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Key takeaways:
In early July the US grain market begins to shifts from forecast to fact. The winter wheat harvest is running across the southern Plains and pushing into the Midwest, putting the first real yield and quality readings of the year in front of the trade. At the same time the corn crop is moving into pollination, the short window that does more to set the size of the harvest than any other stretch of the season. For procurement teams in food, feed and pet food, this is the point in the calendar when supply-side uncertainty starts to resolve, and when near-term coverage decisions carry the most weight.
The dynamics that make July significant repeat every year. Wheat faces harvest pressure as new-crop supply arrives, corn enters its weather-sensitive phase, and the market begins pricing the season it can see rather than the one it has been guessing at. What changes from year to year is the data that fills in that frame. Here is how the 2026 picture is shaping up, and what to watch through the back half of the year.
Fastmarkets Agriculture understands the challenges faced by the grains and oilseeds industry due to disruptions in production and logistics. As global demand for food, livestock and machinery continues to rise, these disruptions cause increased opacity and volatility in the market. Discover more about our prices and forecasts.
The US winter wheat crop splits into two stories. Hard Red Winter (HRW), the high-protein bread wheat grown across the southern and central Plains in states such as Kansas, Oklahoma and Texas, is the larger class and the one that sets the tone for domestic milling supply. Soft Red Winter (SRW), grown through the eastern Corn Belt and Midwest, is a lower-protein wheat used more in cakes, crackers and feed. The two classes do not always move together, and in 2026 the gap between them matters.The 2026 harvest has run ahead of the normal pace through the spring. By the week ending June 28, it was around 48% complete nationally, against a five-year average near 45% and well ahead of last year’s 37%, with the lead over the average widest in mid-June. Oklahoma was nearly finished and Texas was past the four-fifths mark.
A quick harvest is common when the southern Plains run dry and warm, and that is the catch this year: speed has come alongside a poor crop. Good-to-excellent condition ratings sat at just 26%, well below both last year’s 48% and the five-year average of 43% for the same week, with the deterioration concentrated in HRW country.
That shows up directly in the supply numbers. USDA now puts the 2026/27 winter wheat crop down roughly a quarter from the prior year, driven by the smaller, lower-quality HRW harvest, with all-wheat production trimmed to around 1.54 billion bushels on a yield near 47 bushels per acre. The futures market has repriced accordingly.
Kansas City HRW has pushed to a clear premium over Chicago SRW after trading at or below soft wheat for much of the past year, a spread that reflects the tighter hard-wheat balance rather than broad strength across the complex. Wheat-by-class detail is due in the 10 July WASDE, which will sharpen the read on exactly how thin HRW supply is.
For a reader benchmarking against last year’s budget, both classes sit above year-ago levels, but the move has been led by hard wheat. Kansas City HRW futures were trading near 600 cents per bushel in late June, up around 84 cents from roughly 516 a year earlier. Chicago SRW was near 570 cents, up a smaller 45 cents from about 525. Because HRW has risen faster, it now commands a premium of roughly 30 cents over SRW, having traded at rough parity, a small discount, a year ago.
That repricing of hard wheat against soft is the clearest signal in the US wheat market this summer, and it points to the HRW crop rather than the complex as a whole. Spring wheat, the separate high-protein class grown across the northern Plains, was rated near 54% good-to-excellent, a softer-than-ideal start that bears watching as a second potential source of protein-wheat tightness later in the season.
It is worth panning out to the global picture, because US wheat rarely trades in isolation. Russia remains the largest exporter, with the EU, Canada and Australia close behind, and that competition tends to cap how far US prices can run during the northern hemisphere harvest. USDA sees world wheat trade lower year on year, largely on softer import demand from North Africa and the Middle East, and projects US exports down on smaller exportable supplies and higher relative prices. For a US buyer, the takeaway is that the bullish signal here is a domestic, HRW-quality story, not a global shortage. Watching wheat market news on the export tenders out of the Black Sea region remains the best guide to where the competition sits.
July is the month that makes or breaks the US corn crop. Pollination, which typically runs from late June through July, is when the plant is most exposed to heat stress and moisture shortfall. The number of kernels set during this stretch effectively caps the yield, and a poor outcome here cannot be made up later in the season no matter how favourable August turns. That is what makes the period structurally important every year, not just this one. The areas to watch are the heart of the Corn Belt: Iowa, Illinois, Nebraska, Minnesota and Indiana, which together account for the bulk of the crop.
