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
Soybeans RALLY on China Buying and "Non-Stop" Corn Belt Heat
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🌱 China Returns to US Soybeans: China's COFCO purchased 300,000mt of US soybeans Monday, its largest buy in months, with volume potentially reaching 600,000mt as more deals finalize. 📊 Despite the move, China has only committed to about 2% of the 25mmt annual target agreed to last fall.
🤝 Xi-Trump Meeting on the Horizon: President Trump says Xi Jinping may visit Washington around September 24, coinciding with the UN General Assembly. 🏛️ The visit comes as the two nations navigate a fragile trade truce, with tariffs, Taiwan, and Middle East tensions still simmering in the background.
📈 Grains Rally on Weather & Demand: Corn and soybean futures surged Monday, with Dec26 corn hitting its highest close since early June and Nov26 soybeans reaching their best level since late May. 🌧️🔥 The rally was fueled by scorching Corn Belt heat forecasts plus flooding in Iowa, Illinois, and Wisconsin, alongside renewed optimism over Chinese demand.
💰 Funds Turn Bullish: The latest CFTC Commitment of Traders report showed money managers net buying corn, soybeans, and SRW wheat for the week ending June 30. 📅 It marked the first time since late April that funds were net buyers of both corn and soybeans simultaneously.
🌽 Crop Conditions Steady: US corn conditions held at 67% good-to-excellent, unchanged week-over-week but still below last year's pace.
🌾 Soybeans dipped slightly to 64% while winter wheat harvest raced ahead at 59% complete, well above the average pace.
🔥 Record Overnight Heat Alert: CropProphet's data shows the June 29–July 4 stretch brought the warmest overnight temperatures on record for corn-producing regions since 1981. 🌡️ While daytime highs were merely top-4 historically, those scorching nighttime lows are now a key risk factor to watch as the crop develops through July.
🚢 Export Shipments Mixed: Corn export inspections beat expectations at 1.6mmt, up 5% year-over-year, while soybean shipments jumped 32% versus last year with China driving half the volume. 📉 Wheat shipments disappointed, falling 66% week-over-week and 74% below last year's pace.
China Buys US Soybeans
SPEAKER_00Morning guys. It's Tuesday, July 7th, 5 23 a.m. Central Time. Grain markets are mixed this morning following a sharp rally yesterday. December corn futures down a quarter cent at 4.57 and a half. November soybeans up one and a quarter at 11.93 and a half. September Chicago wheat down two and a quarter at 6.11 and three quarters. September Kansas City wheat down three and a quarter at 646 and a half. September Spring Wheat down one and three quarters at 627 and three quarters. Welcome back to Grain Markets and Other Stuff. This is the best grain market show to ever exist on planet Earth. My name is Joe McKenzie Johnston is my co-host McKenzie. What's going on in Nebraska this morning?
SPEAKER_01Um, it is hot and humid. Not a lot.
SPEAKER_00I think that's uh similar for probably the vast majority of the people uh watching and listening this morning. Yeah, big E wave. All right, uh let's start with soybeans. Big news yesterday.
SPEAKER_01Yep. So China returned to the U.S. soybean market on Monday with its largest purchase in months. Chinese state-owned grain trader Kafko purchased five cargoes or at least 300,000 metric tons of U.S. soybeans for shipment between September and November. According to traders, the volume could increase as additional deals are finalized with total purchases potentially reaching 600,000 metric tons. According to a White House fact sheet, China agreed uh last fall to purchase 25 million metric tons of U.S. soybeans annually through 2028. For the current marketing year, U.S. soybean exports to China are down 47% compared to last year.
