Written Commentary
OPENING COMMENTS
Macroeconomics:
Over the past 6 months the Dollar has dropped more than 10% which has not happened this quickly since 1973. Will negotiations between now and the 90-day pause deadline (July 9th) be the catalyst that reverses the dollars course higher? Or do global investors continue to doubt the US economy can outperform the rest of the world due to tariffs. If the dollar was as strong as it was at the beginning of 2025, grain prices would be in even worse shape. The dollar rebounding while the USDA raises production estimates in both the US and South America would be very bearish row crop prices. This morning the dollar spiked on news of a drop in unemployment from 4.3% to 4.1%. 147K jobs were added compared to the 111K expected, and unemployment claims came in 7,000 claims less than expected at 233K.
Ag Fundamentals:
President Trump is scheduled to speak at 7:30pm CST to folks at the Iowa State Fairgrounds later today. Hopes of a trade deal announcement might become the classic buy the rumor sell the truth trade. The rally we have seen in the past few sessions needs to be rewarded by producers looking to get new crop booked. US corn yields would reach 188 bpa if every state matches their record average yield. The USDA starting off hot this year with a 181 bu per acre estimate isn’t looking so far fetched. In fact, 184 bpa is now a very common estimate. South American corn production may simultaneously increase as the 130M MT estimate is starting to be the low side of estimate ranges. The high side being 136M MT. Ethanol production was slightly down last week, but still remains above the corn usage needed to hit the USDA’s 5.5B bushel usage estimate this year. Last week we saw news of Brazil increasing their ethanol blend from 27% to 30% and increasing their biodiesel up +1% to 15%. More corn usage in south America could be beneficial to US exports. New crop export sales for Wheat, corn and soybean meal were all better than expected. Flash sales to unknown destinations also have sparked speculation around a possible trade deal announcement.
Weather:
The next 7 days are expected to offer more rain to the US growing regions. Nearly every state will receive an inch apart from the Dakotas and the western half of the wheat belt. The drought monitor below is not showing many problem areas. Northern IL, Nebraska, South Dakota and Northern Minnesota are areas to watch, but overall wee are in good shape for this time of year.
The Next 7 Days of Rain has more than 1 inch for most of the US crop growing areas. No drought this year. After this week of precip, I think only 1 or two more rain events is all we will need for the rest of the season.
Ethanol Production was down again last week to 1.076M barrels per day (316 gallons). Despite reporting production below expectations, corn usage for ethanol is still on pace to meet and possibly exceed the current USDA estimate of 5.5 billion bu used.
Ethanol Stocks are lower as well, dropping to 24.1M barrels. Stocks today are still 500K barrels above this time last year.
Weekly Export Sales
| Sales 24/25 | Est Range | Sales 25/26 | Est Range |
Wheat | na | na | 586,000 | 200K-600K |
Corn | 532,700 | 400K-1M | 940,200 | 500K-900K |
Beans | 462,400 | 300K-700K | 239,000 | 0-300K |
Meal | 306,200 | 100K-400K | 397,400 | 0-250K |
Soyoil | 11,800 | (10K)-16K | 0 | 0-10K |
Export & World News
The USDA announced three flash sales this morning: 226K MT of soybeans to unknown, 195K MT of soybean meal to unknown, and 150K MT of corn sold to unknown. 150K of the meal will be for 25/26 otherwise everything else was old crop sales.
Daily Trading Limits: Corn $0.35 (expanded $0.55); Soybeans $0.75 (expanded $1.15); Minneapolis Wheat $0.60 (expanded $0.90); KC Wheat $0.40 (expanded $0.60); Chicago Wheat $0.40 (expanded $0.60)
Weather Outlook
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