Summer weather takes center stage for grain markets

By Doug Tenney, Leist Mercantile

Happy Fourth of July to everyone! It’s just around the corner. Everyone is surely aware that this year marks the 250th anniversary of our country. Family and community parties could easily be over-the-top celebrations of this historic event for our country. It will be a time to remember for years to come. How many can remember the celebrations that took place at the 200-year mark? Meanwhile, Ohio producers are hoping for timely rains and that a summer drought does not occur.

Many weather forecasters will say that the United States is now experiencing an El Niño. Typically, that weather pattern is not kind to yields for Ohio’s producers. That pattern often results in two knockout punches: declining yields and declining prices for corn and soybeans. NOAA just came out on June 11 with a 63% prediction of a U.S. summer Super El Niño. A Super El Niño has been in the news for at least three months. While this potential weather phenomenon has been in the headlines, it is not fresh news.

The June 11 WASDE report showed only minor changes from May. For the 2025-26 marketing year, old-crop corn demand was adjusted slightly, but the net effect was zero. Corn used for ethanol was estimated at 5.575 billion bushels, down 25 million from the prior report. Although ethanol margins have remained strong, production rates have softened in recent weeks. That reduction was not surprising, given the June 10 weekly energy report, which showed that the weekly pace needed to reach the USDA’s annual projection, lagging for the eighth straight week. As a result, the USDA lowered the corn used for ethanol.  

At the same time, U.S. corn exports have been strong for weeks, prompting the USDA to raise exports by 25 million bushels. Old-crop corn ending stocks for the 2025-26 marketing year, which ends Aug. 31, 2026, were estimated at 2.145 billion bushels. Meanwhile, new crop corn ending stocks were estimated at 1.960 billion bushels. Both the new-crop corn exports of 3.150 billion bushels and the corn used for ethanol at 5.6 billion bushels were unchanged from the May report.

Old-crop soybean ending stocks of 340 million bushels were unchanged. Demand for that crop year had an export decline of 20 million bushels to 1.510 billion bushels, and soybean crush at 6,2.650 billion bushels, an increase of 20 million bushels.  

Now that July is upon us, traders were watching the USDA Quarterly Grain Stocks report closely. They wanted to see whether the corn stocks figure would come in below, or well below, trade estimates. If so, it would bolster the U.S. corn yield estimate of 186.5 bushels per acre in the January 12 WASDE supply-and-demand report, which was too high.

Soybean crush margins have reached multi-year highs of $3 to $4 per bushel over the past two months. Louis Dreyfus Company’s (LDC) soybean crushing plant under construction in Upper Sandusky, Ohio, is expected to begin operations this fall. That new facility is also likely to bid aggressively for soybeans throughout the year.

Heavy rains during the second week of June in the southern Midwest are threatening the wheat harvest. The delays could make harvest uneven, difficult, and inconsistent. Those conditions may also hurt milling-quality wheat, increasing feed-grade supplies. A larger feed-wheat supply could create added competition for corn, which has already seen sharp price declines from mid-May to mid-June.

July 2026 CBOT corn reached $4.875 on May 5, fueled by expectations of Chinese buying of U.S. grains. That expectation turned flat, resulting in heavy speculative selling pressure fueled by fantastic early-season weather and stellar growing conditions from May into June 11, as it fell precipitously to $4.105.

The rainfall activity in Ohio during the second week of June was haphazard. Pop-up summer thunderstorms are already in a pattern of occurring with little warning. Expect those types of storms to be commonplace in Ohio this summer, especially when daily highs reach the mid-80s and higher. Just to detail the freaky rain events so far this year, some producers had to plant soybeans three different times in central and southern Ohio to get their desired stand.

Severe weather problems in the western corn belt or new demand will be needed to push prices higher than mid-June levels, when December CBOT corn was $4.39, and November CBOT soybeans were $11.34.

Thought for the day: “Oh, the summer night has a smile of light, and she sits on a sapphire throne.” – Bryar Proctor.