🌾 Daily Market Update – July 2, 2025

📊 Grain Market Summary

🌽 Corn Yield Outlook Sparks Debate

Trade chatter is intensifying around potential U.S. corn yields:

• Some analysts project yields could land 2–5% above trend, putting national averages between 184.6 and 190.1 bpa.

• Others are skeptical, citing challenges such as record acreage (95.2M acres) and lower input use.

📢 While it’s too early to draw conclusions, the conversation is gaining momentum and could influence positioning in the weeks ahead.

🌎 Global Weather Highlights

• Black Sea Region: Southern Russia remains critically dry, adding stress to wheat fields. Ukraine's conditions are mixed.

• Brazil Crop Estimates Climb on Strong Second Corn Crop

  • StoneX now pegs Brazil’s corn crop at 136.1 MMT, up from 134 MMT, with the second crop at 108.2 MMT.

  • Soybean forecast increased slightly to 168.8 MMT.

  • USDA still estimates corn production at 130 MMT—a 240M bushel gap. Updates expected next week from USDA and CONAB.

🇺🇸 U.S. Weather Overview

🌦️ Forecast Update: Scattered Showers and Persistent Heat

• Next 5 Days: Light precipitation expected—mainly scattered showers in Minnesota and Wisconsin.

• Model Split Continues:

  • Euro model favors a wetter pattern.

  • GFS model shows continued dryness in the Eastern Corn Belt.

• Temperature Trends:

  • Above-normal heat continues through the weekend.

  • The 8–14 day forecast keeps things hot, though ensemble models hint at some moderation.

🌽 Northeast Kansas Weather & Crop Snapshot

• Local Conditions: Overnight spotty rains brought modest relief to dry topsoil.

• Corn: Early-planted fields are beginning to tassel. Crops are holding up well, though light stress is visible in sandier soils.

• Soybeans: Nodulation is progressing, but weed pressure is growing under current humidity.

• Wheat Harvest: Some fields have been cut, with average to slightly below-average yields.

🌐 Market Drivers & Policy Developments

📉 Farmer Confidence Slips Amid Export Uncertainty

The Purdue/CME Ag Barometer fell to 146 in June, down 12 points from May:

• Top concern: Future of agricultural exports.

  • 46% of farmers expect trade policy to hurt farm income.

  • 27% expect a benefit.

🇨🇳 U.S.–China Trade Outlook Remains Cloudy

• Still no new-crop soybean purchases from China.

• Speculation continues around a potential U.S.-China presidential meeting later this week.

🛢️ Policy Clash Emerges Over Biofuel Tax Credit

• Debate grows over the proposed 45Z tax credit:

  • Farm groups want it limited to North American feedstocks 🌎.

  • Oil industry opposes it, warning of higher fuel prices ⛽.

  • If implemented, this could boost soybean oil demand and align with the “America First” energy agenda.

🚜 Ethanol Market Update

• Production remains strong—still near record weekly highs.

• Stocks rising, though corn usage per gallon is down due to efficiency improvements.

• Despite bullish fundamentals, futures are underperforming, possibly due to:

  • Expectations of a large new crop, and

  • A belief that efficiency gains offset rising export demand.

💵 Dollar Movement & Export Sentiment

• The U.S. dollar softened slightly, which usually supports exports, but market reaction has been muted so far.

🔭 Looking Ahead: What to Watch

• Model Trends: GFS and Euro disagreement continues. A unified shift toward dryness could trigger new buying interest.

• Thursday’s Export Sales Report: Markets are watching for any surprise demand, especially from China.

• Pre-Holiday Positioning: Expect lighter volume and volatility Thursday ahead of the July 4th market closure.

🌱 Ag Fun Fact of the Day

Soybeans are the chameleons of agriculture — used not just in animal feed, but in thousands of consumer products, including candles, crayons, car tires, and even seat cushions. Over 98% of U.S. soybeans are processed domestically.