Corn futures (ZCZ25) bulls did not have their finest hour last week. However, by the end of the week they were able to stop the bleeding and stabilize prices. Still, with technical charts leaning overall bearish and Corn Belt weather remaining price-bearish, corn bulls have their work cut out for them regarding starting a sustainable price uptrend. U.S. Corn Belt weather forecasts on Friday said corn crop weather at present is not very threatening, although there will be some net drying in the region in the coming days, especially in the southwest part of the regions.
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It’s been an interesting growing season for the U.S. corn crop. While many observers would call it a very good growing season for the crop up to this point, there have been a few hiccups recently. While there are still wide expectations of a record U.S. corn yield this year amid the good condition ratings from USDA, disease issues have been spotted in the Corn Belt. Those issues may or may not develop into more serious matters as the corn crop continues to mature in the coming weeks. And the heretofore beneficial growing weather in most of the Midwest could do an about face in the final stages of the growing season. These unknowns may be just enough to keep the corn market bears, including the big speculative funds, from piling on the short side heading into what could eventually turn out to be a bumper U.S. corn crop.
On the positive side for corn, U.S. export demand has been good lately. USDA Friday reported daily U.S. corn sales of 102,870 metric tons (MT) to Mexico and 140,000 MT to South Korea during the 2025-26 marketing year. With countries starting to finalize trade deals with the U.S. before the Aug. 1 trade deal deadline, corn market bulls are looking for export demand to continue to increase in the coming weeks. However, a huge Brazilian corn crop that is coming to market may limit significant price upside for the corn market over the next few weeks.
The technically bearish weekly low close Friday in November soybeans (ZSX25) set the table for some follow-through technical selling pressure from speculators early this week.
Soybean growing weather also leans price-bearish for this week. Thunderstorm activity in the U.S. Midwest this week will be mostly beneficial for the crop. Warm temperatures will cause quick drying between rain events, and a cool air mass is expected to come into the Midwest Thursday and Friday.
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Most soybean market watchers agree the month of August is the most important growing month for most of the U.S. crop. So far, this growing season has been mostly very good for the U.S. soybean crop, which is keeping the bulls squelched. But the crop is not yet in the bin and Midwest weather patterns may change in August.
Despite the price-bearish weather for soybeans, futures price action has been sideways and choppy, which arguably shows the bean bulls are resilient. In fact, soybean bulls can argue the price-bearish weather has been factored into prices, and that’s why price action has been sideways and choppy. This also implies there is not much downside potential left in the soybean market.
However, the soybean meal (ZMZ25) market remains sickly and will have to show some good upside price action in the coming weeks if soybeans want to have a chance to produce a sustained price uptrend. Meal may benefit in the coming weeks from speculative futures traders unwinding previously established long bean oil (ZLZ25) and short meal spreads.
More U.S. trade deals and better U.S. soybean export sales will be needed in the coming months for the soybean market to see significant price appreciation. Better U.S. trade relations with China in the coming months would likely be a solid development on better U.S. soybean sales abroad. Separately, early fall will likely see soybean price rallies limited by commercial hedge pressure as the U.S. crop harvest begins.
The winter wheat futures markets continue to struggle, but the bulls have so far successfully defended solid technical support levels just below the markets, to keep price action mostly sideways and choppy at lower price levels. However, last Friday’s technically bearish weekly low close in December soft red winter wheat futures did give the technical bears some momentum heading into this week.
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Weather conditions in winter wheat country have so far been mostly favorable for harvesting. However, wheat conditions in Canada are a concern with parts of the Canadian Prairies losing some yield potential because of dry conditions. Some rain fell recently to improve parts of the Canadian wheat crop, but overall production may be below average.
Commercial hedge pressure will likely continue to limit the upside for winter wheat futures in the coming few weeks, until harvest winds down.
The trajectory of the U.S. Dollar Index ($DXY) in the coming months will be an important outside-market element for the U.S. wheat markets. The USDX saw a solid rebound in the first half of July but has since sold off. If the greenback continues its slide that has been in place most of this year, U.S. wheat export prices will become more attractive for world trade.
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On the date of publication, Jim Wyckoff did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com
