No turnaround Tuesday has yet developed in the grain trade following yesterday’s sharp price rise.
July 7, 2026
Grain Overview
The grain trade maintains a firm tone this morning, a sign that the selling vigilantes are still licking their wounds from yesterday’s sharp post-Fourth of July gains. The real test of the market’s ability to stall any rally typically comes once the day session begins, so you could say the day is still young.
Yesterday, after the close, it was announced that China booked five cargoes of US soybeans. The market will likely anticipate those showing up in this morning’s Flash Export Sales announcements, or no later than tomorrow morning, along with another decline in US crop ratings. While it was not entirely unexpected, corn ratings fell 2% to 67% good to excellent, while soybean ratings also declined 2% to 64%. It’s difficult to justify talk of record yields with those ratings and the current weather pattern heading into pollination.
Extreme heat continues to dominate western Europe’s crop-producing regions and is expected to persist for at least another 10 days, with triple-digit temperatures once again being forecast. This is occurring during the critical corn pollination window, with yields now expected to decline by 15% to 20%. There is also growing concern that Ukraine has received below-normal rainfall for its summer row crops, and additional heat is expected to build there as well, particularly across the country’s western corn-producing areas. Ukraine is expected to produce roughly 30 MMTs of corn this year, but weather over the next several weeks will be critical.
Across the central United States, forecasts continue to maintain a strong ridge of high pressure that will bring another round of heat into the Central Plains later this week. There will be some ridge-riding rainfall along the northern edge of the high-pressure dome, but the heat is becoming increasingly concerning for corn pollination, which is expected to continue through July 18. Temperatures are forecast to range from the 90s to the lower 100s across the Plains and western Midwest before moderating into the 80s and lower 90s across the central and eastern Midwest. It is the lack of meaningful rainfall from Texas north through South Dakota that remains the greatest concern for pollination across the western Corn Belt.
This Friday, the USDA will release the July WASDE supply and demand report at 11:00 a.m. CT. It will be interesting to see whether USDA lowers its corn yield estimate from 183 BPA and its soybean yield estimate from 53 BPA based on current crop conditions. Any reductions would also lower projected new crop carryout, which is already trending lower. Since USDA generally prefers to make adjustments gradually, any yield reduction in this report would suggest there is growing concern behind the scenes that total carryout is beginning to roll over from last year’s levels.
Cattle Overview
Yesterday, the cattle market had a rough opening, with feeder cattle tumbling from a nearly steady start to a $5.00 loss within the first minute of trading. The market then spent the bulk of the day recovering, ending the session higher, but with both live and feeder cattle closing only slightly above their day session opening prices. Technically, it was still a lower low and a lower high with an unimpressive close, leaving the cattle market with a bad taste while large discounts to the cash market remain.
The cash feeder index slipped just $0.14 and now stands at $371.11. The one day feeder index initially spooked the market, coming in at $354.29 on 1,559 head. However, given the light holiday volume, the market quickly discounted that reading and is now waiting to see today’s response. Boxed beef values weakened again, with Choice down $0.59 to $386.48, while Select declined $1.56 to $365.87. Packer margins continue to show losses near $300 per head, not including byproducts, and packers are unlikely to become aggressive bidders until possibly Friday afternoon. A softer cash trade remains the bias following the holiday restocking period.
On the charts, August live cattle have trendline support drawn from the March and June lows, which comes in today between 237.50 and 237.80. Meanwhile, a close above yesterday’s high of 240.55 is needed to break the current downward momentum. August feeder cattle face resistance at the important 20 day moving average on the continuation chart, which comes in today at 363.24 and still maintains a positive slope. That moving average will begin to turn lower by the end of the week if August feeder cattle remain below 363. Meanwhile, yesterday’s low at 356.62 becomes an important technical reference point. Given the strength of yesterday’s recovery to a nearly unchanged close, that low now needs to hold, especially with August feeder cattle continuing to trade at a substantial discount to the cash feeder index near 371.
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