SPEAKER_00Okay, so we had a sharp rally yesterday, and I told you guys it was weather and maybe China. And now we know that it's weather and China combined into this kind of perfect storm to uh set up for the rally. And we'll talk about price action here for a second. Mackenzie mentioned the White House fact sheet, and I understand that for a lot of you the fray the phrases White House and fact sheet don't necessarily go together. Um, I don't care who you voted for. We're just talking about these fact sheets and whether or not they've become reality. The fact of the matter is that these fact sheets to this point have been pretty much factual within a margin. This is the first one from November 1st, and we've talked about this at length. We don't care who you voted for, but we do care about policy, and this is kind of a policy item. The first part of this from November, and there's basically been two of these as it relates to uh the grain markets in China. China will make or will purchase at least 12 million metro tons of U.S. soybeans during the last two months of 2025. That is factual. It happened within a margin. It was they were a little bit late, but it happened. The second part of this first fact sheet, they will also purchase at least 25 million metro tons in each of 26, 27, and 28. I take that to mean marketing years, like the 26, 27 marketing year, but all of that is still possible. So we can't say that it's non-factual yet. Um, additionally, China will resume purchases of U.S. sorghum. They have done that. The logs stuff, I have no idea. That's not something I track. Uh, you go to this the second White House fact sheet, which is from May, and this is where it gets a little bit more interesting. Um, China will purchase at least $17 billion per year of U.S. ag products in 26 prorated, 27 and 28, in addition to the soybean purchase commitments that it made in October. So if they're gonna buy another $17 billion or $17 billion of non-U.S. ag products, I think it almost has to include some corn purchases. And while it was not confirmed by traders cited by Reuters, and that's not a solid confirmation, but that that's usually a very accurate source. There was all sorts of chatter yesterday behind the scenes about China inquiring for U.S. corn. So the fact sheets have been uh fairly factual to this point. That's not to say that they will be moving forward, but they have been to this point. So China's buying some new crop beans, right? Where are we at? When when does China normally begin new crop U.S. soybean purchases? Normal is is probably not the right word to use here, but it's the word that I used this morning. You're not supposed to be be able to read every line on this chart if you guys are watching, but it uh varies and it's been later and later and later uh in recent years. You can see my little uh annotation there above the month of July. That's where we're at right now. Very, very slow start. Um, if China did, in fact, buy another, whatever they said, 300,000, that puts us up to 500,000 total. That's uh that's still only like 2% of the 25 million metric ton target. So they've
Trump/Xi Meeting
SPEAKER_00got a long, long way to go if they're gonna hit that target. But the trade appears to be uh very optimistic about it. And this next story is another reason for the optimism.
SPEAKER_01Right. So according to President Trump, Chinese President Xi Jinping is expected to meet with him in Washington around September 24th. Trump mentioned the potential visit while discussing construction of the new White House ballroom. The two leaders last met in Beijing back in May, where according to the White House, China agreed to purchase at least $17 billion annually in U.S. agricultural products through 2028. That commitment was in addition to the soybean purchase commitment, um, soybean purchase agreement China made last fall.
SPEAKER_00I think this is just kind of fuel to the fire. So we had the the put them put the word confirmations in quotes of uh soybean purchases. And now you've got Trump planning to talk with G uh right around U.S. soybean harvest uh timeframe, which is that's when we typically ship a lot of soybeans to China is immediately post-harvest. We really need them to see, we need to see purchases ramped up before then, though, I think, if we're gonna hit that target. Unless, of course, you know, you see some contra-seasonal and non-economic sensual purchases that
Row Crop Rally, Charts
SPEAKER_00uh they made last year. China bought U.S. soybeans uh this past year at prices that didn't really make sense for political purposes. And I'm not gonna rule that out. That could happen again.
SPEAKER_01Corn and soybean futures surged yesterday amid weather concerns and renewed optimism over Chinese demand. The December 26th corn contract climbed about 16 cents to close near 458 per bushel, its highest settlement since early June. The November 26th soybean contract jumped nearly 45 cents to settle near 1192 per bushel, its highest close since late May. The rally was driven in part by mounting weather concerns. Forecaster calling for above average temperatures across the corn belt for much of July. Optimism over China's return to the U.S. market largely supported soybean futures. Wheat futures also ended the end of the day in positive territory.
SPEAKER_00We're gonna get to weather in a second. Stick around for that. I've got some really cool stuff from our friends at Crop Profit. Let's look at the charts. Uh, big spike higher in uh new crop corn futures. And we traded and are trading today above some uh previous trend resistance. So I think that that April low at 469 and a quarter above the December corn contract is gonna be an area that a lot of people watch. Um, if this is really a crop scare event, and I'm gonna talk about crop scare events in today's uh premium video. The charts don't matter a whole lot, to be honest. That's been my experience in the past, but that's one area to consider. Uh November soybeans look absolutely fantastic following that big upday yesterday. 44 and a half cents higher. That's like uh 3.9% in one day. That's a big day in beans. I think it's very reasonable to go up and test that 1214 uh peak uh from back in May. Wheat, kind of a follower here. 664 and a half will be your next resistance above the September HRW wheat contract. But this seems to be more of a row crop specific thing, given that uh the weather stuff, the heat, and the the drier uh conditions forthcoming is a row crop thing. And also the China stuff appears to be mostly row crop uh in nature.
