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
Cooler Corn Belt Forecast = Lower Prices.... USDA Preview
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🌽 Corn & soybeans dipped Thursday as milder weather and wider Corn Belt rainfall eased crop stress — Dec26 corn closed near $4.52, Nov26 beans near $11.82
🌾 Wheat bucked the trend, climbing on tighter US supply expectations
🌡️ GFS and Euro models both flipped cooler for the 8-14 day outlook, adding to the selling pressure
💧 Drought monitor update: improvement in NW/north-central Iowa, SE Minnesota, and SW Wisconsin; minor expansion in southern Illinois and NW Ohio
🇨🇳 Fresh flash sales — 256,000mt of new crop soybeans sold, including more to China; total confirmed new crop China soybean sales now at 672,000mt (2.7% of the 25mmt target)
📉 Corn export sales came in soft—down 23% week-over-week
🛢️ Record US biofuel mandates are pulling in a wave of European biodiesel imports — first shipments since December 2024—as domestic plants struggle to keep up
No Snapshot video today—July WASDE is typically a quiet one, and I've got some prior commitments. Back to the regular lineup next week.
📊 Charts, drought maps, and the China Soybean Purchase Tracker in the video.
👍 Like, subscribe, and drop your yield/stocks predictions in the comments before the number drops!
Subscribe and Review!
SPEAKER_02Morning guys, it's Friday, July 10th, 5 27 a.m. Central Time. Grain Market's a little bit lower this morning. Welcome back to Grain Markets and Other Stuff. Uh Mackenzie Johnston is my co-host. My name is Joe McKenzie. What's going on, Nebraska? What are you doing this weekend?
SPEAKER_00Uh, not a lot. Just keeping track of water, running pivots, and uh yeah, just trying to stay cool.
SPEAKER_02Brian Split, one of our favorite guests, is here.
SPEAKER_01Brian, how are you doing this morning? Good, Joe. My wife's birthday is Sunday, so we're gonna have a uh birthday extravaganza Saturday night.
SPEAKER_00Oh, nice.
SPEAKER_02My wife and your wife are are uh distant friends. They hit it off when uh they met the first time. They did, yeah. My wife was like, Oh, you're in business with Brian. That's cool. I like his wife. That's what she said.
SPEAKER_01It works out nicely, yeah. Why is get together? And uh Lauren is also friends with Mackenzie, so it works out great.
unknownYeah.
SPEAKER_02Hey guys, couple of housekeeping notes that I've got to run through before we start this morning. Uh, first one is this if you are not subscribed to the channel on YouTube, I never ask you guys to subscribe. Please hit the subscribe button. Our channel is criminally undersubscribed relative to the views that we get. So a lot of you guys are watching and you're not subscribed. If you're listening on the Apple Podcast app, please leave us a review. It'd be very helpful to our premium subs. Here's a couple of notes today. Uh, there will not be a USDA snapshot report. I don't think this report's gonna be exciting, but we'll talk about that in a second. We will have our uh video. I did an interview with Krista Swanson from National Corn Growers yesterday about the whole Brazil versus U.S. production cost study. That one's gonna be out a little bit later this morning. Last thing I wanted to mention also for the premium subs, I know you guys are all listening here as well. Our emails, our morning blast and our midday blast are all now coming from info at standardgrain.com
USDA Preview
SPEAKER_02rather than my email address. So if you didn't see the emails, they're definitely going out. They're probably in your junk folder, spam folder, promo folder, whatever. Okay, with that, uh let's get going. We've got a USDA report today. Let's start there.
SPEAKER_00We sure do. The USDA very uh very rarely changes its corn and soybean yield estimates in July. Analysts are expecting a notable decline in new crop U.S. corn ending stocks, while new crop soybean stocks are forecast to increase modestly and wheat ending stocks are expected to edge lower. Globally, traders expect corn and wheat ending stocks to decline, while soybean ending stocks are projected to increase slightly.
