Grain Markets and Other Stuff
Joe Vaclavik and Mackenzie Johnston discuss the grain markets, the business of farming, news related to agriculture, and a variety of other topics.
Grain Markets and Other Stuff
Corn Prices Hit 9-Month Low - Largest US Corn Stocks Since 1988 Expected
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🌽 Corn & Soybean Selloff
Corn futures tumbled Monday, with the Dec26 contract falling nearly 12 cents to close at $4.30/bushel as traders positioned ahead of today's USDA report. 📉 Soybeans dropped even harder, with Nov26 losing about 17 cents to settle at $11.39/bushel, while wheat also closed lower.
🌡️ Heat Building Across the Belt
Oppressive heat and humidity will grip the Plains and Corn Belt through the week, pushing heat index values into the triple digits with overnight lows barely dipping below 80. 🔥 Extreme heat warnings are already up across the eastern Plains and Corn Belt, with the Ohio Valley and southern Great Lakes at greatest risk for record highs.
📊 USDA Report Day
USDA releases its Planted Acreage and Grain Stocks reports this morning, with corn acreage expected to decline from March intentions while soybean acreage rises. 🧾 June 1 corn stocks are forecast up ~16% YoY, soybeans up ~4%, and wheat up 9% — our USDA Snapshot video drops within 15 minutes of the 11am CST release.
🌱 Crop Conditions Update
Corn and soybean conditions slipped slightly last week, with corn at 67% good-to-excellent and soybeans at 65%, both still above their five-year averages. 🌾 Spring wheat improved to 59% G/E, while winter wheat held steady at a weak 26% G/E with harvest now 48% complete.
🚢 Export Inspections
Corn export inspections came in strong at 1.8mmt, up 22% week-over-week and 29% year-over-year. 🌊 Soybean inspections jumped 54% to 419,124mt with China taking 16% of the total, while wheat inspections fell 9.6% to 358,253mt.
💰 Flash Sale Alert
USDA confirmed a flash sale of 136,000mt of soybeans to unknown destinations for 2026/2027 delivery. 🇨🇳 Stay tuned for more updates as the trading week unfolds!
Corn Selloff and Charts
SPEAKER_01Morning guys. It's Tuesday, June 30th, 523 a.m. Central Time. Grain markets are mixed this morning. December corn futures up a quarter cent at 4 30 and a quarter. November soybeans down one and three quarters at 11.37 and a quarter. September Chicago wheat up a quarter cent at 580. September Kansas City wheat up one and a half at 616 and a quarter. September spring wheat up four and a quarter at 605. The corn market got absolutely hammered yesterday. Why don't we start there?
SPEAKER_00It sure did. The December 26th contract fell nearly 12 cents to close at 430 per bushel. The sell-off was driven by traders adjusting positions ahead of today's USDA report, which is expected to include a sizable increase in corn stocks. The decline came despite forecasts calling for excessive heat across much of the corn belt this week. Soybean futures posted even steeper losses with the November 26th contract losing roughly 17 cents to settle at 11.39 per bushel. Wheat futures also finished the session lower.
SPEAKER_01Okay, we're going to do some report specifics in a second. We're going to do some weather specifics in a second. Let's take this opportunity to look through some charts. Here's a daily December corn chart, fresh lows. I believe those were life of contract lows posted on Monday. The contract traded down to 427 and a quarter. Got a very slight rebound since then. USDA supposedly will uh confirm that we've got the largest U.S. June 1st corn stocks since 1988. And the trade is very clearly leaning negative or bearish into this report. The trade seems to believe that uh we've got a lot of corn in the United States, old crop bushels. Last year's crop was huge. The expectation is that we're going to have adequate acres this year, and that, you know, the supply and demand situation is going to be adequate or uh dare I say burdensome. Let's go back to a bigger picture view. This is a weekly continuation chart of corn dating back to the beginning of 2024. So this tracks uh spot month contracts, and when one expires, it it picks up kind of where it left off. We filled the gap on the weekly continuation chart yesterday. There was an old gap from 2025 and 405 and a quarter. We filled that um yesterday or yeah, I guess yesterday, traded down to 398 and a half and spot month futures. If this thing continues to decline, spot month futures should see some support in the 376 and a half down to 360 and a half zone. You've got a trend line that comes off of the uh 2024 low through the 2025 low that should come in about 376 and a half, and that number is going to change uh with uh time. And 360 and a half was your low from uh, I believe it was July or August of 2024. So that area should provide a little bit of support below the market. I hope we don't get that cheap, but it's not uh that far away anymore. Here is a monthly continuation chart of corn. This states back all the way to 2008. And what this chart shows me is that we go through cycles in the corn market, just like a lot of commodities. We go through cycles. You know, we had kind of a bull market cycle from 2009 through, call it uh most of 2012 into 2013. The uh crescendo of all of that was the 2012 drought, where we peaked at uh eight eight dollars and forty-four cents a bushel in corn. We then went into a multi-year bear market from 2014 uh through all of 2019 and