SPEAKER_01If you guys have not checked out our premium content, you sure need to do so. Joe, can you tell our viewers about some of our recent premium videos?
SPEAKER_00Should you sell corn into this rally? New crop corn, old crop corn 27. I also talked about soybeans in yesterday's marketing review. I lay out a very simple and easy to follow grain marketing plan for my premium subscribers. It's just cash sales. I basically uh benchmark the futures prices, the date at which uh the bushels were priced, a percentage of your expected production, and uh I kind of lay out a plan. And I talked about everything that I've advised and what I plan on doing with this uh current rally. And there's probably going to be another marketing video sometime uh later this week, would be my guess. Chris Barron was on um Thursday last week, talked about input inflation. And if you guys aren't working actively with some sort of program to accurately track your budgets down to like the penny, you need to be. It's extremely important. But uh Chris talked about kind of like on-the-farm inputs and and how we're gonna see inflation again in 2027 and put a number on it, specific percentages, where's the inflation coming from? He's got all the categories uh broken out. It's super interesting. In today's premium video, I'm gonna talk about crop scare events. And the title of the video is going to be How long do crop scare events last? And it's gonna be kind of a seasonal uh study on on we're gonna pick out specific years in which crop scared events and talk about like, hey, when has historically been best practice to sell into this thing? When has it not been best practice? Uh, after how many days should you look to start selling into this thing? That's what we'll talk about today. If you 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 at 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, this is must-watch stuff. Uh, we also have a new feature, which is the audio
The Funds
SPEAKER_00only feature. So if you want to listen to uh the videos rather than watch, you can listen to them on your phone just like you would a podcast uh piece of cake. Give that deal a shot this morning, guys.
SPEAKER_01The CFTC released its weekly commitment of traders report yesterday for the weekending Tuesday, June 30th. Large money managers were net buyers of 8,000 corn contracts. The funds were also net buyers of 1,000 uh 1,000 soybean contracts. Last week was the first time since late April that the funds have been net buyers of both corn and soybean markets. Uh, and lastly, the funds were net buyers of 3,000 SRW week contracts on the week.
SPEAKER_00Okay. So, McKenzie, this is all old news because it's accurate as of June 30th. Right. And we saw a big run up in prices yesterday. Uh, this is something, if you guys are watching, that we include in our morning email every single day. This is the daily fund tracker. Funds were estimated buyers of 36,000 contracts of corn in net yesterday. And some of the sources thought it was more than that. Some of them thought it was 40 or 50,000. So in real time, the funds are probably still net short, like 30,000 contracts of corn, uh building the net long in soybeans back up to 68,000 as of yesterday, and uh still net short about 56,000 contracts of SRW wheat. So if uh large speculators truly believe that
Crop Conditions and Overnight Temps
SPEAKER_00this China stuff is the real deal, that the heat is a real deal and it's going to become problematic and uh result in yield loss, they've got a lot of ammo to uh continue buying here.
SPEAKER_01U.S. corn conditions held steady last week. The corn crop was rated 67% good to excellent nationally as of Sunday, unchanged from the previous week and above the five-year average of 65%. Although corn conditions are still well below last year's 74% rating. The soybean crop was rated 64% good to excellent nationally, down one percentage point from the previous week, but above 61% on average. The spring wheat crop also declined slightly with 57% rated good to excellent, down from 59% the prior week, but still comfortably above 52% on average. And then the winter wheat harvest is advancing rapidly with 59%, 59% of the crop harvested, up from 48% the prior week and well ahead of 51% on average.