SPEAKER_01All right, split. What's gonna happen today? Snoozefest? Um, you know, I I think uh oftentimes, even if the market uh portrays the report itself as a snooze fest, if the funds have uh something that they want to do regardless, they're gonna do it. Um, and sometimes they just use report days as the excuse. There's a little bit more liquidity in report days, there's a lot more volume. So if they've got a uh an agenda and the report does not uh change their mind on that agenda, they're going to uh plow into that agenda regardless of what the report says. So um, as far as the report, we know, as you had mentioned, that uh soybean acres are going to be higher, so uh soybean production will be increased uh from that uh uh acreage perspective alone. Um and then to McKenzie's point, it is very rare to see yield adjustments in July. Um, examples would be maybe 2019 because of the extreme flooding that we had during planting or uh 2012. Obviously, we had a major drought. Uh, but uh without those circumstances, uh the USGA will typically leave yield alone and then make their first adjustment in uh the August WASI report.
SPEAKER_02I think on uh the old crop balance sheets, I wouldn't be shocked to see the corn export number uh revised a little bit higher. Correct. The program has been excellent, but I feel like this report, my my recollection of this report throughout the years is that you know it's it's July 10th. We're usually kind of trading weather more so than anything that USDA has to say. And that's kind of the idea that I'm leaning toward right now. I just I don't know if I see a big surprise, like market moving surprise today.
SPEAKER_01Yeah, because if if there was a surprise, it probably came from the stocks report and the acreage report. And then it just needs to be rectified into the balance sheet on this report. So there's really nothing that's going to be something that we haven't thought about yet
Price Action, Chart Review
SPEAKER_01that's likely to pop up. That's uh that's uh a low odds of that happening.
SPEAKER_02If there is a big surprise and there's something we need to talk about, we'll talk about it on Monday. Let's go to price action.
SPEAKER_00Corn and soybean futures moved lower yesterday with the December 26th corn contract falling about four cents to close at 452 per bushel, and the November soybean contract declining roughly 11 cents to settle near 1182 per bushel. The decline was fueled by forecasts calling for widespread rainfall across the corn belt and more moderate temperatures in the weeks ahead. A notable shift from earlier forecasts that called for excessive heat. Disappointing weekly export sales also pressured the market. Meanwhile, wheat futures moved higher, supported by expectations of tighter U.S. wheat supplies.
SPEAKER_02All right, Brian, here's a D's corn chart.
SPEAKER_01Analyze this. Um, we took back half of the whole break, right? So it took uh about a month and a half to see that uh break from the May 13th high to the June 30th low. And uh we we took half of that uh break back in uh a matter of about five, six sessions. So uh the market is now um uh falling off of that resistance point coming into the report. Uh what we would like to see today, uh to me technically, is I'd like to see this market catch around 446. Uh when we think about the last two weeks going into the uh 4th of July weekend. So the high last week made on Thursday was at 446. The high the previous week on Friday to finish the week was the weekly high at 446 and a quarter. So that was really the breakout point to start the week on on Sunday night coming out of the weekend with that strong buying. Uh that would also be about the halfway point of this rally that occurred. So I'd really like to see that that 445-46 area catch. That was also, if you look back to that uh early part in 2026, the January low was 45 and a quarter. So I prefer to kind of hold that shelf um and then kind of get a uh uh a base of support built again uh where we can consider 440 the low end of the range. I I'd like to avoid uh trading back below 440 because then that opens up the door to the lows we made on that June report. But prior to that, that 440 to 45 level was a very good low end of the range, and I'd like to uh to see that continue moving forward.
SPEAKER_02On the fundamental front, um the weather forecasts have flipped a little bit cooler. We're gonna get to that in a second. I was told, Brian, that there was some heavy selling of old crop farmer-owned bushels Monday and Tuesday into the uh first couple days of the rally. And uh that makes sense, I guess. I think there was still a lot of unpriced old crop out there, and maybe that helped along with the weather forecast to cap this rally attempt.
SPEAKER_01Correct. I think when you have a uh uh high that was made this week, that seems like it's a pretty technical juncture. Um, whether it was the D's retracing 50%, you could go out to uh March of 27, July of 27, D's of 27, all taking back half of their break. Uh the September contract, which is what new crop is or the old crop is priced off of, that uh didn't quite make it to its 50% retracement. I think that adds to the element of, yeah, there was probably some new crop that was sold on the bounce, some limit, maybe some catch-up sales, but I think the old crop really limited the uh the ability of that uh the September contract to achieve some of the targets that that the new crop uh uh uh contracts were able to achieve.
