Another week of bearish news or lack of bullish news had the markets on the run. September, December and March futures all ended the week about 25 cents lower. Coming out of the July 4^th weekend we had favorable growing conditions with several areas receiving rain that outperformed forecasts and more on the way. This coupled with President Trump announcing new tariffs had the markets gap lower on Monday and continue the selloff throughout the week. The funds ended the week short 171,287 corn contracts and short 6,816 soybean contracts.

President Trump announced that two of the US’s biggest corn buyers would face a 25% tariff imposed starting August 1st. The president believes the two countries were not removing their tariffs against US goods or making progress in negotiations. The 25% level is a starting point against South Korea and Japan (and will be adjusted upward if there is a retaliatory action taken). The form letter sent to the two nations indicated the 25% level can be reduced according to the removal of trade barriers to US goods. Japan has been the second largest destination for US corn behind Mexico while South Korea is the fourth largest importer of US corn. Combined these two countries have accounted for more than 800 million bushels this year.

On Friday the USDA released their July WASDE which was in line with analysts’ pre-report estimates. Beginning stocks were cut by 25 million bushels to 1.3 billion as an increase in old crop exports offset a reduction in feed use. New crop production was reduced by 115 million bushels due to lower planted and harvested acres.

USDA 2024/25 US Carryout (Billion Bushels)

USDA 2025 US Production (Billion Bushels)

USDA 2025/26 US Carryout (Billion Bushels)

Weekly crop conditions showed 74% of the corn crop in the Good/Excellent category, which is up 1% from last week and ahead of last year and the five-year average by 9%

Traders are going to focus on two things over the next few weeks, US Weather and Trade relations (Tariffs).

Weather can still have a negative impact on the size of this year’s crop, but it is quickly running out of time to do it. I believe the market is currently trading 185-187 bushel per acre yield, so there is a greater risk to the downside. Trade relations could be clearer in the next two weeks if President Trump sticks to his August 1^st deadline. I look for a mixed bag on this front. Some countries will work out deals with the US while others will stall and have tariffs increased or deadlines extended.

Historically the CBOT bottoms out in August/September and we grind higher after that. This year may be the exception where we set our lows in July. We are about 12 cents away from a key support level of $3.99 CZ25. I would not be surprised to see this taken out in the next week or two before we trend higher. As mentioned above, the risk of the crop getting smaller is greater than it increasing at this point.

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Last weeks USDA report was uneventful resulting in flat markets until late in the week when a warmer forecast and talks of trade with China spurred the markets. September futures ended the week 8 cents higher while December and March futures closed 10 cents higher. The funds bought back 38,000 contracts and headed into the extended weekend short 135,396 corn contracts. The funds bought 16,000 soybean contracts and are now long 51,396 contracts.

The USDA released their Quarterly stocks and Acreage report on Monday June 30^th. Corn planted area came in at 95.2 million acres. This is 5% higher than a year ago and slightly below the March estimate. Compared to a year ago, planted acreage is expected to be higher in 41 of the 48 estimated states.

USDA Planted Acreage (Million Acres)

Corn stocks on June 1 came in at 4.64 billion bushels. This was down 7% from a year ago. On farm stocks were down 16% from a year ago while off-farm stocks(elevators) were up 6% from a year ago.

USDA Quarterly Grain Stocks (Billion Bushels)

Weekly crop conditions showed 73% of the corn crop in the Good/Excellent category, which is slightly up from last week and still ahead of last year and the five-year average.

With the June report behind us traders are going to focus on US weather and forecasts over the next couple weeks as we enter the major growing cycles for corn(tasseling and pollination). The 11-15 day forecast has warmer temperatures moving up from Texas into the Plains and expanding into the Midwest.  If we were to see a ridge develop in the forecast on Monday or anytime early next week, things could get exciting on the CBOT. Until then traders are going to stick with the thought that this crop has the potential to be a big one.

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Favorable weather, weaker energy markets and political news pulled corn lower this past week. September and December futures ended the week 14 cents lower while March futures lost 15 cents. Following Fridays buying and CFTC report the funds are short 173,396 corn contracts and long 36,396 soybean contracts.

News of the US attacks in Iran did not generate the market reaction that I expected. Iran responded to the US attacks on Iranian nuclear facilities by launching missiles at U.S. bases in the Middle East. Normally, one would expect this to be bullish news for the crude oil markets, but those markets ended up lower on the week. The trade appears to have the opinion that the retaliatory strikes were just a token response and will not be enough to escalate the US involvement at this time.

There was additional news out of Washington for the bears and the bulls last week. President Trump announced he had signed a trade deal with China but provided no details about the agreement. Traders don’t know if the deal is binding or tied to Ag exports but there was a general enthusiasm that a deal being done would mean a lowering of tariffs and improved trade relations. On the flip side, President Trump announced that trade talks with Canada were cut off due to its announced digital tax on American Tech Companies. The US does significant cross-border trade in agricultural goods with Canada, especially ethanol. Look for more news to come on these relations in the next week.

The USDA will release their Quarterly stocks and Acreage report on Monday. I am looking for grain stocks to be friendly the markets as demand has been strong and I think the size of last year’s crop has been overstated. Acreage should come in line with trade estimates. Estimates for Monday’s report is listed below.