SPEAKER_00To look at corn ratings state by state, you've only got a handful of states that are below average. Um, Illinois is now below average, 58% good to excellent versus 60% on average. Ohio is below average in corn ratings, 55% good to excellent versus 66% on average. Um, Nebraska, 62% good to excellent versus 71 on average, Colorado's below average, Texas below average, and North Carolina below average. Everybody else is above average. Rather than continue on um the uh crop condition numbers, I want to read you guys something from our friends at Crop Profit regarding recent heat. Let's get into weather here for a second. Um, I said something like this yesterday, but this is a much smarter, more intelligent version of what I said yesterday. It's summer, it gets hot. That is true. But the market relevant question is not whether summer can be hot. It is how hot this stretch was compared to normal and compared to history where U.S. corn is actually produced, from June 29th to July 4th, U.S. corn production weighted temperatures ranked near the top of the 1981 to 2026 record. Minimum temperature, 69.6 degrees, normal, uh, rank number one warmest of the last 46 years. So this matters. Overnight temperature in particular is a big, big deal as it relates to uh corn production. And a lot of you guys are at different stages of production depending on where you're located when you when you plant it. But the way that it looks, this trend of just drastically above normal temperatures is going to continue. And I don't know what it means for the crop. I couldn't imagine that it's good. I'm I know modern genetics and and modern seed varieties are are very good and they're drought and heat tolerant and all that stuff, but I don't know. I feel like this is this is gonna ding yield a little bit. So the next seven days, we're looking at 73% of normal rainfall based on Euromodel data across U.S. corn areas. Temperatures, which I think is is what I'm watching more closely, are gonna average 2.8 degrees above normal. 2.8 degrees, not a huge deal, but this is this is the break in the heat. This is the break in the heat. We're only gonna be 2.8 degrees above normal. Uh rainfall during the 8 to 14, it's this the forecast is drier than it was yesterday. Only 46% of normal rainfall expected for U.S. corn areas. And look at the temperatures now warmer than this forecast was yesterday, uh, based on Euro model data, 6.4 degrees above normal across U.S. corn areas during the 8 to 14. And again, you get out, these are new maps every day, guys. You get out to the the third week and you're talking 4.6 degrees above normal, and you get out to the um fourth week, I guess I don't know my fourth week chart. It was it was very similar, like four to five degrees above normal. So there's just it's just non-stop corn belt heat. And I think that as Crop Profit uh mentioned, the overnight temperature stuff, the the fact that overnight temperatures are essentially the warmest that they've been on average over the last whatever it was, 46 years, that should be that should be of concern, I would think. But you guys let me know what you think. McKen McKenzie, I'm not I'm not hearing a ton of complaints from farmers about the crop. I'm really not. Um, and usually, usually we do, even even in good years. And if I
Corn/Soybean Shipments
SPEAKER_00feel like we're not, maybe guys are just kind of burnt out on the markets and and weather in general because we haven't had a crop scare event or or short crop in a while. I don't know.
SPEAKER_01Right. Um, so US corn, uh US corn shipments exceeded pre-report expectations last week. USDA reported that 65 million bushels of corn were inspected for export during the week ending July 2nd. The print was down 9.6% compared to the prior week, but up 5% versus the same week last year. Soybean shipments were near the upper end of expectations at 19 million bushels. The print was up 19% compared to the previous week and up 32% versus the same week last year. Wheat shipments fell below expectations at 5 million bushels. The print was down 66% from the previous week and down 74% versus the same week last year.
SPEAKER_00Corn shipments very good. I think that's the best weekly print ever. Um, U.S. corn exports, whether it's shipment sales, whatever, everything's fantastic. Soybeans, not so good. The the big question with soybeans is what are we gonna be shipping? Call it October 1st forward, October, November, December. That's gonna be the make or break. Um, and we'll have an idea of what we're gonna ship based on sales. And the sales are just not there yet, but uh they could be forthcoming. Cattle were kind of mixed yesterday.
SPEAKER_01They sure were. Live cattle saw modest gains ranging from 13 cents up to 55 cents, with the exception of the front month contract, which lost a mere 13 cents, and then feeder saw losses ranging from 13 cents down to 93 cents. Box beef prices were lower. Choice was down 59 cents at 386.48, and Select was down a buck 56 at 365.87.
SPEAKER_00The SP 500 is down marginally this morning because team USA was eliminated from the uh World Cup last night. I think that's why.
SPEAKER_01You think?
SPEAKER_00I don't know. I don't care about soccer. Um, crude oil is up 59 cents in the uh August WTI at 69.14. Have a great day, guys. We'll be back on Wednesday.