Daily Market Cast: 7/21

Daily Commentary: Tuesday, July 21, 2026 

Transcript

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Good afternoon, everyone. Today is Tuesday, July 21st, and this is Sam with today's commentary. The grain trade is taking what you could call a breather after Monday's rally, but the market structure has not changed. Corn and soybeans, momentum softened as traders absorbed crop ratings that were better than expected, while wheat struggled to hold gains earlier in today's session, but added gains late into the close. The several markets pushing into overbought territory. Profit taking is not surprising at this juncture. So far, the selling looks more like week longs exiting than a shift in market opinion. Whether it means a domestic driver, corn is moving deeper into pollination, soybeans are entering podfill, and soil moisture is declining across the plains and western Midwest. Temperatures are expected to moderate across parts of the corn belt later this week, but the Western production region may see above normal heat persistent to August. That makes USDA's 183 bushel corn yield and 53 bushel soybean yield increasingly difficult to defend if widespread rainfall does not return. Demand is more supportive. China has continued adding new crop soybean purchases, helping push futures to new contract highs and lifting outstanding sales well above last year. Corn exports remain strong while wheat shipments continue to disappoint. Geopolitical risk cannot be ignored as well. Russia and Ukraine continue targeting port and logistics infrastructure. Investment movement through the Sea of Azus and Kerch Strait remains restricted and marine insurance costs are climbing. Finding involving the United States and Iran has supported crude oil and renewed concerns over fertilizer and transportation costs. You know, it's 50% tariff on select Canadian products adds trade uncertainty, although the ProDash exemption limits the fertilizer impact. Seasonally, late July and early August are often difficult for grain prices. This year may be different. Tightening balance sheets, Chinese demand, weather uncertainty, and unreliable Black Sea trade can limit the depth of corrections. We will say this, the market is extended, but it has not lost its bullish argument. December corn is holding near 470 after posting a fresh recovery high and leaving an open chart gap at 468 and a quarter yesterday. That gap is the first level bulls needed to defend. A closeback below it would invite a deeper correction, while renewed strength above Monday's high would keep the recent upward trend intact. USDA rated 67% of the crop good to excellent, down only one point when the trade expected a two-point decline. The rating remains above the five-year average, giving bears something to work with. There is talk of private yield models starting to surface near 189 bushels per acre, but those projections remain early and heavily dependent on weather assumptions. Demand continues to provide a firmer foundation, with new crop carryout already projected near 1.79 billion bushels. The market does not have much room for a major yield disappointment. For now, breaks toward the gap should find support unless forecasts improve materially. September corn futures settled at 452 and 34, higher by 3.25 cents. December futures finished at 475 and a quarter up two and a quarter cents. Soybeans remain the clear leader after November futures reached a new contract high near 1232. The market left an open gap at 12.04, which becomes the first downside target if additional profit taking develops. More importantly, nearby futures are challenging the earlier yearly high near 1223 and a quarter. A weekly close above that level could confirm a broader upside breakout and likely attract another round of technical buying. The demand story continues to improve. Outstanding new crop sales have reached 4.6 millimetric tons, up 147% from last year, and the strongest start in four years. China has now booked roughly 9% of the 25 millimetric ton purchase target. USDA raised soybean conditions 1.66% good to excellent, but that did little to slow the rally. Argentina reportedly imported importing pereguinian soybeans to maintain crush adds another layer of support. The caution is positioning. Index funds continue building longs, leaving the market vulnerable to sharp corrections even while the larger trend remains higher. August soybeans gave back 6.5 cents at 12.19.5. November futures finished at 12.22 and three quarters, lower by three and a half cents. Wheat continues to be the most frustrating market for the bulls. All three classes pushed to fresh recovery highs Monday, but the gains faded for winter wheat contracts as lower highs and lower lows were printed in today's session. Spring wheat, on the other hand, had conditions drop five points to 53% good to excellent, extending the move higher in today's session. That rating remains above the five-year average, while winter wheat harvest advanced to 74% complete. The demand side remains the problem. Wheat export inspections totaled only 8 million bushels, down 71% from last year and near the bottom of expectations. Until shipments improve, wheat will struggle to sustain rallies on headlines alone. The global export outlook is less comfortable. Russian new crop wheat prices rose roughly 3% last week, and analysts cut expected July exports by 25% to 1.5 million metric tons because of shipping delays. That should discourage aggressive selling, but it has not yet produced the follow-through bulls expected. Technically speaking, September Chicago reclaimed 675. Kansas City must hold above 720, and Minneapolis needs to regain $7. The spring wheat rating decline gives Minneapolis the best fundamental argument, but price still needs to prove buyers are willing to stay involved. September Chicago futures gained 4 cents at 678. September Kansas City futures gained 9.25 cents to close at 733. And September Minneapolis futures settled at 704 and a quarter up 12 cents. The turn higher in the cattle complex from yesterday's strong close was somewhat disappointing today. It wasn't a bad session, but a sharp V-bottom reversal may not be in the cards just yet, even though that type of recovery is not uncommon in this market. Box beef prices moved higher again today, which should provide some relief to packer margins, although they remain in the red. Attention now turns to Friday's monthly cattle on feed report. The average trade estimate is for cattle on feed at 102.5% of a year ago. On the surface, that number may appear bearish, but markets trade expectations, not just the data. If the report comes in below that estimate, it would likely be viewed as friendly. Considering the recent sell-off, much of the bearish outlook may already be priced into the market. At this point, we are not expecting the report to be outright bearish. If the report is neutral or friendly and cash cattle begin to stabilize, the bulls might finally get the fresh news they need to build on Monday's reversal and work this market into a more meaningful recovery. Clean hogs features are mostly higher today with nearby, nearly all contracts posting new daily highs. The session saw prices trade both above and below yesterday's range, creating some uncertainty for the weaker handed traders. Cash hogs softened slightly yesterday, which could encourage some profit taking after the recent rally. That said, the technical picture remains constructive, and as long as cash and pork values hold together, any setback may simply be viewed as a corrective pause within the current uptrend rather than the start of a large, larger move lower. August Live Cattle gained 15 cents at 226.67 and a half. August feeders lost 245 to close at 349.55. And lastly, August Lean Hogs gained 22 and a half cents to finishing at 101.50. This concludes today's commentary. We hope everyone has a great evening, and we will talk to you tomorrow.