Row-Crop Meltdown Continues as Longs Head for Exits
Futures continued their plummet toward multi-month lows at midweek with traders showing next to zero concern for supplies with mostly good weather to begin the 2026 growing season in the U.S. Any risks to global ag trade are seen as a concern for another day with nearby supplies still at a historically comfortable level, though there are warning signs of lower production to come amid the ongoing trade block through the Strait of Hormuz. On that front, Tuesday was said to have featured the heaviest fighting in the region since April as there is still no sign of a lasting agreement between the U.S. and Iran. Crude oil futures have moved higher in all three sessions this week, a bullish influence which has gone unnoticed or uncared for within the ag sector. Another sizeable weekly drawdown to U.S. crude oil reserves was also reflected in firm Treasury yields on inflation concerns with equities likely to snap a recent record-setting win streak as well.
(DTN illustration by Nick Scalise)
GENERAL COMMENTS:
July corn closed down 9 cents and December corn was down 6 3/4 cents. July soybeans closed down 11 1/4 cents and November soybeans were down 10 1/2 cents. July KC wheat closed down 10 3/4 cents, July Chicago wheat was down 15 3/4 cents, July MIAX Minneapolis wheat was down 10 3/4 cents.
The U.S. Dollar Index is up 0.32 at 99.54. The Dow Jones Industrial Average is down 461.0 points at 50,939.0. August gold is down $50.60 at $4,469.30, July silver is down $2.05 at $73.51 and July copper is down $0.1810. July crude oil is up $2.34 at $96.10, July ultra-low sulfur diesel is up $0.1468, July RBOB gasoline is down $0.0089 and July natural gas is up $0.048.
CORN:
July corn futures fell 9 cents on Wednesday, closing at $4.31 1/2. December futures were down 6 3/4 cents to $4.59 3/4. The corn market retreated for a fourth consecutive session, with July futures breaking below mid-January lows and to the lowest closing price for the contract since mid-August of 2025. U.S. reserves are expected to be north of 2 billion bushels (bb) by August with strong South American crops bolstering the market from a global perspective as well. With few concerns for the growing 2026 crop in the U.S. thus far, traders are rapidly looking to book what profit is left on long positions built through 2026. For the July contract, a break below January lows suddenly puts the contract low into consideration at $4.28 1/2. The corn market is becoming very oversold from a short-term momentum perspective.
SOYBEANS:
On Wednesday, July soybeans fell another 11 1/4 cents and closed at $11.54. November futures were down 10 1/2 cents, closing at $11.67 1/4. The soybean market continues to retreat after breaking below technical support at the 100-day moving average ($11.67 1/4) on Tuesday, the first close below the level for July futures since Feb. 3. Sluggish demand recently on the export market and a good start to the 2026 growing season have been enough incentive for traders to sell, even with record-strong crush demand amid record-high premiums. The $11.50 range will be an area to watch for support, while the sharp rise in prices in February left few clear support points beyond that, leaving a move back toward $11.00 a possibility should bearish momentum continue.
For Wednesday, soybean demand prospects remain mixed. On one hand, July board crush premiums advanced once again even with a lower day in meal futures, as soybean oil climbed on energy influence and cash soybeans fell. On the other hand, export demand is tepid, with the last month for old crop sales running 32% behind the late April to late May period in 2025. New crop sales also remain 39% lower than the same point in 2025, though sales have begun to pick up through mid- to late-May. Traders will be watching for signs of China’s intent to purchase 25 million metric tons (mmt) of U.S. soybeans in 2026-27, with certainly plenty of time left to achieve this goal.
Within the world soybean market, Brazil continues to hold a discount to U.S. offers with a record crop now hitting the market. However, this gap has narrowed through the U.S. price selloff. Argentina is in the final stages of harvesting a strong crop, though exports are expected to rise in the 2025-26 marketing year most of the crop will still go to supplying the domestic crush program in Argentina.
The DTN National Soybean Index finished Tuesday at $11.05. Wednesday’s futures close and Tuesday’s national average soybean basis of 60 cents under the July board would indicate the index on Wednesday afternoon to be near $10.94.
WHEAT:
July Kansas City wheat futures fell for a tenth straight session on Wednesday, down another 10 3/4 cents and closing at $6.24. Chicago and Minneapolis futures were also lower. The wheat market continues to be a falling knife with few signs thus far of bargain hunters willing to step in and catch it. Harvest pressure (despite a historically poor crop expected) in the U.S., and sluggish world values continue to weigh on prices. For Wednesday, support held at the 100-day moving average ($6.22) for July prices, which haven’t seen a close below this mark since mid-January.
Although the argument for declining world wheat production and supplies in late 2026 into 2027 remains valid, traders are currently unconcerned with most immediate crops expected to be decent. However, for crops planted following the onset of war in the Middle East, producers will face high costs and, in some instances, low availability of fertilizer weighing on yield outlook along with El Nino weather patterns. Production in Australia is predicted to drop 26% in 2026-27 according to ABARES this week, while Argentina’s production is expected to drop 25% as of USDA’s May WASDE forecast.
The DTN National HRW Index finished Tuesday at $5.74, while the DTN National HRS Index was $5.93. Wednesday’s futures close and Tuesday’s national average soybean basis of 61 cents under the July board for HRW, and 44 cents under the July board for HRS, would indicate the indices for Wednesday afternoon to be near $5.63 and $5.82, respectively.
Rhett Montgomery can be reached at Rhett.Montgomery@dtn.com
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