SPEAKER_02I threw in a weekly corn chart today just to illustrate how really unexciting the market has been for the last three years. We've been stuck in a price range essentially, spot corn futures from call it 360 up to like 505 is the very upper end of the range. We're 428 spot futures this morning. That'd be the July contract, which is going off the board. But uh, did does anything really stick out to you here on the weekly chart other than just consolidation?
SPEAKER_01Yeah, I mean, this is a consolidative period. The longer that this lasts, um, I think we could probably all agree that we have a very good idea of where the low end of the big picture range is. And uh there is still risk of re uh revisiting the low end of the range um when we get up near five. That is the upper end of the range, and it's very clear to me what needs to happen, what needs to occur in order for a bigger picture bull market to occur. Uh, even within this sideways trading range, we can see that there's kind of the big picture $5, 360 range, and then you've got like the um kind of the secondary range where kind of the the 390 to 95 area is a lower uh secondary low end of a range, and then like 470 to 480 is kind of a secondary upper end of a range. Uh, so we've got kind of ranges within ranges, but uh this this market is smack dab in the middle of it right now. And uh we've got uh further downside potential, uh, assuming weather stays uh reasonable, and uh, you know, we had kind of a short-term weather blast on the idea that there's some heat, we could still very well end up with September corn uh revisiting the uh the July lows that were made at 398 and a half, uh, or uh uh potentially breaking down below those long term into the month of August before expiration. Uh and there's still gonna be the weight of the old crop that could be part of that story.
SPEAKER_02November soybeans is a test of the 1214 high for May still possible?
SPEAKER_01Uh of course it is. I'm I'm not gonna say it's it's not possible. I would never say that, but I think in the short term, it's uh it looks like we want to revisit maybe the 1165-ish area. Um, that seems to be where we like to go after failing at 12, uh, whether we catch there and then get another pump back up to 12 uh to revisit that. That probably has everything to do with uh whether China comes in and buys a little bit more or the forecast coming out of the weekend. If it looks exciting again as we start to think about late July, early August, uh then we could very easily pump back up to 12 uh to 1214. Um and so we really would like to see the 1164 to 1174 zone hold on any weakness. Uh as long as we're kind of holding that uh that horizontal shelf uh and move back up to 12, uh, I don't think is is out of the question. Uh I would prefer uh to stay above that 1160 area in the short term because I think if we do drop back below 1160, then we're right back into that range where 1125 to 1160 uh consolidation occurred before this week. So uh uh prefer to stay above 1160, below that, we're probably checking 1125 again.
SPEAKER_02Uh Kansas City wheat rejected some, I would call it obvious resistance earlier this week. I feel like we've been kind of following the row crops around here to some extent.
SPEAKER_01Yeah, I mean, uh the wheat definitely still has a little bit of its own story. Um, you know, and again, maybe there was some buying yesterday in anticipation of the the wheat report being uh a little on the friendly side, but um I I tend to think that this is a uh market that right now is is in a sweeping 50 cent range. We've already seen the exciting move of the market uh trying to price in the reductions of the production, whether it was from the yield or the acreage standpoint. Um and so right now it seems like that uh that upper end of the trading range held again, and uh we're likely to revisit the low end of the range on the uh the wheat market unless we get something really friendly today. But I think we've already seen the the uh crux of all of the friendly uh uh wheat data um has come and gone. And so we're still gonna have a little bit of late harvest pressure. I think there's still some wheat bushels out there that weren't priced yet that now are gonna be priced off a CEP that they're gonna be ready
Cooler Forecast = Lower Prices
SPEAKER_01to market on on uh any short-term rallies as well.
SPEAKER_02Okay, let's go to the drought monitor, which we will use as a segue to get into this shift in the weather forecast.
