Grains
Row crops traded mostly higher Tuesday, following a mixed to bullish report release from USDA. Wheat futures led the way, trading up the daily limit for winter markets after USDA surprised traders by estimating the lowest crop since 1972. Corn and soybean fundamentals were more mixed in nature, but there were reasons for optimism as well, especially with President Trump set to visit China later this week, which traders will be watching closely for demand clues. In outside markets, energy futures moved higher again as the standstill in the Middle East continues. In macro news, the April Consumer Price Index reading was the hottest reading in three years, with overall prices rising 3.8% annually, led by high fuel costs.
Rhett Montgomery DTN Lead Analyst
GENERAL COMMENTS:
July corn closed up 4 3/4 cents and December corn was up 4 1/4 cents. July soybeans closed up 13 3/4 cents and November soybeans were up 10 1/4 cents. July KC wheat closed up 45 cents, July Chicago wheat was up 45 cents, July MIAX Minneapolis wheat was up 37 1/2 cents.
The U.S. Dollar Index is up 0.31 at 98.26. The Dow Jones Industrial Average is up 97.0 points at 49,889.0. June gold is down $20.90 at $4,707.80, July silver is up $0.85 at $86.80 and July copper is up $0.1695. June crude oil is up $4.19 at $102.26, June ultra-low sulfur diesel is up $0.1868, June RBOB gasoline is up $0.0983 and June natural gas is down $0.073.
CORN:
July corn futures were up 4 3/4 cents on Tuesday, closing at $4.80. December futures were up 4 1/4 cents to $5.02, once again closing in on 2026 calendar-year highs. Corn futures were bullishly influenced by the limit-higher trade in wheat, as well as expected lower production in 2026, though USDA estimated the second largest crop on record at 16 billion bushels (bb). Support to watch is from $4.67 to $4.70 on the July board, with a bullish target of $4.86 for a new 2026 calendar-year high close.
As mentioned, USDA expects a 16-bb corn crop to be produced in 2026, down from 2025 on lower area as well as a slightly lower 183-bushel-per-acre (bpa) trendline yield. USDA expects next year's average corn price to improve to 35 cents to $4.40. As a result, corn demand is expected to decline slightly as well. Overall, new-crop 2026 ending stocks were forecasts at 1.957 bb, down from 2.142 bb in 2026 but still historically toward the larger end of yearly reserves.
On the world balance sheet, as expected USDA increased their outlook for Brazil and Argentina's 2026 supplies, by a combined 10 million metric tons (mmt). World reserves (not including China) rose to 4.7 bb, the largest in eight years. Looking ahead to 2026-27, world reserves are expected to decline by 7%, influenced heavily by the U.S. and China. In China, world stocks in 2026-27 are expected to hit a 13-year low, potentially something to watch as President Trump visits China this week.
The DTN National Corn Index finished Monday at $4.35. Tuesday's futures close and Monday's national average corn basis of 41 cents under the July board would indicate the index on Tuesday afternoon to be near $4.39.
SOYBEANS:
July soybean futures closed up 13 3/4 cents on Tuesday to $12.26 3/4. November futures were up 10 1/4 cents to $12.05, setting a new high close for 2026. Traders reacted bullishly to Tuesday's WASDE, which again keeps the soybean surplus right on the fence of a more bullish situation with production right now still dependent on a record-tying trend yield. For the July board, support is seen in the low $11.90s, meanwhile the bullish target is $12.40, the high close in March.
Beginning with the old-crop balance sheet, USDA again reshuffled demand, cutting 10 mb out of exports in 2025-26 to 1.53 bb while increasing their crush outlook once again to 2.63 bb. As a result, stocks declined to 340 mb. For the new-crop 2026 season, USDA is forecasting the second largest U.S. soybean crop on record at 4.435 bb, behind only 2021. Still, despite a $1.00 per bushel increase to USDA's price outlook, demand is expected to rise as well by 5%. President Trump's visit to China may provide more reassurance on the export side of things, but for now domestic crush is once again expected to expand to a new record of 2.75 bb. This leaves very little room for a growing season error, as each bushel up or down from trendline yield equates to plus or minus 84 mb to total supply.
For the world balance sheet, while traders were expecting slight revisions higher to South American production in 2026, USDA left their estimates unchanged. Total world reserves remain elevated just below record levels set in 2025. Looking ahead to 2026, Brazil is expected to expand soybean production once again to 186 mmt, the third consecutive record if true, and world reserves as a result are expected to remain elevated. As a silver lining, despite murmurings over the past month that China's soybean demand will decline next year, USDA disagrees, expecting 114 mmt of imports compared to 112 mmt this year.
The DTN National Soybean Index finished Monday at $11.45. Tuesday's futures close and Monday's national average soybean basis of 68 cents under the July board would indicate the index on Tuesday afternoon to be near $11.59.
WHEAT:
July Kansas City wheat futures closed up the daily price limit of 45 cents on Tuesday, closing at $7.31 1/4, approaching two-year highs for most active KC futures. Chicago wheat was also up the limit while Minneapolis futures were up almost 40 cents as well. It didn't take much scrolling through Tuesday's USDA report to know it was going to warrant a bullish price reaction, with USDA coming in well below expectations on their 2026 production outlook in the U.S. Looking ahead, the market will perhaps face technical resistance near Tuesday's close but a break above 2024 highs would set 2023 price range from $7.50 up to $8.25 as next targets. Though the market will likely remain volatile and sensitive to geopolitical news as well in the meanwhile.
USDA's 2026 wheat crop was estimated at just 1.561 bb, the lowest since 1972 if realized, and well below the average trade estimate of 1.731 bb. This was driven by the second highest abandonment rate on record, with just 75.2% of already historically low planted wheat acres expected to be harvested. Meanwhile, USDA is expected a $1.50 per bushel increase to the average farm gate wheat price in 2026-27. As a result, wheat demand is expected to decline, especially in terms of exports, where a 15% year-over-year drop is forecasted. The forecast for ending stocks of 762 mb would be the lowest in three years but still slightly above the previous five-year average.
For world wheat, USDA is expecting year-over-year production declines across most major exporting countries, partially the result of exceptional production in 2025 but also due to lower area amid low prices (until the last couple months) but also high costs. World ending stocks of wheat are expected to decline by 1.5% in 2026-27, though still slightly above recent average levels. The market may continue to be torn between comfortable near-term supplies but will continue to monitor for input cost influenced shifts in acreage as long as the Strait of Hormuz remains cutoff to world fertilizer trade.
Livestock
It's been a highly political, topsy-turvy Tuesday morning for the cattle complex following Monday's mayhem day of trading where it was reported the Trump administration was going to roll back tariffs on beef imports from all major beef exporting countries. However, then news broke Tuesday morning that the administration paused that train of thought and doesn't intend to do so in the immediate future. Needless to say, upon hearing the news Tuesday morning that tariffs would remain in place, the cattle contracts shot higher, but we entered into Tuesday's noon hour mostly lower after being fatigued from the back-and-forth. Final beef markets closed off in the red.
The feeder cattle contracts were also trading lower into Tuesday's noon hour as the market was skeptical of what headline could pop up next.
The lean hog contracts were trading lower into Tuesday's noon hour as well as the market simply wasn't seeing the stable support it needed.