Grain Markets and Other Stuff

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🌽📉 A new report warns the US could lose around 30 million corn acres by 2050. Weak feed demand and an ethanol blend rate stuck at 10% are largely to blame.

⛽🚗 If the ethanol blend rate doesn't increase, the US stands to lose 6.6 billion gallons of ethanol demand by 2050 as overall gasoline use declines. The Senate is now preparing to vote on E15 legislation after the House narrowly passed a similar bill in May.

📊🌾 S&P Global Energy completed the study, and one US farmer summed it up simply: too much supply chasing too little demand. See graphics from the report below, and click the link to view the full report.

🌪️⚠️ Severe weather moved through parts of the Midwest last night, with tornadoes confirmed near Harpers Ferry, IA and Charleston, IL. Surrounding areas also experienced heavy winds and hail.

🌧️🗺️ A band stretching from central Iowa through central Illinois and into Indiana picked up 1"–3" of rain in the 24 hours ended at midnight. See rain maps below.

🫘🦠 Excessive rainfall across the Midwest and Delta has led to soybean disease pressure, including Rhizoctonia and Pythium. Parts of Missouri, Arkansas, Indiana, Tennessee, and other states have seen over 8" of rain in the last 30 days.

📈🌾 Grain markets finished higher on Wednesday, with wheat futures leading the charge. The Jul26 HRW contract gained nearly 19 cents to close near $6.53/bu, while Dec26 corn gained more than 6 cents to close near $4.49/bu.

🇨🇳🫘 Rumors of Chinese interest in US grains helped support Wednesday's rally. USDA confirmed a flash sale of 372,000 metric tons of soybeans to unknown destinations, which many see as a possible confirmation of that Chinese demand.

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🌱 Soybeans lead on China optimism
Soybean futures rallied Tuesday, with Nov ’26 up ~12¢ to ~$11.47 (two-week high) amid rumors China may return to the U.S. market. Optimism was also fueled by a potential September visit from Xi Jinping to Washington. Corn futures were mixed, pressured by weaker crude and favorable weather, while Chicago wheat rose on short-covering and technical buying; Kansas City wheat slipped.
🌎 USMCA talks add uncertainty to trade outlook
U.S. and Mexican officials are meeting in Washington this week to negotiate the future of USMCA, focusing on agriculture and energy. Tensions rose after President Trump संकेत he may not renew the deal. Mexico and Canada accounted for $58.6B in U.S. ag exports in 2025 (over one-third of the total), making the outcome critical—especially as China remains an inconsistent buyer. Another round of talks is set for mid-July in Mexico City.
🌧️ Weather mostly favorable, with storm risks
The Corn Belt is expected to see widespread rainfall over the next 5–7 days, supporting crop development. However, heavier totals in parts of MO, IL, KY, IA, and IN could cause localized flooding. Severe storms are possible today (damaging winds, hail, tornado risk), while cooler-than-normal temps are expected over the next 6–10 days.
⛽ Biofuels seen as key to demand growth
A study from S&P Global Energy highlights ethanol demand as the primary driver of corn usage growth (≈83% since 2000). Expanding E15 nationwide is viewed as the easiest path to boost demand, though Senate resistance remains. Without stronger biofuel demand, the report warns of a long-term oversupply in U.S. agriculture.
🌽 Acreage outlook edges higher
S&P Global Commodity Insights raised its 2026 acreage forecasts: corn at 96M acres (+800K vs. prior) and soybeans at 85.3M (+300K). That compares to 95.2M corn and 83.4M soybean acres last year. USDA last pegged 2026 acreage at 95.3M (corn) and 84.7M (beans), with updated figures due June 30.