SPEAKER_00The majority of the Corn Belt experienced above average temperatures last week, along with widespread rainfall. This led to an improvement in drought conditions in northwest and north central Iowa, southeast Minnesota, and southwest Wisconsin. There were some areas of deterioration with only minor drought expansion in southern Illinois and northwest Ohio. In the high plains, temperatures ran above normal and rainfall was limited. Despite these dry conditions, drought changed very little, with only a slight worsening in eastern Nebraska. When we look at the percentage of U.S. areas experiencing drought, corn country currently stands at 19%, soybeans also 19%, winter wheat 47%, spring wheat 19%, and cattle country, cattle country 46%.
SPEAKER_02Brian, I've been told that 90% of corn yield variability is determined by July weather. I don't know if that's still true or not. I think it is. I pulled the um Iowa state maps for July month to date, both precipitation and temperature. Um, this is precipitation. So a couple of those areas of you look at central Iowa and then north central Iowa and then northeast Iowa also uh would be southeast Minnesota, like among the wettest on record of the last 134 years. You've got some areas that have been drier, some areas closer to average. Um, what are you hearing about just rainfall in general? Has it been adequate? Has it been too much in some areas?
SPEAKER_01Oh, it's definitely been too much in some areas. I mean, this is uh when you look at the the differentiation in just numbers, right? I mean, so look at like the northeast corner of Illinois, uh, which is where I would reside, uh, that's a five, right? That means we've had a very wet uh uh period. Now you go further south and west, and then you get into that pocket where it's like we meet Missouri and that's 106. That's been pretty dry there. Uh, and that's not a very big deviation geographically, right? That's uh, you know, the northern part of the state to the central part of the state. Uh you go further east and you can see some big swings. I mean, look at Ohio, right? You've got a 16 just above 104, right? County to county or district to district. So there are uh areas that have uh soybeans that uh are short, that are yellow, uh, that are underwater. You've got other areas where the beans are bushy, they look great. Uh, we've got yellow corn out there because it's too wet. You've got corn that looks great that's that's already uh looking to pollinate. So the the differentiation in crops, I think, is is pretty big. Um and so this is stuff that is likely to kind of come into the wash down the road, where maybe come September, October, November, we get in the field, we're gonna start getting a little bit more of an idea of how this um this differentiation and precipitation has affected the crops. But I think right now, when when you think about things in a big picture sense, crop conditions as a whole have held together. Uh crop conditions versus five-year averages look pretty good. So the trade's gonna be reluctant to uh really price in a deviation from uh from trend here aggressively because of that.
SPEAKER_02Okay, here's heat or uh this is this is actually low temperatures, so this would be like your uh overnight stuff, I think. And in the eastern corn belt, especially call it Illinois East or even Eastern Iowa East. We've been very warm, and and even the Western Corn Belt has been above normal in terms of temperatures. This, I think, has been more so the perceived issue or was the perceived issue when the corn market, soybean market was rallying that you know, July could end up being uh very warm. Um I haven't heard that much farmer concern about it, though. It's like I think the farmers looking at saying, hey, we're catching the rain, you know, it's July, it's hot.
SPEAKER_01Yeah, I think the the majority of the concern would be from your statisticians, if you will, right? That look at over the years and say, all right, well, these overnight lows do tend to have a uh impact on yield. And so when I look at that eastern two-thirds of Ohio, uh, even the whole state of of uh Indiana, when you think about you know how that ranks as far as uh the last 134 years, we've got you know easily some top 10, uh, but uh the the eastern corn belt uh might have one of those kind of phantom yield losses where uh overnight lows were too high and just didn't let the crop rest overnight. And uh that might be something that comes into the yield mix down the road.
SPEAKER_02Okay, so this next graphic is kind of the money graphic for today. If you want to know why the market's been down the last couple of days, it's because two days ago on Wednesday, the GFS flipped cooler in the extended forecast. And then yesterday, the Euro model followed, flipped cooler in the extended forecast. The eight to 14 day um temperature forecast was 2.7 degrees cooler for U.S. corn areas yesterday than it was the prior day. So you've got both models now kind of in agreement that, you know, there's gonna be there's gonna be heat and we're still gonna be above normal, but it's to a lesser degree. The Euro model this morning would indicate great stuff from our friends at Crop Profit here. The Euro model would indicate that U.S. corn areas will be three and a half degrees above normal over the next seven days. The GFS says 2.9 degrees above normal. The eight to 14 day, which I think was was the concern, now only two and a half degrees above normal uh during the eight to fourteen is what's being projected. And the GFS 2.7 degrees above normal. And the difference, Brian, between like running two or three degrees above normal and running, say, four or five or six degrees above normal is um massively significant from a statistical standpoint. Premium subs. If you guys watched yesterday's video, we had some really great stuff from Crop Profit on uh the correlation between overnight temperatures and final corn yields. It's um it's a big deal. So I think I think that that the heat and and now the cooler forecast, Brian, has been for me, that's that's been the catalyst the last few days.