into 2020. And that's kind of where we're at right now. We're back into that sort of bear market. The that previous bear market, 2014 through 2019, price range was like $3 up to $4.50. The bear market we're in right now, so far, the price range has been more like $360 up to five bucks. So the range of prices has become elevated, and maybe that's a function of inflation or other things. And there's a lot of arguments you can make about corn and inflation. Like we're really not keeping up, but the price range has at least adjusted higher. Uh, that period from 20, call it mid-2020 through um a lot of 2022 was that was another bull market cycle. We had inflation, we had Russia-Ukraine, there was a big commodity trade going on. So we're just unfortunately kind of in the midst of one of these, what appears to be a multi-year bear market cycle in corn. So I mean futures uh more recently have acted much better than corn or wheat. We're kind of sitting here consolidating. We haven't seen uh the big sell-off. Maybe that's coming if if USDA tells us something about acres or stocks, or we figure out the U.S. crop is good enough, but it's it's held up much, much better. This um domestic biofuel story processing story is very friendly. We're using a ton of soybeans to make um renewable fuel, and that's a positive. The wheat market sucks, and uh, I spelled April wrong. I just noticed in this chart um it happens. Um, in any case, we went down and traded below that April low yesterday. We bounced back. I'd love to see it close. It leased above 613 and a half in the September
Severe Heat Expected
SPEAKER_01contract today for HRW wheat. That would be um a golf clap win if we could uh do that, but still, still very, very ugly. Okay, let's go to the heat.
SPEAKER_00Oppressive heat is expected to grip the plains and the corn belt through the rest of the week. Hot temperatures combined with high humidity will push heat index values into the triple digits across both regions. Overnight lows may struggle to fall below 80, offering uh little relief from the heat. Extreme heat warnings have already been issued across the eastern plains and much of the cornbelt. Relief is expected to arrive across parts of the corn belt later this week, but heat, but the heat is forecast to shift uh westward, keeping temperatures elevated for much of the plains.
SPEAKER_01All right, let's get into a whole bunch of weather maps here and discuss a few things. This is the Iowa State map. This is temperature rankings uh for the month of June, June 1st through the 29th. And uh 100 or one, if it was one on in any one of these uh areas, that would be the hottest out of the last 134 years. And you can see that most of this stuff has just been basically average-ish across the Corn Belt uh through the month of June so far. Now, when you go to just the last two weeks, just the last two weeks, the 14th through the 29th of June, we've been very, very cool, very, very cool relative to normal. And I think it's partially for that reason that the market and the trade and even farmers are not overly concerned about the forthcoming heat. In fact, a lot of farmers have told me, depending on location, of course, and everything's highly variable, but hey, we could use the heat, Joe, because it's been it's been too cool the last two weeks. Our friends at Crop Profit would tell us as much if you want to put a number on it. U.S. coron areas have been running 3.3 degrees below normal on average over the last 14 days. Okay, so the next seven days, based on Euromodel data, again from our friends at Crop Profit, U.S. corn areas expected to run 5.1 degrees above normal. And uh rainfall is actually expected to be above normal during the next seven days, despite the heat dome, because you're gonna see a whole bunch of rain in northern Iowa, southern Minnesota, Wisconsin, uh, places like that. You're gonna be a little bit drier than normal uh south of um call it the Iowa-Mouri border, southern Illinois, and and out into the eastern corn belt. Rain is is gonna happen, even though we've got kind of a dome that's gonna uh be in place here. So it's not as strong of a ridge or a dome as I think some people had expected. And you get out to that eight to 10 day period, you've got even more rain in the forecast. The issue for me, perhaps, is not necessarily that we're just gonna have a week of warm weather, but it's gonna be hot across the Corn Belt through like Saturday, Sunday. You're gonna see a couple days of cooler temperatures, and then you get right back into like an above-normal temperature situation, uh, call it middle part of next week. So during the eight to 14 day period, we're talking 4.3 degrees above normal on average across U.S. corn areas. So I think that this heat, well, maybe it's not a problem like if it happens for the next five or six days, if these extended forecasts are right and we can we continue to be in this like well above normal temperature environment, and rainfall is gonna be expected to be uh based on the models below normal during the eight to 14 day period, maybe that becomes a problem. But for now, I think the trade and and a lot of farmers also are just thinking, hey, this heat may not be a bad thing. There's gonna be some rain that comes along with it, and therefore we're not uh overly concerned about the crop. But you guys let me know what you think. I know it's it varies
Largest US Corn Stocks Since 1988?
