Daily Market Cast: 7/20

Daily Commentary: Monday, July 20, 2026 

Transcript

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Good afternoon everyone. Today is Monday, July 20th, and this is Sam with today's commentary. The grand trade opened the week on firmer footing as funds followed last week's higher closes and weather forecasts kept a warmer, drier pattern in focus across the plains and western Midwest. The bigger shift, however, is that traders are no longer dealing with only one bullish story. Weather risk, improving U.S. export competitiveness, and escalating geopolitical tension are all working together. The Black Sea remains the most immediate concern. Russia and Ukraine continue targeting port and logistics infrastructure over the weekend, while extremely low water levels on the Danube are restricting another key export route. Even without fresh reports of major terminal damage, the market is becoming less comfortable viewing the region as a dependable source of cheap crane. At the same time, U.S. demand remains firm through exports, soybean crush, and ethanol production. Balance sheets are tightening enough that the market has less room for a production problem. That is why weather forecasts and the ability to hold Sunday night's gaps will matter so much this week. Corn gapped higher Sunday night as traders added weather premium and reacted to another round of confirmed export demand. The USDA reported the sale of 100,000 metric tons or roughly 3.9 million bushels of new crop corn to Colombia. Forecasts remain drier than desired across parts of the Western Corn belt, and even a national yield near 180 bushels per acre could pull new crop carry out toward 1.5 billion bushels. If exports and domestic usage continue running ahead of USDA expectations, stocks could tighten further. Ethanol production also remains a source of underlying demand. Technically, December corn needs to hold the Sunday night gap, but futures were finally able to close above the old April low near 469 and a quarter at level capped the market last week, along with major moving average resistance. Failure to hold the gap would signal that the weather rally remains vulnerable to profit taking. September corn futures gained four and three quarter cents at 449.5. December futures finished at 473 up five and a half cents. Soybeans are leading the row crops after November futures made new contract highs overnight. The market is adding premium as beans move deeper into their critical reproductive stage with hotter and drier conditions expected across the western Midwest. Demand is becoming more difficult to dismiss. The USDA confirmed a sale of 264,000 metric tons of new crop soybeans to China, equal to roughly 9.7 million bushels, along with another 110,000 tons or approximately 4 million bushels to unknown destinations. These sales add to expectations that China will secure roughly 25 million metric tons of U.S. soybeans during the 26-27 marketing year. Argentina's continued soybean imports from Paraguay to supply domestic crushing also raise questions about South American supplies. Domestic crush margins remain supportive, while tightening production estimates could move U.S. carry out closer to 200 million bushels. If November soybeans hold the Sunday night gap, the breakout could measure another 60 to 70 cents. A quick gap failure would warn the market has moved too far too fast. August soybeans closed 21.5 cents higher at 12.26. November futures finished at 12.26 and a quarter up 23 and a quarter cents. Wheat remains supported by the growing risks surrounding Black Sea exports, although prices backed away from their overnight highs. Russia and Ukraine account for nearly one-third of global wheat trade and disruptions through the Sea of Zoos, Black Sea ports, and the Danube are occurring during a critical export window. Hard red winter wheat has the strongest fundamental setup after drought reduced Southern Plains production and September Kansas City futures reached fresh two-month highs. Spring wheat also deserves attention. Northern Plains heat has been persistent, and July rainfall across spring wheat areas has been only a little more than half of normal. Crop ratings could begin slipping if that pattern continues. Funds were large buyers of soft red winter wheat last week, but they still hold in net short position. That leaves room for additional short covering if export disruptions worsen. The market now needs follow-through rather than another headline spike. Holding last week's breakout would keep the trend constructive, while that return below the gap area would suggest the geopolitical premium is beginning to fade. September Chicago closed 8.3 quarter cents lower at 674. September Kansas City futures lost 8.5 cents to close at 723 and 34. And September Minneapolis futures closed virtually unchanged at 692 and a quarter. Lastly, on to livestock, did the bears finally run out of gas? We know one day does not change a trend, but the cattle complex finished the day on a higher note with moderate triple digit gains across both the live cattle and feeder cattle pits. Most, if not all, live cattle contracts did print new lows today, meaning the pattern of lower lows and lower highs remains intact. The bulls now need to prove that they mean business by following through this week with additional gains and more importantly, by trading above previous days' highs. Friday's commitment of traders report showed managed funds liquidating some of their long positions in both live and feeder cattle. Funds and live cattle futures fell to its lowest level in six months, while feeder cattle dropped to a 20-month low. The tide may finally be starting to turn when it comes to fund liquidation, but the underlying fundamentals have not changed. Supplies of market ready cattle and feeder cattle remain historically tight. August live cattle gained 210 to close at 226.52.5, while December added 247 and a half to finish at 223 even. August feeder cattle rallied $6.05 to close at $3.52, with October feeders up $7.339.82.5 cents. It was somewhat surprising to see managed funds add to the lean hog short position. They remain just dry of a record net short, although this report only reflects positions as of Tuesday's close. Since then, the recent rally into Friday may have encouraged some short covering. Cash hogs will need to continue trending higher if August futures are to extend their rally. October lean hogs posted another new high for the move early in the session, but the bulls cannot hold those gains into the close. October finished down 22.5 cents at 87.72 and a half, while August slipped 37.5 cents to close at 101.27.5. This concludes today's commentary. We hope everyone has a great evening and we will talk to you tomorrow.