Commodities Overview July 2025 Edition

MONTHLY COMMODITIES MARKET OVERVIEW

>>Read the complete July 2025 Edition HERE

KEY HIGHLIGHTS

GRAINS

December Corn continues to shrug off tight US and global inventories as the market looks for higher production in Brazil and takes into account a high probability for record yields and production here in the US. The market quickly moved on from this month’s WASDE report, which on the surface was mildly supportive. In the report, USDA cut US 2024/25 ending stocks another 25 million bushels to 1.340 billion, just below expectations. The 2024/25 stocks/use ratio at 8.7% is a four-year low. US 2025 production was cut 115 million bushels to 15.705 billion, due to the lower acreage estimate from the June survey. Yield was left unchanged at record 181 bushels per acre. New crop usage was cut 50 million bushels due to lower feed demand, while exports were left unchanged at 2.675 billion, something that will have to prove itself over time. US 2025/26 ending stocks were lowered by 90 million bushels to 1.660 billion, 60 million below expectations.

Old crop soybean prices appear to be leveling off near $10 per bushel as the new crop approaches the critical pod-filling stage in the US. With the percent of US soybean acres that are experiencing drought historically low at only 9%, yield forecasts are likely to work higher as the season progresses. Last month’s larger-than-expected Renewable Volume Obligation (RVO) mandates from the EPA continue to drive crush margins higher. Spot board margins as of this writing were $1.88 per bushel, a nine-month high. Bean oil product value is challenging its modern day high at just below 51% of the crush.

December Chicago Wheat prices have fallen back to two-month lows, having giving back all of their mid-June recovery move. This has happened despite speculative traders across all three classes continuing to lighten up on their short positions. The recent Commitments of Traders report showed money managers have been net buyers across the three classes for eight consecutive weeks, reducing their combined net short position from a record 235,000 contracts to just under 97,000 as of July 8. The July USDA WASDE and Crop Production data was mostly neutral. All US wheat production for 2025/26 came in at 1.929 billion bushels, up 8 million from the June reports and 15 million above expectations. Winter wheat production at 1.345 billion bushels was down 37 million from June and 17 million below expectations.

COCOA

As of July 13, Ivory Coast port arrivals since the marketing year began on October 1 had reached 1.64 million tons, up only slightly from 1.63 million for the same period last year. This is the closest the cumulative total has been to year-ago levels since October 13, and the possibility of falling behind last year’s already low levels is looking increasingly likely. However, a drier trend in west Africa the next few weeks could set growers’, minds at ease. World Weather Service said rains have been trending the north of many cocoa production areas, which is normal for mid/late July. This pattern tends to continue into August, with seasonal rains will retuning later in August and September.

COFFEE

The 50% tariff on Brazil imports that President Trump has threatened for Brazil has thrown the coffee market for a loop. The US gets 33% of its coffee from that country. On the one hand, US coffee consumption has been relatively inelastic through the price rise of the past year, but who can say when this will reach a tipping point? There have been suggestions that this will put increased demand on ICE warehouse stocks, but as of July 14 of the 829,000 bags in storage, only 87,000 were stored in US warehouses, with 702,000 sitting in Antwerp and another 39,000 in Bremen/Hamburg. Of the 22,376 pending grading, only 284 were listed in US warehouses (1%). Brazil’s arabica harvest is running behind the average. Safras & Mercado reported that Brazilian coffee producers had sold 31% of their expected 2025/26 coffee crop as of July 9 versus a five-year average of 38% for the period.

COTTON

The July USDA Supply/Demand report put US 2025/26 cotton production at 14.60 million bales up from 14.00 million in the June update. Planted area was increased to 10.12 million acres per the June 30 Acreage update, but yield was lowered to 809 pounds per acre from 820 in June. The abandonment rate was lowered to 14.4% from 17% previously, and reduced abandonment in the Southwest implied an increase in the harvest of lower-yield acres. 2025/26 ending stocks were increased to 4.60 million bales from 4.30 million in June, putting stocks/use ratio at 32.4% versus 30.3% in June, 30.4% last year, and a five-year average of 26.6%. World 2025/26 production came in at 118.42 million bales versus 116.99 million in the June report. In addition to the 600,000-bale increase for the US, China’s production was increased by 1.0 million bales to 31.0 million.

SUGAR

The UNICA report for the second half of June released on July 14 showed Brazilian Center-South sugar production at 2.845 million tons, up from 2.450 million for the first half of the month but down from 3.269 million a year prior. This was bullish against trade expectations calling for 2.95 million, but the market did not derive much benefit, as prices saw only a slight gain off the news. Cumulative production since the marketing year began has reached 12.249 million tons versus 14.285 million at this point last year, 14% behind. Production is 1.16% below the five-year average. The drier conditions in Brazil over the past couple of weeks should benefit harvest and crushing activity for July. The Brazilian harvest has a tendency to peak for the year during the second half of the month.

CRUDE OIL

Israel’s attacks on Iran, followed by the US dropping “bunker buster” bombs on Iranian nuclear sites led to a rally in late June that took September Crude Oil to its highest level since June 2022 and the nearby contract to its highest level since January. The market peaked the Monday following the US bombings and put in an outside reversal lower that same day that saw the market giving up $13.14 (17%) in two sessions. Since then prices have been consolidating inside the lower half of the two-day range. Crude oil did manage a rally on July 14 ahead of an anticipated announcement from President Trump on new sanctions against Russia in reaction to Putin’s intransience regarding the Ukraine war, but the announcement included a 50-day deadline to reach a cease fire agreement before the sanctions would take place, and that disappointed market bulls. OPEC+ agreed to lift their quota another 548,000 barrels per day in August, exceeding even previous increases of 411,000 bpd in May, June and July.

