Daily Market Cast: 7/28

Daily Commentary: Tuesday, July 28, 2026 

Transcript

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Hey everyone, this is Allison giving you today's Seely Gray Market commentary for Tuesday, July 28th. And after starting the week under some pressure, markets found some footing today with a turnaround Tuesday across the board. Corn, soybeans, wheat, livestock all moved higher as buyers step back into the market. And first off, no, we do not know if the top is in. I think there was a lot of fear in the market yesterday with the turn that we have, but we don't play that game. We're not going to promise $6 corn and we're not going to fear monger by predicting $350 corn. Our job is not to make the boldest prediction in the room, it's to understand the risks on both sides of the market and help producers make some disciplined decisions with the information we have available today. So what made markets turn? Well, Monday afternoon's crop condition report gave the trade plenty to talk about. Corn conditions fell four percentage points to 63% good to excellent compared with 73% last year. Soybean conditions dropped three points to 63% compared to 70% last year. And spring weed actually held steady at 53% good to excellent, although we did see conditions very sharply by state. And the moisture numbers in yesterday's report may even be more important as the crops move through grain fill. Subsoil moisture was rated short to very short across 48% of North Dakota, 74% of South Dakota, 72% of Nebraska, and 42% of Minnesota. And nationally, 45% of subsoil moisture was short to very short, which was up five points in just one week and well above the 27% reported at this time last year. And corn's already 78% silked, while 47% of soybeans are setting pods, meaning that these crops need some moisture now. So some of today's strength was likely corrective following Monday's losses, but declining crop ratings, shrinking moisture reserves, and an oncertain forecast gave traders a reason to reconsider pushing prices lower like they did yesterday. And of course, one positive session does not mean the trend has changed. Just like yesterday's big sell-off doesn't mean the trends change. And we have to respect these big, broader moves. Yesterday was a broad sell-off. Today we're seeing some broad strength, and that's worth respecting. So now the question is whether the turnaround Tuesday we're seeing has enough behind it to carry us through the rest of the week. But corn futures stabilized after Monday's sharp sell-off, um, helping determine yesterday's break, possibly just a healthy correction rather than the end of the rally. But the four-point decline in condition ratings last week was also historically significant for corn. It was the largest weekly drop since June of 2023, the largest July decline since 2012, and the largest decline for this particular week since 2007. So that confirms the heat has reduced yield potential, particularly across the Western Corn Belt. Strong crops in Iowa, Illinois will help, but the USD's 183 bushel per acre yield estimate is becoming more difficult to defend, especially if we see these weekend rains disappoint. And demand was also another supportive factor today. The USD confirmed a corn export sale of over 197,000 metric tons to on-known destinations. So the potential for declining yields and seeing some export demand on breaks is definitely helping keep this market supported. December corn has an important level of support near 468, the convergence of last week's gap and the 200-day moving average. A failure there could ignite some additional selling pressure, but so far we're holding it pretty good here. December actually settled 6.5 cents higher today at 480.5. September close at 458.5, 6.3 quarter cents higher. And soybeans also stabilized after yesterday's sharp break. National soybean conditions fell three points last week to 63% good to excellent. Minnesota and Iowa continue to hold strong at 78%, but conditions fall off pretty quickly moving further west. Nebraska was rated 61% good to excellent, South Dakota 52%, North Dakota, only 46%. North Dakota also had 41% of its crop rated fare, leaving a large amount of acreage here sitting on the fence. So timely rain could stabilize it. Well, if we see another hot, dry stretch, we could see it push conditions lower here in a hurry. And the crop is moving quickly. Minnesota reached 61%, North Dakota 46%, both well ahead of normal. And August is always critical for soybean yields. But with pod development already running ahead of schedule, the crop needs some moisture now. Again, so the next few forecast updates will likely determine whether recovery has some staying power. And China also gave the soybean market something to talk about today. Sinno Grain will be auctioning off 504,000 metric tons, so roughly 18.5 million bushels of soybean reserves on Friday. And this is going to be its largest sale of this type since January. So in the short term, releasing reserves could reduce some immediate import needs, but longer term, it's making room for additional U.S. supplies, and that is supportive. September soybeans did gain a nickel closing at 12.04 and three-quarters. November closed at 1220, 6.25 cents higher. And we'd missed out on most of the turnaround Tuesday excitement. Trading mixed in today's session. Spring week conditions held steady at 53% good to excellent, but that on change number hides some sharp deteriorations across the Dakotas. Minnesota only slipped one point to 88% good to excellent, while North Dakota fell six points to 62%, and South Dakota seeing the largest decline, dropping 15 points to only 27% good to excellent. Montana though did improve 18 points to 43%, while Washington and Idaho also saw some slight improvements. And in the end, we just saw Montana's improvement offset the losses in the Dakota. So that kept conditions steady. However, the moisture numbers here raise questions about how this crop is finishing. Subsoil moisture was rated short to very short across 48% in North Dakota, 74% of South Dakota, and 42% of Minnesota. And Montana's soil moisture was also 72% short to very short, despite the improvement in crop rating. So a dry finish can still reduce test weight and final yields, even if the crop looks strong earlier in the season. And with harvest moving north year over the next couple of weeks, the market should soon get a clearer look at what the yields actually are looking like. We did see September Chicago wheat and two and a half cents higher at 662.5. September KC closed at 726.25 down two and three quarter cents. And September Minneapolis finished at 702.5, 3.3 quarter cents lower. And it was a classic turnaround Tuesday in livestock picks too. The deferred feeder cattle contracts gap lower this morning, but that was short-lived. Bulls quickly stepped back in and bought the break. So for the moment, the market appears to have found price levels that compensate for the reopening of the Mexican border. And moving forward, it'll depend on the actual number of cattle that enter the country. No one knows for sure how many will cross into the U.S. during the early stages, which will likely keep the deferred contracts on their toes. Most live cattle contracts printed new highs for the week following yesterday's sharp break. And this is very encouraging for the Bulls case. What would really give the Bulls an edge is if the market can close above last week's highs. Prices still have room to rally, as those highs are roughly $5 above today's closing prices. Beef cutouts were higher today, which could help stabilize some cash pricing this week. Cash will have to stop moving lower if nearby futures are going to end their free fall. And we also heard today that Packers plan to start discounting heavier cattle, which is not a friendly sign for the cash trade. Packer margins have improved from a week ago, but they remain in the red. Cash cattle could trade at least steady this week. August live cattle gained $2.25, closing at $227.47.5, while December added $3.90 to settle at $2.21.30. August feeders were up over $4 today, closing at $343.075. November feeders lost $1.225, finishing at $3.19.80. This spread between the front and deferred contracts could continue to widen just as we move into this reopening of the border. And one supportive long-term fundamental is that beef cow herd does remain 1% below a year ago. And the 2026 calf crop is estimated to be 2% smaller than last year. So the U.S. beef herd is still not growing. And lean hog contracts were all higher on the day with the deferred contracts posting triple digit gains. And while the nearby months manage only modest advances, this type of action is known as bear spreading, which is generally not considered a bullish signal for prices. Slaughter weights declined two pounds last week, but they are still running six pounds above Urigo levels. Friday's cold storage report was also not friendly for the hog market with pork stocks sitting 9% above Urugal levels. So August lean hogs did gain 12.5 cents, closing at 103.10, while December advanced $1.125, finishing at 79.675. So again, if you have any questions, as always, feel free to reach out. Otherwise, have a great night. Stay cool. We'll talk to you again tomorrow.