SPEAKER_01uh depending on geography. Some of you guys have been too wet, some of you guys have been too dry. Um, but I think everybody's been a little bit cooler than normal uh over the last couple of weeks.
SPEAKER_00USDA will release its planted acreage and quarterly grain stocks report here this morning. Traders expect that planted U.S. corn acreage will decline compared to March intentions, while U.S. soybean acreage is expected to increase. U.S. wheat acreage is projected to remain mostly unchanged. June 1st stocks of corn are forecast to increase by roughly 16% compared to last year. While soybeans are slated to rise about 4% year over year, wheat stocks are expected to increase 9% versus last year.
SPEAKER_01Uh premium subs, Pete Meyer will join me for a USDA snapshot video that will be sent out within 15 minutes of the release or so, and we'll run through the numbers. It's just it's acreage and stocks. It's not gonna take us a long time to talk about. Here is the problem. This is a good chart from Bloomberg. U.S. corn supplies seen as largest since 1988. If the trade is correct, the analysts are correct, um USDA is is going to print a number today and it's gonna say, hey, you uh uh June 1st, U.S. corn stocks are 5.41 billion bushels, the largest since 1988. And McKenzie, I wasn't uh in business in 1988, I was five years old. But uh the tales that I've heard about the uh 80s and and farming are not so good, and I'm assuming that you've heard the same.
SPEAKER_00Same, yeah, yeah.
SPEAKER_01So this is it's not uh something that you want to be aligned with. You don't you don't want corn stocks to be aligned with uh the late 1980s, but that's that's uh where we're at right now. And there's there's gonna be some argument. Is that corn really out there? I'll tell you what, I I look at basis stuff a lot, and I was looking at basis maps and cash markets again this morning. There's a lot of corn in the Western corn belt, and the cash market would tell you that. Um, there are some horribly, incredibly ugly uh cash markets in the Western Corn Belt, South Dakota in particular. Cheapest one I found this morning, just at a glance, there was once one spot in South Dakota that was 97 cents under the July board for a spot delivery, 305 cash price. That's just absolutely terrible. Nobody's even sniffing a profit at that sort of level. Now you go to the central or eastern cornbelt, it's a different story. Basis has been strong. But the um the cash markets would tell you that, hey, the corn is there and it's in the Western Corn Bell, is where it is.
SPEAKER_00If you guys have not checked out our premium content, you sure need to do so. Joe, can you tell our viewers about yesterday's premium video?
SPEAKER_01Absolutely fantastic stuff from Paul Nefer yesterday. So we had the 45Z news out last week. Paul did a great analysis of this. And what he did is he went through a bunch of specific, like county examples on uh how much this tax credit is actually going to be worth to the ethanol plant. To the farmer, it is officially worth zero because the farmer doesn't directly receive any of the 45Z tax credit. But Paul talked about the tax credit that the um ethanol plants are going to be eligible for and it varies depending on location. And then Paul provided his thoughts, which I thought were very, very good, about what uh could be passed on to the farmer, how this could all work. And um, I was I I've been skeptical of this, as you know, and I've talked about my skepticism on the show. I'm a I'm maybe a little bit less skeptical now. I I think that there could be some some pass through from the ethanol plant to the farmer, especially as this thing kind of takes grip and it and it and we transition toward this sort of thing. The ethanol plants are going to want this low CI corn immediately once once they can get going, because the the money that's on the table is absolutely phenomenal. But there's a there's a lot of nuance to it, and Paul ran through all of that. I would strongly suggest if you're a corn grower, if you're in the ethanol business, if you're in any related business, you should watch this video because it's it's extremely important. I think the landscape of the cash corn market and farming practices and a lot of things are going to change because of this. If you guys want to see the premium stuff, go to standardgrain.com. You can sign up this morning. This is a $50 per month subscription. You can cancel it any time, no other fee, no other obligation, nobody will try to sell you anything else. If you are the decision maker in your farm operation, uh this is something you need to sign up for. We talk every single day about items that will help you to make decisions, whether it's grain marketing recommendations,
Crop Ratings
SPEAKER_01crop insurance, um, dealing with bankers, dealing with transition planning, agronomy. It's all stuff that applies to you. Uh, give that deal a shot this morning, guys.
