Daily Market Cast: 7/27

Daily Commentary: Monday, July 27, 2026 

Transcript

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Hey everyone, this is Allison giving you today's Siddley Grain Market commentary for Monday, July 27th. And it sure was an ugly sea of red across the board here to start the week, and quite different than last week. Last week, you know, the Bulls couldn't get a much better situation. We saw multi-year highs spread across the board, and really all three coming together with war, weather, worry. We talked about it last week, and all of them lined up in the bulls' favor. Now we're starting the week with those stories changing. War has cooled, weather's no longer a one-way story. Forecasts are actually looking for some additional rain chances here later in the week, but we're still expecting them to be highly scattered with triple-digit heat, warm overnight temperatures continuing across the plains. So the weather premium hasn't exactly disappeared, but it's simply becoming harder to justify at last week's levels. And then, of course, there's worry. Last week's commitment of traders report confirmed the funds aggressively chased the rally, adding nearly 50,000 contracts in both corn and soybeans, and continuing to build their um long positions in wheat. So after that kind of buying, today's concern shifts from the fear of missing out on the rally to whether the funds have decided to protect profits. So obviously, last week's um move was justified given what we knew then, but it's still gonna be a question now of whether those three same things still have enough to keep the rally going or if the market's gonna start looking for a new catalyst. And based on what we saw today, we might be looking for the next big headline. But corn finally blinked after Friday's push to 492, leaving many wondering if this was the retest. If it's already done, retesting that may hide in your 506. We didn't quite get there, so that as many really questioning what the size of the crop is. Well, the USD and everyone else still has a long way to go before answering that. And while the spotlight has been on dry conditions across North Dakota, South Dakota, Minnesota, Nebraska, Northwestern Iowa, another factor may prove just as important, and that is warm overnight temperatures. Many areas have really struggled to cool below 70 degrees at night, just adding stress that won't fully show up until those combines roll. In fact, last night I was up at 11 o'clock and it was still 84 degrees here in Ada. So those five regions do account for roughly 35% of US corn production, meaning a 5% yield loss would alone um trim the national yield by about 1.6 bushels per acre and reduce ending stocks by roughly 140 million bushels. But the opposite is also true. If the better producing areas offset those losses, ending stocks can change in a hurry. So the June 30th low still looks like the seasonal bottom, but the market's next move will depend far more on yield than acres. And that story is still being written. So September corn did close 12.5 cents lower at 451 and three-quarters. December ended at 474, 13.5 cents lower. And soybeans gave back a large chunk of last week's rally with November futures dropping more than 40 cents during this session, just reducing risk here to begin the week. But the break came despite the USD announcing another 250,000 microtons of export sales this morning, including 132 to China and 126,000 to onknown destinations. So at least demand continues to emerge when prices do pull back. But just like corn, soybean production remains far from certain. And the driest areas do remain concentrated across North Dakota, South Dakota, Minnesota, Nebraska, Northwest Iowa, a region that's representing roughly a third of U.S. soybean acreage. So August remains the critical month here for soybean yield development, and much of that crop still needs some favorable weather. So just for perspective, this broader five-state region, if it were to average 50 bushels per acre instead of the USD's current national yield assumption of 53, the production loss could exceed 100 million bushels. So with the USD currently projecting any size of 310 million bushels, that could theoretically pull carry out near 200 million if demand remained unchanged. So a balance sheet that tight would certainly provide some underlying support here for the futures market. And honestly, up until today, it looks like all pullbacks have been being bought, and we've seen some good underlying strength across the soy complex. But from a technical standpoint, September soybeans are um nearing last Sunday's gap, which would get filled at $11.93.5. November futures have the same type of gap left from last um Sunday's open at 12.03. So those are just some near-term um levels of support that we're watching. September futures ended 40 and a half cents lower today at 11.99 and three quarters. November ended at 12.13 and three quarters, 39 and 3 quarter cents lower. And we traded lower across all three exchanges today. Double digit losses hit Chicago, Casey Wheat late in this session. While Minneapolis actually managed to limit its decline just over concerns remaining over hot, dry conditions across the Red River Valley and of course northern uh Minnesota parts of North Dakota as well. And the hot, dry stretch across the eastern Red River Valley in Minnesota could still reduce spring wheat yields, uh, particularly if the crop finishes as the crop finishes filling here. North Dakota and Minnesota account for roughly 60% of U.S. spring wheat acreage, so even a modest yield reduction could remove some meaningful number of bushels in an already tight-looking crop. And spring wheat held together better than the other wheat exchanges today, just suggesting that the market is beginning to risk back that risk. We'll have crop conditions this afternoon. Um, and even with last week's crops, we were finding nearly on-change deals from last year. It seems like there is going to be some weather premium traders holding on to some risk here, especially as we look into harvest over the next couple of weeks. September Chicago we closed 18 cents lower at 660. September Casey ended at 729, 16 and a quarter cents lower, and September Minneapolis ended eight cents lower at 706 and a quarter. And we believe that everyone in the cattle business knew that at some point the Mexican border would reopen to allow feeder cattle back into the United States. And that announcement came after the market closed on Friday. USD plans to reopen two of the lesser used ports by the end of August, which should make it easier to implement and monitor the required new world screw worm protocols. And once those procedures are operating smoothly, additional ports are expected to come back online. So the announcement caught the futures market off guard, but the negative reaction was not a surprise. Markets often overreact to major news events, and this sell-off could prove to be just another example. And over time, the market will have to find new balance as imports gradually resume. So before the border closure, roughly 100,000 head of Mexican cattle were entering the United States each month. And those cattle filled a need in the supply chain. And the market will now have to determine what price level is attractive enough to encourage those cattle cattle to flow north again. So, in our opinion, imports are unlikely to return to previous levels overnight. It will likely take several months to rebuild shipments and possibly years before imports consistently approach 100,000 head per month pace seen before the closure. So while today's price action is focused on the reopening announcement, the longer-term fundamentals have not dramatically changed. The U.S. cattle herd remains historically tight and rebuilding supplies will still take time. And as the initial shock fades, the market will likely shift its attention back to cash trade, packer margins, beef demand, and the pace at which Mexican cattle actually began crossing the border. August live cattle were down $1.85, closing at $225.225. October was off $3.725, closing at $218.775. August was the only month that held last week's lows. August feeders were off $7.7.5, closing at $3.38.25. October was down the daily limit of $10.25, closing at $3.25.25. All months after October were down the daily limit, which will cause deferred markets to gap lower once again. So lean hog markets finished with modest triple-digit losses in most contracts, with the exception of the nearby August contract, which held up better. The sharp break in the cow complex offered little support. Fun buying in hogs slowed while heavy selling pressure just continued in cattle. So hog supplies remain ample, and after mid-August, production should begin following its normal seasonal increase. The futures market has already been pricing in that expected rise in supplies. So question is not whether larger production is coming, but whether the market has actually discounted it. Over the next several weeks, cash prices, pork demand, carcass values will determine if current futures prices are in line with seasonal fundamentals. Until there is evidence of stronger demand or lighter than expected supplies, rallies just may continue to attract selling pressure as traders look ahead to the larger fall production levels. So August hogs were up 12 and a half cents, closing at 102.97.5. October was off $1.22.5 closing at $87.80. So again, if you have any questions, feel free to reach out. Otherwise, have a great night. We'll talk to you again tomorrow.