US and the World

     July and August are very significant months for crop development within North America. It represents a time when pollination takes place in the corn crop and pod set takes place in soybeans. Adverse weather during this time can often impact the bigger crop in the field which also impacts prices. We are here now.  The crops look quite good.  The USDA NASS estimated 74% of the US corn crop look good to excellent on July 21^st, which was 7 points better than a year ago. At the same time the soybean crop was estimated to look 68% good to excellent, which was equal to last year.  On July the 11th the USDA released their latest WASDE report.

      In this report the USDA reduced the 2025/2026 US corn crop by 115 million bushels down to 15.705 billion bushels. This was based on a corn yield 181 bushels per acre.  USDA also lowered the beginning stocks for the new crop 25 million bushels to 1.34 billion bushels. The ending stocks for the 2025/2026 corn crop are now projected to be 1.66 billion bushels which is down 90 million bushels from June.  Globally, corn production was left unchanged in Brazil and Argentina at 175 MMT and 48.5 MMT respectively.

     On the soybean side of the ledger the USDA integrated its 83.4-million-acre planting estimate into the supply and demand estimates. This resulted in a 5 million bushels decline in soybean production for the current crop to 4.335 million bushels.  This was based on a soybean yield of 52.5 bushels per acre unchanged from a month ago.  Brazil and Argentinian soybean production was left unchanged at 175 MMT and 48.5 MMT respectively.  USDA also pegged US winter wheat production at 1.35 billion bushels down 3% from their June 1st forecast and down less than 1% from 2024.

                 On July 22nd corn, soybean and wheat futures were lower than the last Market Trends report.  September 2025 corn futures was at $3.99 a bushel.  Dec 2025 corn were at $4.18 bu. The November 2025 soybean futures was at $10.25 bu. The September 2025 wheat futures closed at $5.49 a bushel. The Minneapolis September 2025 wheat futures closed at $5.91 a bushel with the September 2026 contract closing at $6.04 a bushel.

     The nearby oil futures as of July 22nd closed at $64.87/barrel down vs the nearby futures recorded in the last Market Trends report of $66.50/barrel. The average price for US ethanol in the US was $2.05/gallon, higher than the $2.00/gallon recorded in the last Market Trends Report.

     The Canadian dollar noon rate on July 22nd, 2025, was .7334 US, lower vs the .7350 US reported here in the last Market Trends report. The Bank of Canada‘s lending rate remained at 2.75%.

Ontario

     In Ontario combines have been rolling through the wheat.  Conditions have been pretty good so far as of July the 22nd with good yields and quality. However, as always it continues into August and producers will be hoping for open weather to aid harvest.  Wheat harvest can be a challenge with wet weather and problems at the grading table, but so far it looks like it’s a pretty good year in Ontario for wheat.

     Winter wheat is being harvested and other crops are growing well in the field with Ontario corn being slightly ahead of schedule versus soybeans depending on where you are in the province.  However, also on July 22nd there is unfortunate drought for many parts of central and eastern Ontario.  Rain is needed now.  Widespread fungicide application will surely be happening toward the end of July and into early August.  The good weather outside the drought areas in Ontario should benefit corn pollination. The difficult planting and replanting situation in the deep southwest of Ontario has soybeans trying to catch up.  Timely rains will be good for this.

      Ontario basis levels have increased since the last Market Trends report.  Ontario corn prices in eastern Ontario have rose above US replacement price levels and cash prices above $7.00 a bushel have been garnered especially going into Quebec from Ontario.  It is all a function of localized supply and demand as these prices are more reflective of historical eastern Ontario basis behavior.  However, basis has increased slightly in corn and soybeans in other parts of the province reflecting that time of year when old crop supplies are not as plentiful.  A robust export market into the EU has been helping. Ontario wheat prices are in flux, daily market intelligence on wheat prices this time of year is a must.