Coming into the window, the 2026 crop looks solid if unspectacular. Good-to-excellent ratings were 67% as of the week ending 28 June, below last year’s 73% but above the five-year average of 64%, helped by widespread and timely Corn Belt rainfall through the spring. The risk sits in the forecast rather than the rear-view mirror. Hot weather, with temperatures approaching 100 degrees Fahrenheit across a wide stretch from the Plains to the East Coast, was building into early July, and it is the interaction of that heat with pollination timing that buyers should track most closely over the next few weeks.
Prices reflect the comfortable starting point. Nearby CBOT corn was trading near multi-month lows around the low 400s in cents per bushel, with the new-crop December contract only modestly higher, and managed money holding a large net short position on a steady run of beneficial weather. Cash markets tell a slightly firmer story than the board: Fastmarkets assessed corn FOB US Gulf near 203.50 dollars per tonne, about 5.17 dollars per bushel, with the export basis holding firm around 95 cents over the board even as futures sag.
The familiar summer refrain that rain makes grain has done the heavy lifting on the downside, helped along by softer crude oil and a firmer dollar. The risk profile is asymmetric: with a good crop and a short market already priced in, a genuine heat event during pollination would have more room to move prices up than a continuation of benign weather has to push them down. Any corn price forecast through July should be framed around that weather skew rather than a single point estimate.
One supportive note sits on the demand side, and the firm Gulf basis is part of it. US corn export sales for the current marketing year had already reached the full USDA projection by mid-June, running ahead of the recent multi-year pace, which lends some quiet support to a market otherwise leaning bearish on the new crop. Strong old-crop shipments do not change the new-crop weather story, but they do mean the balance sheet is being drawn down from a known, firm base rather than a soft one heading into the transition between crop years.
For animal feed and pet food buyers, corn is the anchor of the ration and the reference point for the wider energy-feed complex. Distillers dried grains (DDGS), the co-product of ethanol production, tend to track corn closely. Fastmarkets DDGS assessments across the Midwest had eased to roughly 145 to 150 dollars per short ton FOB by late June, down from a spring peak nearer 175 to 195 dollars as corn fell, so today’s soft corn values are feeding through to cheaper energy feed as well.
Cheap corn and cheap DDGS are a tailwind for feed and pet food input costs right now, but it is a tailwind that depends entirely on the July weather holding. A counterweight sits in the southern hemisphere: Brazil recently raised its estimate for the large second corn crop, and ample South American supply gives global buyers an alternative origin and keeps a lid on any US-led rally.
Stepping back from the crop-by-crop view, the overall US grain balance heading into the second half is best described as snug on wheat and comfortable but tightening on corn. On corn, USDA projects 2026/27 ending stocks near 2.0 billion bushels, with the stocks-to-use ratio easing to around 12%, one of the tighter readings in recent years and down from the more relaxed 2.14 billion bushel carryout estimated for the current crop. That is still a workable cushion, but it leaves less room to absorb a weather problem than the market mood currently implies. On wheat, ending stocks are set to fall around 18% year on year on the smaller crop, a genuinely tight position concentrated in the HRW class. Barley and other small-grain supplies round out a feed-grain picture that is adequate rather than abundant.
The within-year stock position tells the same story from a different angle. Quarterly total stocks have run above the five-year seasonal average through the old crop year for both corn and wheat, with corn stocks on 1 March at 9.0 billion bushels against a five-year average near 7.9 billion. The June 1 quarterly stocks, released on 30 June, confirmed the cushion.
Corn stocks of 5.29 billion bushels were up 14% on the year and above the five-year average for the date, although they came in below the trade’s expectation near 5.41 billion, a mildly supportive surprise against an otherwise heavy balance. Old-crop all-wheat stocks of 920 million bushels were up 8% on the year and also above the seasonal norm, so the new wheat marketing year opens with comfortable carry-in even as the 2026/27 HRW crop comes in small. In short, the market enters the new season carrying ample nearby supplies, and the tightening described above is a forward, new-crop development rather than a shortage on hand today.
The sensitivity point is worth spelling out. At a stocks-to-use ratio near 12%, corn prices react more sharply to each incremental change in the national yield estimate than they would with a fat carryout to cushion the blow, which is another reason the July weather carries outsized weight this year specifically. Wheat, by contrast, has already traded much of its tight balance into the price, so the larger surprises from here are more likely to come from the demand side and from how aggressively Russia and the EU choose to price their exportable surplus through the second half.
The July WASDE will fold in the first wheat-by-class detail of the new crop year. The direction-of-risk summary is straightforward: wheat carries upside risk skewed toward the tight HRW balance but capped by global competition, while corn carries downside that is largely already priced and upside that hinges on the next few weeks of weather. For a buyer, this is the bridge between what has happened and what to watch, and it is where reading the grains and oilseeds market as a connected system, rather than one crop at a time, pays off.
Four practical takeaways for the second half of the year: