looks for any opportunity to apply selling pressure. Grain bins are getting swept out, and it is part of the hedge-to-arrive pricing and decision-making process that the market likes to wash out whenever it can find a favorable forecast. A sharp rally in crude oil this morning seems to be having little effect on corn and soybeans, with soybean oil showing only moderate gains after overnight strength.
Soybeans want to fill the gap and possibly trade back into the $11.80-11.90 range to create selling fear that farmers have missed their opportunity to sell beans above $12.00. Corn also wants to give the appearance that the 480 price range is as good as it gets, encouraging farmers to let more grain go before the end of the month. We anticipate buying interest returning by Friday or early next week, similar to the enthusiasm shown at the beginning of the month.
Cattle Overview
After being extremely oversold over the last few weeks, value was found during Monday’s sharp losses, setting up a short-covering rally that kicked in on Tuesday. October live cattle, the spot continuation contract, continue to show support in the 217-219 range, offering stability. Meanwhile, spot feeder cattle contracts have shown that 330-334 is also a support zone that wants to develop in the near term, while deferred contracts continue to seek support in the 300-310 range.
There has been heat-related death loss across the Western Corn Belt states from these exceptionally heavy animals. They do not perform well unless provided some form of relief, such as shade or water sprinklers. If this death loss is occurring across a large number of feedlots, it will become a significant concern, and we could see boxed beef values rebound quickly over the next two weeks. Yesterday afternoon, boxed beef values showed Choice jumping $3.00 to $365.90, while Select slipped $1.60. Some cash trade was also reported yesterday, but it came in $2.00-3.00 lower than last week’s activity. Packers are looking to take advantage of the recently soured market sentiment, but stability in board prices could improve the outlook.
October live cattle maintain a strong support zone at 217-219 (50% correction of last fall’s low scored against the May high), with recoveries likely finding resistance in the 225-226 range. September feeder cattle have anchored support near the 62% retracement of the move from the November 2025 low to the spring high. A close below 329 would open the door to a deeper break, although the June low was violated for only one session before recovering. Deferred feeder cattle continue to find support in the 300-310 range we have discussed for some time on the continuation charts.
Our explanation for the sharp losses that developed in early July was that the market had gotten wind that the US border would reopen to Mexican feeder cattle. Again, the initial August reopening is fully contingent upon Mexico following strict New World screwworm (NWS) protocols on its side of the border. Once the process begins, it will move slowly until those procedures prove effective, as every animal will be unloaded, inspected, and reloaded before crossing. Only then will additional reopening dates be considered.