SPEAKER_01Yeah, definitely taking the wind out of the sails of this rally here. And um, you know, weather forecasts uh change and uh they flip fast and and they're gonna make the market flip fast.
SPEAKER_02Precipitation is likely to be a little bit below normal. I don't think this is the trade's concern, though. The GFS uh forecast for the next 14 days would indicate 61% of normal rainfall for uh U.S. corn areas. And that that the dryness,
Soybeans and China
SPEAKER_02you know, could become a problem. It's it's a big deal. It's July, it's a very important time of year. Uh Euro is a little bit wetter by comparison. Let's go to uh soybeans and China.
SPEAKER_00Uh USDA reported multiple flash sales yesterday. U.S. exporters sold 5 million bushels of beans to China and 4 million bushels of soybeans to unknown destinations for delivery during the current marketing year.
SPEAKER_02All right, Brian, here's where we stand when you include uh the stuff in the export sales report plus the flash sales. We've now sold a total of uh what is the number? 600 and something 672,000 metric tons of new crop uh U.S. soybeans to China. That's 2.7% of the 25 million metric ton target laid out by the White House. Um, are we gonna hit the target?
SPEAKER_01I think we'll hit the target. Um maybe not on the on the exact timeline that they're advertising. Um, I know the initial 12 million tons took a little bit longer than uh what was uh initially advertised. And then some of the verbiage they were using where they were talking end of season, like what does that mean? So there's still gonna be some vagueness to it, I think, but I I do believe that China will uh will procure uh roughly that amount of soybeans for uh for this crop year. Um, you know, as far as timing uh and announcements of the of some of these purchases, it just seems like when we think maybe back to the rally that we had in fall, like uh the talk of China buying was there. Uh, then we had the the rally, and then we started to get confirmation of sales, and then that's when the market started to come under pressure. So I just wonder if we're not seeing another element of that where we had a big run up in the in the futures market. Uh, part of that was weather, part of that was was uh undoubtedly some Chinese buying, but now we're getting confirmation of sales from the USDA. Yes, China bought this, unknown bought that, and we're starting to see a little bit more two-sided trade. Uh, again, part of that is weather, but I think another element of it is that that buy the rumor, sell the fact where, oh, China's buying, and now we're getting it confirmed, so we're gonna start taking profit as well.
SPEAKER_02I wanted to show you guys this uh this morning. USDA is projecting that new crop US oil being exports will rise to 1.63 billion bushels from uh one and a half this uh current marketing year. And this is the way that the breakdown could look. So that that 1.63 billion bushels, that's 44.3 million metric tons. If China buys 25 million, that means that China would account for ballpark 57% of all new crop US soybean exports if these forecasts, the White House plus USDA, are correct. And I've I get I get a lot of questions about this, Brian. Like, what is USDA saying about you know China and purchases? And they don't really give you a breakdown. They just say, hey, the US is totally right. We project that the U.S. will export 44 million metric tons of soybeans during the new crop marketing year, but they don't give you a China projection.
Weekly Export Sales
SPEAKER_02The China projection is coming from the White House. So how the breakdown looks, we we really don't have any idea. Uh let's go to the weekly export sales report.
SPEAKER_00U.S. corn export sales fell below pre-report expectations last week for the weekending July 2nd. Net corn sales were reported at 22 million bushels. The print was down 23% from the previous week and down 38% from the prior four-week average. Mexico was the largest buyer. Net soybean sales were near the lower end of expectations at 2 million bushels. The print was up 30% from the previous week, but down 81% from the prior four-week average. China was the largest buyer. And then wheat sales for the new marketing year were also near the lower end of expectations at 12 million bushels. The print was up 4% from the prior week with South Korea as the largest buyer.
