On Tuesday at the Chicago Board of Trade, September wheat futures declined 2% to settle at $6.38 per bushel, driven by a shift in the weather outlook for the US growing regions toward wetter and milder conditions.
December corn futures fell 1.5% to $4.65 1/4 per bushel.
November soybean futures dropped 1.3% to $11.77 1/4 per bushel.
Focus on weather stabilization
This week, forecasts indicate more rainfall and cooler temperatures will sweep across the Great Plains and into the eastern Corn Belt, giving grain traders little reason to factor in additional risk premiums for futures. Charlie Sernatinger of Marex noted in a report that the overall sentiment is that last week's rains were beneficial for crops, and the outlook appears mild. The US Department of Agriculture predicts a cold front will cross the eastern Corn Belt this week, bringing relief to crops affected by drought concerns and potentially adding downward pressure across the grain complex.
Influence of declining oil prices
Weakness in crude oil prices added pressure to the Chicago Board of Trade, with the linkage to renewable fuels becoming more pronounced compared to Monday. Doug Bergman of RCM Alternatives stated in a report that the weakness in grains seems to stem primarily from spillover selling linked to oil, following comments suggesting a potential US-Iran agreement.
New sales
Following Monday's announcement, the US Department of Agriculture confirmed another flash sale of soybeans to China, adding to a series of sales reported in recent weeks. The USDA stated that 132,000 metric tons of soybeans were purchased for delivery to China in the 2026/27 marketing year. These new sales and stable crop ratings provided soybeans with more support than other grains during Tuesday's trading.
Narrowing trade deficit
The US agricultural trade deficit has narrowed significantly compared to the same period last year, but this is due to a decrease in US imports rather than an increase in exports. As of the third quarter of fiscal 2026, the trade deficit, which represents the gap between US imports and exports, stood at $15.3 billion, down 54% from the prior year. This decline is mainly attributed to reduced imports due to tariff-related controls. Jim Wiesemeyer of Ag Bull noted in a report that the trade deficit is expected to widen in the fourth fiscal quarter.
Improving farmer sentiment
Farmer sentiment turned a corner in July, with the latest Ag Economy Barometer from Purdue University and the CME Group rising 13 points to 126 compared to the previous month. This improvement was driven by farmers' more optimistic outlook on current economic conditions and their expectations for the future. However, issues affecting farmers remain prominent, with 46% of respondents citing high input costs as their biggest financial obstacle. Michael Langemeier of Purdue University's Center for Commercial Agriculture stated that the rise in Chicago Board of Trade crop futures supported the recovery in farmer sentiment.
Upcoming events
The US Energy Information Administration will release its weekly petroleum status update on Wednesday at 10:30 AM ET.
Nutrien Ltd is scheduled to report its second-quarter results after the US market close on Wednesday.
CF Industries Holdings Inc will release its second-quarter results on Wednesday at 4:30 PM ET.
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