Grain Markets: Week in Review (July 20-24)

Grains finished the week mostly higher, led by corn and soybeans. December corn gained about 4.3% and November soybeans about 4.2%, with new-crop beans notching a fresh contract high midweek before easing back in a Friday pullback; wheat was mixed, Chicago slipping while Kansas City and Minneapolis firmed. Geopolitics did much of the heavy lifting. On the Black Sea, Russia kept striking Ukrainian port infrastructure and grain vessels, including a corn ship, Ukraine hit back at Russian vessels, President Zelenskiy warned Moscow would step up attacks on the grain corridor, and Kyiv called for an emergency UN Security Council meeting. In the Persian Gulf, the conflict widened: Houthis struck two tankers and pushed the fight into the Red Sea and a second chokepoint, U.S. strikes on Iran continued, and diplomacy looked shelved until more damage is done, pressure that has crude up roughly 10% on the week and still building.

At the same time, a serious European drought deepened, with France's corn and wheat crops both deteriorating. Closer to home, the U.S. forecast turned hotter into the end of July. Extreme heat is set to peak across the Plains this weekend, with triple-digit highs, before a brief cool break early next week. Beyond that the models split: the GFS keeps it hot and dry and rebuilds the heat into early August, while the European model and some forecasters ease off after the peak and bring week-two showers back to much of the Belt. The Plains, already deep in worsening drought, are the stress core, while the moisture-rich eastern Corn Belt looks better cushioned. Day-to-day detail is in our morning weather section.

And all of it sits on a firmer foundation supply and demand foundation. The late-June Quarterly Grain Stocks report tightened old-crop supplies, and the July WASDE followed by cutting new-crop corn ending stocks to 1.79 billion bushels, below both the trade's roughly 1.90 billion estimate and June's 1.96 billion, while holding new-crop soybean stocks at 310 million even though the trade had looked for a build. That tighter balance sheet is the base this rally is building on....but can it last?

One more thing: FBN's AI Crop Price Indicator posted a new run yesterday, an independent, data-driven read on where December corn and November soybeans could be headed, built from market data, not headlines. Want to see what the model is saying? Click --> here <-- to start your 30-day free trial and see what it has to say.

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