One factor from the July World Agricultural Supply and Demand Estimates balance sheet update that needs to be watched is the world corn supply. Global corn stocks have been declining for the past several years and are now forecast to total 275 million metric tons at the end of the 2026/27 marketing year. This is the tightest ending stocks in 10 years and a stocks to use of 18 percent. 

The stocks to use on U.S. corn for the 2026/27 marketing year is 11 percent. Rationing would be warranted in both the domestic and global corn markets at these carryout levels.

Since China made its first new crop soybean purchases, the country has booked a total of 136,000 mt for old crop delivery and 992,000 mt for new crop. While this has been supportive, China has a soybean import target of 25 mmt for the 2026/27 marketing year. Until China’s purchases top this level, daily bookings will receive limited response.

Chinese import trends have changed in recent years as the country tries to expand commodity sources and spread risk. This risk buying is both from production and from price. One source of supplies China has started to open up to is Australia. The latest approval has been to canola trade, with China allowing some canola processors to buy directly from Australian sellers. China has also announced it will be booking feed grain from Australia, and has opened the door for barley trade.

Weather stress continues to impact European Union crops. The firm COCERAL is stating that EU and United Kingdom grain production has been lost from the extreme heat and lack of rainfall. Total soft wheat production for this region is forecast at 140.8 million mt, a decrease of 3 mmt from the last estimate. Corn production is forecast at 52.7 mmt, down from the prior 57.2 mmt projection. France has also cut its crop ratings from adverse weather, with wheat now rated 65 percent Good/Excellent, down 3 percent, and the corn crop rated 47 percent G/E, down 10 percent in the past week.

Wheat harvest is well underway in Argentina, but farmer selling has been minimal. Argentine farmers have only marketed 2 mmt of this year’s wheat production, roughly 10 percent of the crop. The average sales pace at this time of the year is 16.6 percent of production. Uncertain production and currency fluctuations are the primary reasons behind low wheat sales. Argentine farmers are also showing hesitancy in marketing new crop soybeans for the same reasons.

The Brazilian firm CONAB has updated their production forecasts. CONAB now has the Brazil soybean crop at 180.57 mmt, up slightly from the June 180.25 mmt estimate. Soybean exports are forecast at 116.3 mmt, steady from June, and ending stocks at 8.79 mmt versus 9.28 mmt last month. CONAB’s corn crop estimate is now 141.73 mmt, up from June’s 140.46 mmt. Exports held steady at 46.5 mmt, and ending stocks increased from 13.25 mmt last month to a current 14.5 mmt. The large crops are the result of elevated acreage from initial projections. Brazil’s wheat crop is estimated at 6.03 mmt. The USDA is currently forecasting Brazil crops of 138 mmt on corn, 180 mmt for soybeans, and 7.87 mmt on wheat.

Chinese officials have released a portion of the country’s June import numbers. China imported 13.55 mmt of soybeans in June, a 10.5 percent increase from June 2025. China’s 2026 soybean imports now total 50.15 mmt, an increase of 1.5 percent from last year. China also reported June meat imports of 532,000 mt. Year-to-date meat imports now total 3.11 mmt, 3 percent less than the 2025 pace. China continues to cull its domestic hog herd, lessening the need for pork imports. China has also shifted to more beef in diets, and high costs have limited imports of that product.

Chinese pork production to start 2026 was up 3.3 percent from the same period in 2025. Data from MLH Futures Trading shows Chinese hog slaughter in the first six months of 2026 totaled 372.46 million head, and increase of 1.7 percent from the same period in 2025. This was a result of China trying to cull enough hogs to meet government targets. Even with accelerated culling, China has 424.91 million hogs, a slight increase from last year. This indicates China will likely see heavier herd liquidation for the remainder of the year. This comes at the same time pork demand in China is falling in favor of more beef in diets. 

The Consumer Price Index for June was better than trade expected. The June CPI reading showed year to year U.S. inflation of 3.5 percent. This compared to estimates for a 3.8 percent increase and May’s 4.2 percent. Core inflation in June was 2.6 percent and was also below the estimate for 2.8 percent and the May reading of 2.9 percent. While these numbers are positive, these were from data while the U.S. and Iran were in a ceasefire. Now that fighting has escalated, many costs that contribute to inflation will likely rise. Inflation also remains well above the 2 percent Fed Reserve target. These factors limited street response to the drop in inflation.

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