SPEAKER_02The trade's definitely gonna start to watch uh new crop sales a little bit more closely rather than old crop sales. As I mentioned, I feel like USDA may need to come up with that corn export number for current marketing year. But uh on the export front, Brian, US corn is still competitive, man.
SPEAKER_01Yeah, and and so this is where kind of that danger of looking at the US balance sheet for uh for corn from the USDA, where it's uh it's a lower export number for new crop, but mainly because of the size of the crop is reduced due to lower acres, right? So what they will then do is they will reduce the demand profile because the crop is smaller than the previous year. But the price itself is not doing anything to uh to discourage demand. So I think there's going to have to be a reckoning where uh if prices continue to stay at these levels, then the USDA. Is likely to be too low on new crop uh export demand moving forward. So the the demand doesn't change just because USGA says it does. The price will likely need to do something to discourage the demand, and we're not at that point. So I think uh unless the the new crop board uh you know maybe gets back up to some upper fours,
Biofuel Update, Biodiesel Imports?
SPEAKER_01low fives, we're gonna end up having another repeat where we have the uh the export program really outperform. Yep. Okay, we got a biofuel story.
SPEAKER_00Yep. So more than 13 million gallons of European biodiesel have been imported into the U.S. since early May, marking the first shipments from Europe since December 2024. The unexpected increase comes as domestic production has struggled to keep pace with the Trump administration's record biofuel blending mandates. Many U.S. biodiesel plants remain idled or shuttered following last year's policy uncertainty, limiting the industry's ability to quickly boost production despite ample soybean oil supplies. While farmers and biofuel producers support the policy, refiners argue the mandates are unrealistic and could lead to higher fuel prices.
SPEAKER_02It's kind of like a two-sided argument. This has helped to um help to push renewable fuel credits to basically, I think, all-time highs. Um the targets for you know blending are crazy high. Uh crush margins in the United States, Brian, the cash crush margins and not the board crush are like they're like four to five dollars per bushel positive. So I think that this is just it's something that will keep domestic demand for soybeans very, very strong. And if we import some biodiesel, I don't think it doesn't bother me.
SPEAKER_01No, I mean uh let's use as much of it domestically as we can. And if we need to, because of the mandates, import some actual uh biodiesel, then so be it. But uh these crush margins are going to continue to incentivize additional crush capacity to uh to over the next couple of years uh just get more of that production domestically and hopefully where we don't need to uh import anything uh to meet these mandates.
SPEAKER_02So the refiners are arguing that the mandates are unrealistic and they'll lead to higher fuel prices. The EPA says that this is normal month-to-month variability and blending. They defend the mandates as being achievable and appropriate. I asked Pete Meyer what he thought yesterday. He said he's kind of on the side of the EPA. They're achievable, they're appropriate, and um, you can get there. You just got some variability. Uh McKenzie, cattle got beat up yesterday a little bit.
SPEAKER_00They sure did. Live cattle were a buck eighty two, were a buck eighty to two forty-eight lower, and then feeders, they really took a hit with losses ranging from 490 down to 590.
SPEAKER_01Quick cattle market thoughts, Brian. Uh, I really don't want to see live cattle take out the early June low. Um, I think June lows in a lot of different markets, even outside of cattle, are going to be really important. And uh, we had made a uh June low in the live cattle uh right as that kind of initial screwworm news hit in early June, and we were able to recover off of that uh rather aggressively. So now we're in danger of maybe trying to violate those June lows. We've held them so far, uh, but a breakdown through that in the month of July, especially considering the month of July uh last year was was a very strong month where the funds came in early in the month and they said we're gonna buy uh cattle and they took it higher all the way into the end of August. That has not been the case this year. So the fund manager has not shown the same interest in cattle so far in the month of July that they showed a year ago.
SPEAKER_02All right, guys, outside markets, very quiet this morning. Brian, thank you for joining us. Everybody have a wonderful weekend. Uh, we will be back on Monday.