Written Commentary
The Ghost in the Machine Q2 2025
July 2, 2025
CORN
Prices ranged from $.02-$.05 higher today drawing support from the surge in wheat prices. Spot July-25 continues to lag new crop as it has slipped to an $.11 discount to Dec-25, an 11 month low. July-25 CGO wheat has jumped to a $1.41 premium to corn, the highest in 7 months. Dec-25 held below its 50 day MA resistance at $4.47 ¼ . Ethanol production slipped to 1,109 tbd, or 326 mil. gallons, down from record 329 mil. the previous week, however up 5% YOY. Production was in line with expectations. There was 111 mil. bu. of corn used in the production process, or 15.8 mil. bu. per day, above the pace needed to reach the USDA forecast of 5.50 bil. for the 3rd consecutive week. Stocks inched up to 24.1 mil. barrels, in line with expectations and just above the 23.6 mb YA. Implied gasoline demand rose 1.4% to 9.299 tbd, however was down 1% YOY. Spread trade tells us the market isn’t concerned about tight US and global supplies as demand is gradually shifting to SA origin. Brazilian crop prospects are growing despite the slow start for their 2nd crop harvest. The fund short position has likely grown to about 190k contracts entering today. Export sales on Friday are expected to range from 25-55 mil. bu.
SOYBEANS
Prices were mixed and little changed. Beans were up less than $.01 in 2 sided trade while both products were slightly lower. Spreads were mixed across the complex. July-25 beans traded to a new high for the week however held below the May high at $10.82. Nov-25 beans traded to a fresh 4 ½ month high with next resistance at $10.75 ¾. July-25 oil consolidated within yesterday’s range closing just below $.55 lb. Next support for spot meal is $278.50. Board crush margins were little changed again today with spot futures slipping $.01 ½ to $1.54 ½ bu. while new crop was unchanged at $1.98 bu. Spot margins are up about $.40 bu. from their recent low as the market works to rebuild bean oil stocks for biofuel production. The market also awaits clarity from the EPA and Trump Administration on these small refinery exemptions while monitoring trade negotiations with China. Heat will build across the WCB and plain states thru the upcoming weekend. 100+ degree temperatures are expected as far north as SD for at least a couple of days before cooling next week, possibly bringing the next round of heavy rain. As the high pressure slides off into the SE, temperatures will build in the central and ECB to the low to mid 90’s this weekend before moderating by the middle of next week. Extended forecasts continue to show above normal temps in the east, normal to below normal in the west with normal to above normal precip. across much of the continental US into late June. Brazil’s June bean exports are expected to reach 14.37 mmt, a new record high for the month and up 4% YOY. New crop prices are encouraging farmers to plant the last 5+ mil. acres with key insurance dates later this week. Export sales on Friday are expected to range from 5-20 mil. bu. for beans, 150-450k tons of meal and 5-30k tons of oil.
WHEAT
Prices ranged from $.16 higher in MGEX to $.25 better in CGO and KC. Heavy rains across the southern plains and southern Midwest threaten this year’s winter crop. Rains the past 24 hours in E. KS and N. OK will continue to slow harvest efforts while possibly posing production and quality issues for the HRW crop. July-25 CGO surged thru its 100 day MA trading to a 3 month high. Next resistance is at $5.91 ½. July-25 KC closed above its 100 day MA resistance for the first time in 3 months. A new 4 month high for July-25 MGEX with next resistance at $6.72 ¾. The USDA has raised their WW production forecast in the July production report each of the past 4 years by an average of 48 mil. bu. The recent price surge is now discounting a reversal of that trend. Production was last cut in July of 2020 also by 48 mil. bu. Although MM’s have been net buyers across the 3 classes of wheat the past 4 weeks, they still remained net short 183k contracts in the most recent CFTC-COT report. This week’s CFTC data is delayed until next Monday. Friday’s export sales are expected to reach 10-20 mil. bu.
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