Veteran grain futures traders argue that the months of July and August are the most important growing months for the majority of the U.S. corn (ZCZ25) and soybean (ZSX25) crops. This period is also important for U.S. wheat crops, as winter wheat (KEZ25) (ZWZ25) harvest has moved into full swing. To narrow down this timeframe further, the week immediately following the Fourth of July holiday tends to see existing price trends in the grain markets reversed or accelerated. And judging by price action in grain futures late last week, corn and soybean market bulls may be making a move.
Corn, Soybean Bulls See Early, Positive Signals
December corn futures prices scored a new contract low last Tuesday of $4.16 1/2 a bushel and bears were fully flexing their muscles. November soybeans also notched a two-month low in late June. However, price action in both markets showed impressive strength on Wednesday and Thursday, including technically bullish weekly high closes on Thursday. Markets were closed Friday for the Fourth of July holiday.
The bullish weekly high closes on Thursday are one chart clue that the corn and soybean futures markets have put in seasonal price bottoms. Key for the bulls will be to show good follow-through buying strength this week.
Rain Makes Grain…
Corn and soybean bulls are facing some stiff fundamental headwinds early this week.
Price-bearish soaking rains over much of the Corn Belt during the weekend have both crops looking in very good shape, and they now have good soil moisture levels in case the Corn Belt rainfall spigot closes in the coming few weeks, which some forecasters predict will occur around mid-July.
However, weather forecasts point to beneficial rains over much of the Midwest in the coming days, with seasonally warm temperatures. I live in west-central Iowa and the corn and soybean crops here have never looked better. Much of the corn crop is already nearing the seven-foot level. Corn pollination is already starting in some areas of the Corn Belt.
Price action in the grain markets this week may indeed be pivotal. How the grain futures markets finish out the trading week on Friday (prices near weekly highs or near weekly lows), may well set price trends for at least the next month, if not the rest of the summer.
A Look at the Demand Side
As U.S. corn, soybean and wheat production estimates roll in this summer and traders get a better handle on crop size, attention will turn to demand.
The USDA anticipates record U.S. corn use in the 2025-26 marketing year, which may help to offset the anticipated record U.S. corn crop. U.S. grain export demand remains a keen uncertainty in the marketplace, due to the unknowns regarding U.S. trade deals and with the U.S.-imposed deal deadline of July 9 approaching fast.
The U.S. soybean export pace did pick up in last week. USDA reported a daily sale of 226,000 MT of old-crop soybeans and 195,000 MT of soymeal, suggesting the lower prices have prompted some better demand despite South America having fresh supplies to offer the world market. USDA’s weekly export sales report showed a 15% rise in U.S. soybean sales in the latest reporting week, up 48% from the four-week average.
The recent biomass biodiesel mandate has boosted the soybean oil (ZLU25) futures market. However, price action in soybean meal (ZMU25) futures has been very lackluster and meal prices need to show better strength soon, if the soybean market is going to sustain a price uptrend. Meal prices have recently hit multi-year lows, which may prompt some bargain buying in the export markets.
U.S. Harvest Pressure May Stymie Wheat Market Bulls
With the U.S. winter wheat harvest moving into high gear, commercial hedge selling pressure may keep any gains in wheat futures prices limited in the near term.
Wheat markets in the next several weeks will likely be more impacted by price action in the corn and soybean futures markets, as both of those crops are entering their more critical growth phases.
The USDA reported last week that U.S. wheat export sales totaled 586,000 MT for 2025-26, within market expectations. U.S. wheat sales will have to improve in the coming months for futures prices to sustain uptrends. The U.S. Dollar Index ($DXY) last week fell to a 3.5-year low, which should make U.S. wheat (as well as U.S. corn and soybeans) more price-competitive for world trade.
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. For more information please view the Barchart Disclosure Policy here.