SPEAKER_00U.S. corn and soybean conditions declined slightly last week. Both crops saw a 1% decline with 67% of the corn crop and 65% of the soybean crop rated good to excellent as of Sunday. The spring wheat crop saw a notable increase in conditions, with the good to excellent rating rising to 59%, up from 54% last week. Winter wheat conditions uh remained poor, with 26% of the crop rated good to excellent unchanged from the prior week. Meanwhile, 48% of the winter wheat crop has now been harvested, up from 40% last week and well above 39% on average.
SPEAKER_01Let's talk about U.S. corn conditions. The crop is rated 67% good to excellent. That's above the 64% average. So we've got a crop that's based on crop ratings, which is it's just a beauty contest. It's not, it's not a yield prediction. There is some correlation between crop ratings and yield, but it's far from perfect. We're three points above average. When you look at the state by state numbers, the states that are below average are outside of your eye states, basically. Um probably the most, I don't want to put the states in in order of importance. You all matter. Um, Ohio is 62% good to excellent below the 64% average. They're below average. Another notable that is uh below average is Nebraska, 63% good to excellent behind the 70% average. The only other states that are um below their respective averages are uh Colorado, Texas, North, and North Carolina, and everybody else. Um, Indiana is four points above average, Illinois is on par with the average at 60% good to excellent. Iowa is the nation's top corn producer, 78% good to excellent versus 72% on average. Uh Missouri's ahead of average in ratings, Minnesota is well ahead of average, uh Wisconsin's well ahead of average, the Dakotas are ahead of average. So based on the crop
Grain Shipments
SPEAKER_01ratings, and they're not an end-all be all the crop ratings are not gospel. It's just one metric. Uh the corn crop is in damn good shape, but it's it's very early.
SPEAKER_00U.S. corn shipments were near the upper end of pre-report expectations last week. USDA reported that 70 million bushels of corn were inspected for export during the week ending June 25th. The print was up 22% compared to the prior week and up 29% versus the same week last year. Soybean shipments were reported at 15 million bushels. The print was up 54% compared to the previous week and up a whopping 77% versus the same week last year. Wheat shipments fell below expectations at 13 million bushels. The print was down 9.6% from the prior week and down 25% versus the same week last year.
SPEAKER_01If our corn graphic is right and I believe that it is, that is probably the best corn shipment number for uh this week in time ever. And uh the U.S. corn export program has been absolutely fantastic. No secret there. Soybean shipments are trailing off as they typically do this time of year. Our prime soybean shipping window in the United States is immediately post-harvest. It's October, November, December. And it's for that reason that it is important that we start to see Chinese business emerge. We really need China to come in and buy 25 million metric tons of U.S. soybeans. If they don't, I think the market could be drastically overpriced at current levels. But I think that the trade and myself included, I think that a lot of people are optimistic that China will in fact come in and buy those U.S. soybeans. And if they don't, I think uh the market could be in trouble.
SPEAKER_00USDA reported a flash sale of soybeans yesterday. U.S. exporters sold five million bushels of beans to unknown destinations for delivery during the next marketing year.
SPEAKER_01Could be China, maybe not. Um, business is
Cattle and Heat
SPEAKER_01business, but you'd like to see the Chinese purchases become a trend. And uh that's something we won't know for a while with these unknown sales. Uh, what did cattle do yesterday?
SPEAKER_00Cattle futures were lower yesterday. Live cattle were five cents to 225 lower. Feeder saw losses ranging from a buck 60 down to 238. Boxed beef prices were higher. Choice was up 41 cents at 391.44, and select was up 260 at 374.18.
SPEAKER_01Mackenzie, the forthcoming heat, at least for the next seven days, is going to be more of a cornbell thing and more of like a eastern part of the country thing. But cattle areas are going to be still above normal with regard to temperatures, maybe more so during that extended period. Is this a problem? Is this something that cattle people worry about?
SPEAKER_00Oh, most definitely. Anyone that has fat cattle right now, especially cattle that are ready to uh be processed, this is a definite concern. There's going to be a fair amount of death loss.
SPEAKER_01That's unfortunate. Um, outside markets this morning, the SP is uh about flat. Crude oil is also flat, 70 76 last in the August WTI. That is unchanged on the day. Um, very quiet. Everybody have a wonderful day today. A report at 11. We'll be back on Wednesday.