Grain markets this morning are in the red as slow-moving trade talks, strong crop conditions, and bearish technicals are driving bearish sentiment.
“Only a man who knows what it is like to be defeated can reach down to the bottom of his soul and come up with the extra ounce of power it takes to win when the match is even.” – Muhammad Ali (US Boxer)
Bearish Grain Markets News Finding a July Bottom?
Grain markets are in the red again to start the week as it deals with pretty decent-looking crops around North America. There’s also the technical pressure, especially for corn prices as managed increased their net short position by almost 50% to just over 104,000 short positions. This level of bearish sentiment hasn’t been seen by the market since February of this year.
For corn prices specifically, the case for “Lower for Longer” is possibly in the cards. And the USDA is willing to admit it, cutting the seasonal average farm price for 2018/19 to $3.80 USD/bushel in last week’s July WASDE report.
Comparably, the USDA revised the season-average farm price for soybeans, projecting $9.25 USD /bushel, 75 cents from the previous WASDE. For perspective, November 2018 canola prices ended last week at their lowest close in almost nine months: back on October 17, 2017, canola prices closed at $486.70 CAD/tonne.
Among other things, we told our GrainCents soybean readers this weekend that while China is cutting back on imports, we will likely see more US trade flow to the European Union, as lower EU rapeseed production and sunflower seed supplies along the Black Sea are helping the cause.
But this is an ugly market.
Watching soybeans fall by $2.00 in less than two months has been one of the rare experiences of a lifetime. Global fundamentals had remained in place, but this ongoing trade spat has hammered short-term demand and sent many people running for the exits.
Grain Markets Looking for Bullish Possibilities
Also driving the continued bearish sentiment in the market is the lack of positive deals coming out of the trade war headlines. Things might’ve been slowed down through a bit by China as they filed a complaint today with the World Trade Organization over the USA’s most recent plan for an additional $200 Billion worth of tariffs on Chinese goods. 
It’s becoming clearer that American trade partners are looking for different approaches to dealing with US President Trump’s trade agenda.
Worth noting is that also today, the Trump-Putin – I mean, the US-Russia – Summit begins in Helsinki.  There’s a lot of political headlines surrounding this meeting, especially since, this past Saturday, the US Justice Department announced indictments against 12 Russian nationals who hacked the US DemocraticNational Committee.  We’ll leave the politics at that thought for today.
At 12 EST, we’ll get NOPA’s crush report, telling the grain markets how many bushels of soybeans were used in June. The average pre-report guesstimate is for 159.6 million bushels or 4.343 million metric tonnes (MMT) if converting bushels into metric tonnes. This would be up 3.6% higher than June 2017’s volume of soybeans crushed, but if realized, would still keep total 2017/18 crop-year-to-date crush below the pace required to meet the USDA’s target of 2.085 billion bushels (or about 56.744 MMT).
In Brazil, Safras & Mercado is estimating that Brazilian farmers will plant a new record of 88.96 million acres of soybeans for their 2018/19 crop year. This would be an increase of 2.3% year-over-year. There has been some speculation though that if the 25% Chinese tariffs on US soybeans hold and Brazilian domestic soybean prices stay near these current 14-year highs, Brazil’s soybean acre could top 90 million acres.
USDA Crop Progress Report to Show the Same?
Going into today’s USDA Crop Progress report, the reality is that conditions are looking pretty good. Here’s where the numbers sat last week, and what the five-year average for today’s report is.
For our GrainCents readers of other crops like peas, lentils, chickpeas, flax, and durum, we also dig into the good-to-excellent crop progress ratings for each state. Further, we’re looking at the crop ratings of each crop in each province as well, aggregating the crop reports, so it’s easier to understand what crops in which states or provinces are looking great, which ones aren’t doing so hot, and where crop progress is just average.
Going into the second half of July, talk of soybeans blooming and setting pods and corn pollinating becomes more commonplace. This year, the weather outlook is looking mostly favorable for the US Corn Belt. 
However, we’re also cognizant of the lack of rainfall seen over the last few months in a few areas across the Midwest, including Illinois.  Karen Braun of Reuters also notes that tip-backed corn is becoming more commonplace and that while an above average yield is still expected, a record is unlikely.