NATURAL GAS

Warm weather this summer has limited the weekly increases in US natural gas storage to some degree, but the lack of a “heat dome” or consistent hot and dry pattern has allow weekly storage injections to proceed at an above-average clip. A shift to an above normal temperature forecast for the last week in July has supported prices. As of July 4, US gas storage was down 6.0% from a year ago but 5.8% above the five-year average. Weekly storage increases have been above the five year average for that date in 15 out of the last 17 weeks. The approach of hurricane season could pressure prices a bit, as it may harm demand more than supply.

LIVE CATTLE

With the US cattle inventory currently down at 70-year-plus lows for the first half of 2025 and a strong US workforce, beef prices have moved to new highs. Add in Memorial Day and the July 4th holiday (the largest grilling day of the year), and beef demand became a perfect storm. At the end of June, year-to-date federal cattle slaughter was close to 890,000 head, 5.6% lower than the same period in 2024. On July 3the choice boxed beef cutout reached a high of $395.60/cwt, up from $366.34 on May 30 and $329.88 a year earlier. The push for beef has sent cattle prices soaring. On July 1 the average steer price was $230.13, up from $229.62 a month prior and $194.83 last year. The current low inventory of fed cattle for slaughter is expected to change.

LEAN HOGS

Year to date federal hog slaughter on June 30 was down 1,258,456 head from the same period in 2024. The short supply sent July 2025 Lean Hog futures to $113.70, up $8.50 for the month and up $22.17 for the second quarter. During June, the 5-day average pork carcass price was up $15.80 for the month. Going forward, the US hog inventory is expected to increase to as much as 1% above a year ago. Pork exports are expected to remain lower in 2025. The most recent export statistics showed total pork and variety cuts were down 6% from January through May.

STOCK INDEX FUTURES

Stock index futures have continued their cautious ascent, with the Nasdaq and S&P 500 both recently hitting record highs. Equities have been supported by a labor market that has remained resilient in the face of economic uncertainty. US payrolls rose by 147,000 in June, and the unemployment rate stood at 4.1%. Inflation picked up in June, with CPI rising to 2.7% year on year, up from 2.4% in May, with tariff-sensitive goods posting larger price increases.

US DOLLAR INDEX

The dollar has exhibited some moderate volatility over the past month, largely consolidating in value against other major currencies and reflecting both economic optimism and caution. The Dollar Index has traded within a narrow range of 96.38 to 99.42. June’s CPI inflation report offered support, as it showed inflation picking up 0.3% month-over-month and suggesting that the effects of tariffs are beginning to seep into the economy. The CPI number also reaffirmed support for the Fed’s wait-and-see approach to monetary policy given an uncertain inflation picture.

EURO CURRENCY

The euro currency has had a mixed performance against most of the major currencies, including the US dollar. President Trump has threatened 30% tariffs against EU nations, as negotiations have seen little progress. Eurozone inflation reached the European Central Bank’s target of 2% last month, while wage growth was up 3.4% on an annualized basis. Markets now expect only one additional rate cut from the ECB this year, and officials have signaled that rates will likely be held steady at the July meeting. This follows eight consecutive cuts since June 2024.

BRITISH POUND

The British pound has fallen roughly 1% against the dollar over the past month, facing pressure from concerns over fiscal spending and a weakening economy, although sticky inflation has provided some support. The UK government scrapped previously planned cuts of £5 billion in benefits, reducing the already thin margin that it is relying on to meet its self-imposed fiscal rules. The move sent gilt yields higher and the sterling lower, as bond markets worried about the government’s ability to reduce its budget deficit.

 

INTEREST RATES

Treasury yields have experienced modest shifts over the past month, as investors have remained cautious over expectations of persistent inflation, government spending, and a wait-and-see Federal Reserve. Yields fell in late June on expectations that interest rate cuts could come sooner than expected, with several Fed officials making dovish remarks. However, June’s labor report dulled hopes of a rate cut, as it showed the economy added 147,000 jobs from the previous month, which gave the Fed more room to leave rates unchanged and tackle inflation. June CPI showed prices rose 0.3% from May, raising the annualized inflation rate to 2.7%.

GOLD

Gold has faced pressure from profit-taking, easing geopolitical tensions, a recovering dollar, and a more stable economic outlook that has resulted in a risk-on sentiment that has spurred the S&P and Nasdaq to reach all-time highs. Recent inflation data reinforced the Fed’s wait-and-see approach to monetary policy, lifting the dollar and sending gold prices down. Central banks have continued to buy gold at a robust pace, though not at the record levels of previous quarters

COPPER

Copper futures reached all-time highs after President Trump announced a 50% tariff on copper imports effective August 1. The Commerce Department has been conducting investigations into tariffs under Section 232 of the Trade Expansion Act of 1962, which allows them to be applied on goods considered essential for national security. This measure is aimed at boosting domestic copper production and reducing reliance on refined imports. However, analysts warn that the policy could strain US supply, as the US imports nearly half of the copper it consumes.

 

 

 

Interested in more futures market commentary?  Explore our Market Dashboards here.