Porto Alegre, July 3, 2026 – This month of July begins with important factors for the corn and soybean markets. First, the planted area report to be released on the 30th, which will provide the first preliminary indication of the actual planting decisions made by U.S. producers for this crop. Then comes the weather during July, the pollination and tasseling period for the U.S. crop, with a heat wave moving into the Midwest. Next is the progress of Brazil’s 2026 second-crop corn harvest, delayed by late planting and by the wetter winter weather, which has postponed harvesting activities. For the Brazilian market, the focus remains the same: the pace of exports to provide some support to domestic prices. So far, Brazilian shipments are getting off to a very slow start, even though harvesting in Mato Grosso is progressing well, requiring either a stronger exchange rate movement and/or higher Chicago prices to create a less bearish environment for domestic prices.
The next meeting of the U.S. Federal Reserve will not take place until July 29. Therefore, until then, the market will try to build expectations regarding interest rates and the Fed’s decisions. This coming Friday, June employment data will be released, representing an important benchmark for the interest rate outlook. The following week, June inflation data will be released, another key component for the market.
Meanwhile, crude oil has fallen below US$70 per barrel and, over time, should return to its more balanced pre-war level, around US$60 per barrel. The major inflationary variable in 2026 is certainly fuel prices, and as the effects of the war subside, this variable loses strength. Even so, expectations continue to favor the Fed beginning to raise interest rates as early as September, which could affect international capital flows and the U.S. dollar. The U.S. Dollar Index remains at its highest level of the year, above 101 points, and could break through the 102-point barrier, signaling further appreciation of the U.S. dollar against other currencies should employment and inflation data come in stronger over the next two weeks.
For the Brazilian real, the current environment is unfavorable. Higher long-term U.S. interest rates strengthen the U.S. dollar. Falling Selic rates in Brazil contrast with the external environment and reduce the interest rate differential, accelerating the depreciation of the real. Brazil’s Central Bank and partner banks will try to contain this depreciation process; however, it appears inevitable under this unfavorable environment for the country. The situation could intensify if, at the next Copom meeting on August 4, another Selic rate cut is approved. If three Selic cuts occurred during the war and inflationary surge, now that oil and possibly fuel prices are stabilizing, could Copom accelerate the pace of interest rate cuts?
Planted Area and Weather Dominate Attention in Chicago This Week
The U.S. crop continues to develop well so far. At the moment, there are no significant negative factors to highlight, except for excessive moisture in some areas of the Mississippi Delta. As a result, the focus throughout July will remain on the most critical period for corn: the weather, with a heat wave approaching the entire Midwest. However, the key data this week will be the first preliminary planted area estimate. After that, another upward adjustment to U.S. exports for the current season, reducing ending stocks, is also expected. Several pieces of information could influence prices on the Chicago Board of Trade.
The 2026 U.S. crop continues to develop under excellent conditions, with the possibility that the share of fields rated good to excellent, currently at 68%, could increase further. Excessive moisture in some regions and reduced sunlight may create localized issues with little impact on the overall situation. The key point now is that the crop is entering the critical pollination and tasseling stage, and everything needs to progress well over the coming weeks. July begins with a strong heat wave moving into the Midwest, a factor that can always affect yields if the expected rainfall fails to materialize.
Despite some rally during the week, supported by the heat wave and the possibility of a strike in Argentina, the market continues to trade within a lower range, around US$4.10 to US$4.20 per bushel, while awaiting further developments regarding the 2026 crop. On the other hand, local producers still need to empty their storage facilities before the arrival of the new crop in September, which also continues to pressure both domestic prices and the Chicago market.
For the USDA’s July report, the key issue once again will be exports for the current marketing year. In June, the Department increased exports by 2 million metric tons but offset this by reducing domestic demand, keeping ending stocks at 54 million metric tons. The problem is that this export figure will need to be raised again, since weekly sales have now reached 54.6 million metric tons, already exceeding the June estimate. An additional increase of 2 million metric tons in the export forecast, accompanied by a proportional reduction in ending stocks, once again appears to be the logical adjustment at this point. Naturally, this would also reduce new-crop ending stocks, which could become a more speculative factor for the market.
This week, however, will bring the first preliminary planted area estimate, reflecting the most accurate figure of what was actually planted this year. Subsequent updates typically consist only of minor adjustments. There have been years in which final planted acreage differed significantly from the figures reported in the Prospective Plantings report. This year, that could happen again, given that the corn-soybean price ratio and biodiesel demand may have encouraged more soybean planting than corn.
It is important to note that this figure is extremely difficult to forecast, since the data come exclusively from producers’ planted area registrations within the USDA system. Therefore, any projection serves little practical purpose. Nevertheless, the market has formed its own expectations, anticipating 94.94 million acres of corn, compared to the 95.3 million acres indicated in the Prospective Plantings report. Proportionally, soybean acreage is expected to increase to 85.4 million acres.
If the planted area report comes in within these expectations, it should have little impact on corn, since yield remains the major variable. With the 2026 crop developing well, yields above the USDA’s current projection of 183 bushels per acre could become a reality later on. It should simply be noted that this planted area report can always bring surprises.
In Argentina, harvesting continues to advance, yields remain high, and the country needs to export its crop. At the moment, scheduled shipments total 16.5 million metric tons this season, compared to 13 million metric tons during the same period last year. Rainfall and low temperatures continue to delay harvesting, while the possibility of a strike this week also remains a source of concern.
