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It was nothing less than a brutal week for the grain and soy markets last week, with July corn hitting contract lows and soybeans and wheat at multi-month lows. Favorable early growing weather was a spark, but fund liquidation was the fuel as Commitments of Traders data from the Commodity Futures Trading Commission showed large speculators exiting long positions built up in the earlier days of the Iran war en masse.
The Friday report, which reflected positions as of last Tuesday, marked the biggest weekly bear move on record for Chicago SRW wheat futures and options, according to Barchart. The data showed managed money adding 39165 contracts to their net short at 57,781 contracts. Kansas City HRW wheat futures and options saw speculators reduce their net long position by 13, 393 contracts to 13,477 contracts.
Ole Hansen, head of global commodity research at Saxo Bank, noted that since hitting a four-year high last month, the combined net long across 13 major agricultural futures contracts has almost halved, driven primarily by a two-thirds reduction in bullish positions across corn, soybeans, and wheat, led by corn. After reaching a two-and-a-half-year high last month, the Bloomberg Grains Index has fallen around 12% amid incoming harvest pressure on wheat and generally favorable US growing conditions that have improved production prospects for both corn and soybeans, he said.
The selloff has left markets technically oversold. Corn and wheat futures saw a dead-cat bounce in Monday’s session. Bulls will need to see some followthrough buying early this week to build hopes for a near-term bottom.
Crop conditions: No major surprises jumped out of Monday afternoon’s crop progress and conditions data, which showed just 3% of the corn crop yet to be planted as of Sunday, while soybean planting was pegged at 92% complete.
- Corn rated “good” to “excellent” was unchanged at 67%. Analysts surveyed by Bloomerg had expected the ratings to tick up a percentage point to 68%.The percentage of corn rated good declined 2 percentage points to 55%, offset by a 2 percentage point rise in the excellent rating to 12%. The Pro Farmer Crop Condition Index (on a scale of 0 to 500, with 500 equaling perfect) edged up to 373.41 from 371.33 a week earlier.
- Soybeans rated good to excellent totaled 65%, down a percentage point from last week and short of the 67% expected by analysts. The soybean condition rating fell slightly to 367.88 from 368.10. See all of this week’s CCI ratings here.
- Winter wheat rated good to excellent declined a percentage point to 25% from 26% a week earlier. Harvest was 11% complete, a percentage point ahead of expectations.
- Spring wheat rated good to excellent rose to 52% from 47% a week earlier, topping expectations for 49%.
Screwworm tally: USDA confirmed three more cases of New World screwworm in the U.S. on Monday: a calf in Lasalle County, Texas; a goat in Gillespie County, Texas; and a dog in Lea County, New Mexico. The dog was originally announced by USDA as occurring in Andrews County, Texas.
Beef price worries: USDA Secretary Brooke Rollins told Politico that it isn’t clear how the New World screwworm outbreak will affect beef prices, which have already soared due to strong demand and the shrinking of the cattle herd to its smallest in seven decades. New USDA limits on livestock transportation around the affected region have also sparked concern among industry representatives about getting cattle to market, the report said.
“So we’re going to look at a lower tonnage of beef and higher input costs,” said Cooper Little, director of the Independent Cattlemen’s Association of Texas. “Which can keep beef prices on that sharp upward trajectory.” But Ethan Lane, senior vice president of government affairs at the National Cattlemen’s Beef Association, told Politico the impact at the grocery store is “negligible.”
Packer shares sink: Shares of meatpackers Tyson Foods and JBS sank Monday in response to the additional screwworm cases. Tyson shares sank 3%, while JBS dropped 5%. Barron’s noted that for fiscal 2026, Tyson expects its beef segment to post an adjusted operating loss of $350 million to $500 million, even as overall protein demand remains solid. And JBS’s North American beef business posted a negative earnings margin of 4.6% in the latest quarter.
“If the spread of screwworms continues, it could extend the meatpackers’ margin squeeze just as investors were looking for recovery,” Barron’s wrote.
China’s ‘unwavering’ support for North Korea: Chinese President Xi Jinping said Beijing’s commitment to North Korea and its leader Kim Jong-un was “unwavering” as he began a two-day trip to the country on Monday, the South China Morning Post reported. In Xi’s first foreign trip of the year, he expressed strong support for the North Korean leader.
“No matter how the international situation changes, the firm stance of the Chinese [Communist] Party and government in highly valuing the traditional friendship between China and the DPRK [Democratic People’s Republic of Korea] will not change,” Xi told Kim, according to Chinese state news agency Xinhua.
Dollar strength: The ICE U.S. Dollar Index last week hit a nine-week high. Betting on continued strength in the currency may be the cleanest way to take a position on a new regime of higher rates and inflation, BMO Capital Markets top forex strategist, Mark McCormick, said in a note, according to Bloomberg. Oil prices may retreat after the conflict ends, but the inflationary effects will linger, fueling higher rates globally and slower economic growth, which favors the US currency, he said.