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🌽 Crop Conditions & Harvest Progress
US crop conditions improved modestly last week. Corn ratings rose to 68% good-to-excellent, while soybeans increased to 66%, both slightly above average. Spring wheat saw a stronger jump to 55%, now above normal levels. Winter wheat improved to 27%, though it remains historically weak for this time of year. Harvest is moving quickly, with 25% complete—well ahead of both last week and last year’s pace.
📈 Markets Rally on Iran Deal Hopes
Equity markets surged Monday on news of a preliminary US-Iran peace deal. The Dow hit a record high (+0.9%), while the S&P 500 (+1.7%) and Nasdaq (+3.1%) posted strong gains. Optimism around easing inflation and lower interest rate pressure drove the rally. Crude oil fell 4.8% to $80.75, though prices remain significantly higher year-over-year. Even if the Strait of Hormuz reopens soon, lingering uncertainty and congestion could delay a full return to normal shipping.
🚢 Fertilizer Shipments Still Constrained
Fertilizer logistics remain tight despite the potential reopening of the Strait. Shipowners are cautious, and fertilizer cargo is being deprioritized behind energy shipments. A backlog of vessels—including 40+ fertilizer ships—continues to clog the route, with flows still down roughly 90% since the conflict began. While prices have eased مؤخراً, US fertilizer costs remain elevated versus last year.
🛢️ NOPA Crush Mixed but Historically Strong
NOPA reported a May soybean crush of 208.8 million bushels—down slightly from April but still a record for the month and up 8.3% year-over-year. The decline was tied to seasonal maintenance downtime. Soybean oil stocks dropped sharply to 1.74 billion pounds, a five-month low and below expectations, signaling tighter near-term supply.
🚢 Export Demand Remains Solid
US corn export inspections fell to 1.6 mmt but remain robust overall. Soybean shipments were strong at 522,687 mt, up sharply week-over-week and more than doubling last year’s pace, though China accounted for just 26%. Wheat exports disappointed at 334,292 mt, trailing expectations and running below last year.
🐛 Screwworm Outbreak Expands, Supports Cattle
The New World screwworm outbreak has spread into west-central Texas, with cases now confirmed across multiple counties and species. Containment challenges persist due to limited sterile fly production, raising concern about further spread. The situation is indirectly supporting cattle prices, as movement restrictions tighten already constrained supply.

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🌍 Geopolitics
🤝 The U.S. and Iran reached a tentative deal to end the war. The agreement includes releasing $25B in assets and lifting oil sanctions, while Iran commits to no nuclear weapons.
🚢 Iran will reopen the Strait of Hormuz within 30 days, and the U.S. will lift its naval blockade. More details are expected in follow-up talks, with the deal set to be signed Friday.
🌽 Grain Markets
🟡 Soybeans slipped (Nov ’26: $11.32, -2¢) under pressure from good weather and weaker crude.
🌽 Corn rebounded late (Dec ’26: ~$4.40, +1¢) but still faces headwinds from energy markets, favorable weather, and big South American crop expectations.
🌾 Wheat also moved lower on ample global supplies.
🌦️ Weather
⛈️ Severe storms swept the Corn Belt over the weekend, bringing heavy rain, damaging winds, and tornadoes. Some areas saw flooding.
🌡️ Temps stay above normal this week (not extreme), with more scattered rain ahead—heaviest in central and eastern areas. Overall tone remains bearish for grains.
📊 Funds (CFTC)
🐻 Funds turned net short corn (sold 121k contracts), the largest sell-off since May ’25.
🌱 Soybean longs shrank (sold 58k), now the smallest since February.
🌾 Wheat also saw selling (23k contracts).
🥩 Cattle
🏭 JBS is closing plants in Pennsylvania and Memphis, shifting cattle elsewhere.
🐄 With the herd at a 75-year low, tight supplies are driving record cattle prices and heavy packer losses.
⚖️ Short term: too much capacity vs. cattle. Long term: less capacity is negative for the industry.

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🌽 USDA Report: Nothing to Get Excited About
The latest USDA report was largely as expected—minimal changes to U.S. stocks and only modest tweaks on demand. South American production was revised higher, keeping global corn supplies comfortable. Overall reaction: underwhelmed 😐
📉 Grain Markets Slip
Soybeans, corn, and wheat all moved lower. Favorable weather 🌦️, weak crude oil 🛢️, and ample supply expectations kept pressure on prices.
🌧️ Weather: Mixed Bag
Rain helped improve drought conditions across parts of the Corn Belt, but dryness worsened in northern Minnesota and remains widespread in the High Plains. Still a split story 🌦️➡️🌵
🛢️ Oil Drops on Peace Hopes
Crude fell over 2% as optimism builds around a potential end to the war, but uncertainty remains. Meanwhile, the prolonged conflict continues to fuel inflation pressures 📉➡️📈
🚢 Export Snapshot
Corn sales improved, soybeans disappointed, and wheat exceeded expectations. Notably, China is still absent from new-crop soybean buying, with a large share of sales sitting in “unknown” destinations 👀