      Old crop corn basis levels are $1.60 to $2.54 over the September 2025 corn futures on July 22nd across the province. New crop corn basis levels were $1.05 to $1.31 over Dec 2025 futures.   The old crop basis levels for soybeans range from $2.75 to $2.96 over the November 2025 futures. New crop soybeans range from $2.66 to $2.87 over the November 2025 futures.   Ontario SRW wheat prices are flux.  For July 2025 new crop the bid is in the $6.21 bu. range. On July 22nd the US replacement price for corn was $6.37/bushel.  You can access all these Ontario grain prices in the marketing section at http://gfo.ca/marketing/daily-commodity-report/

The Bottom Line

     We all know it’s about the weather now. However, keep in mind that we are leaning on August 1st and part of the weather story is in the rear-view mirror, that being the late spring weather story and the July weather story. There is more going on here because it is a big, big world and geopolitics are part of that.  As it is, it seems like market algorithms have all that dialed in. However, you never know.

     181 bushel per acre corn yield from the USDA looms large.  There are even private forecasters who are saying it’s much above that. However, as it is, a yield in the higher 180s will make prices go down and if the yield turns out to be in the 170s prices will go up. We are now in the twilight zone what may happen.  Daily market intelligence will remain key.

     While potential for corn yields seems stratospheric, it doesn’t seem the same for soybeans. Yes, the crop looks really good now at 68% good to excellent the best since 2020.  Needless to say, November soybeans prices are rising above both the 20 day and maybe the 100 day moving averages, so it does show some resilience.  Of course, we know that August rains do make the American soybean crop. 

     We had said before that the geopolitical aspects of grain prices seem to be dialed in to the grain trading algorithms.  That seems to be the case especially with Ukraine and Russia which continues in a hot war.  On the other hand, there may be fresh news coming from trade agreements by the American administration toward China, Indonesia and other places in the Far East. This could provide a boost do both corn and soybean exports when the announcements are made.

Commodity Specific Comments

Corn

Are there pollination issues in corn this July? It seems like there are always some pollination issues somewhere in the US corn belt but generally speaking there are no issues on July 22nd. However, the forecast is for hot and dry in another couple weeks.  It’s all a theory now. Weather can still be key with regard to forming what looks to be a record crop.

Keep in mind for market bulls, this is grasping at straws. 15.705 billion bushels of corn isn’t lying at this point. There might be a variation of the theme but we’re still looking at very big corn stocks building in the United States based on where we are now.  On the supply side, it’s true there still is some weather risk but it is declining.  This corn crop so far has been bulletproofed.

The September 2025 corn contract is currently priced at 18.75 cents lower than the December 2025 contract a bearish indication of old crop corn demand. Seasonally, we know that corn prices tend to peak in early June and bottom out in early October. The July 2025 corn futures contract is at the 21st percentile of the past five-year price distribution range.

Soybeans

We all know that soybeans are the great liars, but of course that puts us in a precarious position. Hot and dry represents a difficult scenario for soybeans. For instance, the hot part doesn’t bother soybeans as much as it does corn, a testament to all the tropical soybeans that are grown in Brazil. However, dry periods in August will affect soybean yield at the same time timely rains will do the opposite. Clearly August weather will affect the end story with regard to soybean yield in 2025. 

It’s also important to keep in mind the soybeans have their own price story when compared with corn.  For instance, soybean oil has been on a bit of a tear higher since mid-June and this has been entirely helpful to soybean prices. This is related to the supply and demand for soybean oil as we know, the long-term US biodiesel policy is structurally bullish for soybean oil prices as well as soybeans.

The August 2025 soybean contract is currently priced 7 cents above the September 2025 contract considered neutral for soybean demand.  Seasonally, soybean prices tend to peak in early July and bottom out in early October. The November 2025 soybean contract is currently at the 19th percentile of the past five-year price distribution range.

 Wheat

     It’s that time of year when hot and dry does mean something, but usually not for wheat at this stage. However, keep in mind but there’s a big difference between spring wheat and winter wheat with regard to impact. For instance, 73% of winter wheat had been harvested i