USDA Quarterly Grain Stocks (Billion Bushels)

USDA Planted Acreage (Million Acres)

Weekly crop conditions showed 70% of the corn crop in the Good/Excellent category, which is slightly down from last week but ahead of last year and the five-year average.

The markets historically don’t bottom until September, but if Monday’s report doesn’t give us anything too bearish, we could have a low in for the short term. Long term I believe new crop prices will continue to trend lower.

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Didion Weekly Market Recap

Favorable weather, lower export sales and option expiration weighed heavily on the markets last week, particularly the old crop. July futures ended the week 15 cents lower while September and December futures ended the week 3 and 2 cents lower respectively. The funds are short 194,143 corn contracts and long 48,071 soybean contracts.

Recent weather and favorable forecasts continue to build yield in the minds of the trade as rain remains stacked back-to-back over the next 10 days in the Midwest. The drought monitor continues to show improvements in drier areas as we officially enter summer. Warmer temperatures across the Midwest over the last 5 days should help improve crop conditions in Monday afternoon’s report.

Late last week the tensions in Iran had investors selling stocks and buying oil. Over the weekend the U.S. engaged in the conflict in the Middle East by dropping 14 GBU 30,000 lb. “bunker busters” from stealth B-2’s and also launched 75 precision guided Tomahawk missiles from Naval Assets in the region into Iran’s nuclear facilities at Isfahan, Natanz, and Fordow. The Fordow facility was the main target of concern given its installation deep within a mountainside making it not reachable for most military capabilities. The U.S. “bunker busters” were designed for such scenarios, and given the failed negotiations over Iran’s nuclear program, the Trump Administration made the decision to piggyback Israel’s substantial military campaign and complete the destruction of Iran’s nuclear capabilities.

Iran is OPEC’s third largest producer with roughly 3.4 million barrels of oil per day of capacity. That figure accounts for roughly 4-5% of global production. Of those 3.4 million barrels, approximately 1.7 million barrels is exported with China being a major importer of Iranian crude. Of equal concern is the Strait of Hormuz, a 21-mile-wide stretch of water between Iran and Oman that connects the Persian Gulf to the Gulf of Oman and eventually the Arabian Sea. The actual shipping lane for inbound and outbound ships is only 2-3 miles wide and yet over 20% of the global oil production passes through this lane every day. Iranian parliament has apparently voted to close the shipping lane in response to the U.S. strikes. This should send crude oil higher if maintained for any length of time.

Weekly crop conditions showed 72% of the corn crop in the Good/Excellent category, which is the same as a year ago and 5% above the five-year average. I look for conditions to improve again this week based on last week’s weather.  just below the five-year average and 3% behind last year.

Given the news around the bombings by the US over Iran, there is a lot of interest in how the markets will open Monday when US traders enter the markets.   Most analysts feel that the tensions and potential attacks have already been built into the markets, and we will see a minimal response. As of Sunday night, crude oil was up $2 while the grain markets remained flat. Historically the Crude oil and Corn markets trend the same direction so it will be interesting to see if crude can pull the markets higher in this environment. My expectations are for the markets to start the week of on the downside as crop growing conditions will trump any news out of Iran.

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Old crop corn found some support late in the week following favorable trade negotiations with China a bullish USDA report and a stronger soybean market while new crop prices continued lower. July corn ended the week 2 cents higher while September and December futures were 5 and 6 cents lower for the week. The funds went home short 167,143 corn contracts and long 52,071 soybean contracts.

Early last week there was a meeting between US and Chinese officials that appeared to be positive. A framework was put into place that will further trade and discussion between the two countries. The potential agreement that was discussed and now in the hands of President Trump and Chinese President Xi for decision had nothing to do with grain or Ag products in general. The biggest part of the agreement is that rare earth metals would be provided to the US by China and Chinese students would be able to attend US colleges. The US would collect 55% tariffs on Chinese goods while China would collect 10% tariffs on US goods. Despite no reference to Ag products, the discussions were positive and show potential to move forward.

On Thursday the USDA released their June WASDE which had very few changes from the May report. The corn 2025/26 balance sheet called for lower beginning and ending stocks. Beginning stocks were lowered by 50 million bushels based on an increase in old crop exports. No changes were made to production or new crop use categories. Ending stocks were lowered to 1.750 billion bushels. This was lower than the average pre-report estimate of 1.792 billion bushels but within the range of estimates. Global corn production increased while foreign ending stocks decreased.

USDA 2024/25 US Carryout (Billion Bushels)

USDA 2025/26 US Carryout (Billion Bushels)

USDA 2025/26 World Carryout (Million Tonnes)

Weekly crop conditions showed 71% of the corn crop in the Good/Excellent category which is just below the five-year average and 3% behind last year.

Despite a 2024/25 ending stocks number that is now below 9% stocks to use, the trade appears content with the perception that the 2025/26 US crop is going to refill the pipeline. The USDA’s June 30^th report will give us a lot more information and will most likely result in more market movement than this past week’s report. The June 30^th report will update planted acres as well as yield projections for the 2025 crop.  Will we break the recent trend and return to seasonal patterns or is this year the anomaly is TBD.

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