A firm tone ahead of the last trading day of the week. Will the selling vigilantes cause a retreat today?
July 2, 2026
Grain Overview
This morning’s grain trade is firmer across the board as follow-through buying from yesterday’s newfound interest to reduce shorts due to the USDA acknowledging shrinking world stocks continued. The US Corn Belt is seeing heat this week, but most interest remains in the EU, where crop losses have been reported. India is also dry, and now Ukraine has stated that its soils are drying as well. These conditions have begun to increase export interest, especially amid the recent correction in commodity values and shipping costs.
The US dollar is down this morning, throwing support into metals and indexes, as the monthly jobs number showed unemployment rising from 4.2 to 4.3 percent. Job growth came in at 57,000 versus an estimate of 113,000, and last month was revised down from 172K to 129K. This has prompted bets that an interest rate hike will not occur in September but may be delayed to December.
Yesterday’s May ethanol grind was put at 471.78 Mil Bu, with DDG production hitting 1.7 MMT. The ethanol grind is 1.34% higher than last year, with ethanol margins at 35-$0.40/gal. The May soybean crush is at 213 Mil Bu with soy oil production at 2.47 Bil pounds. Year-to-date soybean crush is at 2 Bil Bu. This reveals a crush that is 8.5% higher than last year. Spot crush margins are running at $2.81, with new crop at $ 2.40. Crush margins are now $1.30 off their highs.
The weather forecasts call for warmer-than-normal temperatures, with warmer overnight minimum temperatures also being created due to high humidity. We will have extreme heat across the central US, but records are unlikely to be set. The concern is that nighttime temperatures may produce record high lows, which will reduce ear fill and produce smaller kernels. Temperatures are anticipated to retreat slightly next week, with chances of rain creating a bearish tone to the grain trade, but large production is already priced into the June 30 lows. So will any potential setbacks be considered corrective in price?
France and Spain will continue to endure searing temperatures, with a return next week. This is going to be one of the worst European droughts on record, and there is concern that, as we showed in last week’s videos, this heat will push forward into Romania and Ukraine, impacting their corn production. There is no getting around the fact that global corn supplies are declining, which is increasing US export prospects to levels similar to or higher than last year.
Cattle Overview
Another disappointing day in cattle futures yesterday, as the board struggled to do any better than a footing near Thursday’s lows, with poor-performing closes. Box beef values softened, with the afternoon numbers showing choice off $ 1.90 and select off $1.99. The feeder index was off another $0.40 to 377.00. Encouragingly, the one-day feeder index jumped back to 374.99 on 2,260 head. Though weakening one-day numbers had been spooking the board. It was a light cash trade yesterday with north at $403, off $5, while some cash sales showed up at $255-256, also lower by $4-5. Southern live trades were quoted at $ 255, off $3.
Cattle slaughter through yesterday was 24,000 head, unchanged from last week and still 35,000 head lower than last year. The persistent weakness on the board is the fear of a similar fate for the beef trade after the July 4 week, when box beef values tumbled. The August board is carrying a $ 12-$13 discount to the current cash market, but a close on August cattle below 240 could add considerable further weakness as index funds liquidate holdings. In August feeders, a close below 360 would trigger a correction to the 345-349 range. This week’s August feeder cattle low of 360.45 needs not to be trifled with by much.
Any Questions and to inquire about Livestock Risk
Protection Insurance Call: 701-222-0221