Grain and Soy Markets are Firmer Friday, Led by Surging Bean Oil

CME GLOBEX RECAP:

December corn is up 1 1/2, November soybeans are up 3 1/2, September KC wheat is up 8 cents, Sep Chicago wheat is up 4 1/2 cents, and MIAX Sep Minneapolis wheat is up 3 1/2 cents.

OUTSIDE MARKETS:

The Dow Jones Industrials Index fell 105 points on Thursday and Dow futures are down 350 points early Friday . August crude oil futures are up $1.87 per barrel. The U.S. Dollar Index is up .068 and August gold is down $19.50 an ounce.

CORN:

Corn futures are slightly higher early Friday. Weather and ongoing geopolitical conflicts continue to drive markets. Weather in the U.S. features a break in the heat after the weekend and better rain chances for the eastern Midwest next week. However, the western Plains and northwestern corn areas will continue to see a mostly warm and dry pattern for the next few weeks. In Europe, the heatwave will persist and yield projections are falling. The French farm ministry revealed another 6- point drop in good-to-excellent ratings at just 41%. While the July WASDE pegged the EU corn crop at 53.8 million metric tons (mmt), private estimates are seeing the potential for the crop to fall in a range of 48 mmt to 52 mmt, with the lower end of that range likely leading to the need for substantial corn imports. U.S. corn export demand continues to outpace expectations with commitments to date at 3.397 billion bushels (bb) already — well above the USDA projection. It is likely USDA will need to revise exports higher by 75 million bushels (mb) to 100 mb in future reports. Currently, while U.S. corn is very competitive to Brazil corn, Argentine offers are reported to be offered at a 25- to 30-cent discount to Gulf corn. On the domestic side, ethanol production slipped again last week to just 1.04 million barrels per day. Corn is getting a boost from the slowing exports out of both Russia and Ukraine from damage to vessels and port structures. DTN’s National Corn Index closed at $4.19 with a corn basis of 29 under the September futures contract.

SOYBEANS:

Bean oil futures are surging early Friday, dragging soybeans modestly higher as well. Soybean meal, following three consecutive higher closes, is taking a breather. After four straight days of China soy purchases, the past two days have seen no additional sales despite many rumors to the contrary. Traders will be watching for additional sales Friday morning. Bean oil is rising on sharply higher biofuel demand and support coming from the EU heat wave potential to cut oilseed production. In addition, the 25% tariff on Brazil threatens tallow imports from there which could lead to additional bean oil usage in biofuels. Soybeans corrected on Thursday after rising above $12, which seems to be a solid resistance level which we are testing again. Traders are expecting both corn and soy conditions to fall on Monday’s crop progress update due to the searing heat, especially in the north and west. Traders will be watching closely U.S. weather for late July and especially early August. On a positive note, new-crop soy sales last week jumped to 65 mb. So far, the 169 mb of new-crop sales are 82 mb higher than a year ago. There are also sales of just over 85 mb to unknown destinations with most of that likely to be switched to China. While U.S. soybeans are very competitive, Brazil soybeans are modestly cheaper. November soybeans are still overbought, but the chart still suggests a bull flag pattern. DTN’s National Soybean Index closed at $11.59 with a soybean basis of 43 under the August 2026 futures. Friday morning, USDA reported private export sales of 340,000 metric tons (mt) of soybeans to China for delivery during the 2026-27 marketing year; 256,634 mt of soybeans to Mexico for delivery during the 2026-27 marketing year; and 110,000 mt of soybeans to unknown destinations for delivery during the 2026-27 marketing year.

WHEAT:

Following Thursday’s one-day correction, wheat markets have resumed their upward momentum. There is concern over the slowdown in export offers and exports from both the Sea of Azov and Black Sea due to constant drone and missile strikes between Russia and Ukraine. Paris milling wheat futures are also back up early Friday. U.S. wheat export demand was weak with just 8.6 mb sold last week and commitments to date at 233 mb, down 23% from a year ago. Traders will continue to keep an eye on developments in the Russia-Ukraine war which will impact wheat. The Drought Monitor on Thursday revealed 48% of U.S. wheat area is embroiled in some form of drought — up one percentage point from last week. Funds are thought to have cut their net Chicago wheat short in half recently, with a net short of an estimated 35,000 contracts. Wheat is still in the overbought zone. DTN’s National HRW Index closed at $6.62 and 58 under the September futures board.

Dana Mantini can be reached at Dana.Mantini@dtn.com