Commodities Overview August 2025 Edition

MONTHLY COMMODITIES MARKET OVERVIEW

>>Read the complete August 2025 Edition HERE

KEY HIGHLIGHTS

GRAINS

Corn prices staged a nice recovery following the bearish USDA production and WASDE reports on August 12. In the report, the USDA lowered old crop, 2024/25 ending stocks by 35 million bushels to 1.305 billion, which was a slightly larger decline than expected. Exports were raised another 70 billion bushels to 2.820 billion. Usage for ethanol production was cut by 30 million bushels and other FSI usage by 5 million.

The August USDA production and WASDE reports came in bullish against expectations, and soybean prices jumped to new highs for the month in its wake. Old crop 2024/25 ending stocks came in at 330 million bushels, down 20 million from the previous report and slightly below expectations. Thes was due to 10 million-bushel increases in exports and crush. To absorb the higher bean oil supplies that would result from the higher crush rates, bean oil domestic usage rose 150 million pounds. Exports were cut by 50 million pounds, and imports were cut by 25 million, keeping stocks steady at just over 1.5 billion pounds. Soybean meal exports were increased by 1%. The 2025 harvested area was slashed by 2.4 million acres from the July estimate to 80.1 million. The average yield jumped 1.1 bushels per acre to a record 53.6. This pulled production down by 43 million bushels to 4.292 billion, roughly 75 million below expectations.

The modest price rebound ahead of the August USDA reports was short lived, as all three classes of wheat pulled back to fresh contract lows the middle of the month. In the report, all US wheat production was revised down 2 million bushels to 1.927 billion. The average yield was put at 52.7 bushels per acre, matching the record high from 2016. Winter wheat production increased by 10 mil bushels to 1.355 billion, roughly 10 million above expectations. HRW production was increased by 14 mil bushels to 769 million and SRW by 2 million to 339 million. White wheat production was lowered by 7 million bushels. Spring wheat production was lowered 20 million bushels to 484 million, and durum was increased by 7 million to 87 million.

 

 

COCOA

The release of the second-quarter grind data on July 17 marked the culmination of a selloff from highs on May 20. The data came in much weaker than expected, with European grind down 7.2% from the same period in 2024 and Asian grind down 16.3%. North American grind was less ominous as it was down 2.8%. This seemed to confirm ideas that high prices had hurt demand. Candy companies raised prices and developed new confections that relied less on chocolate. The market has since retraced more than about 61.8% of the selloff, but as of this writing it has yet to close above that line. West African rains shifted north in the second half of July, out of the main cocoa growing regions. This is a normal weather pattern, and rains should return in later August or early September.

COFFEE

December Coffee broke out of a month-long consolidation in August and reached its highest level since. As of this writing the market had achieved that 61.8% retracement of the selloff from the May contract high to the July 7 low. One supportive factor has been ICE certified stocks, which have fallen to their lowest level since May 2024. There was a frost event in early August that appears to have caused some damage to Brazil’s 2026/27 crop.

COTTON

The cotton market got a breath of life from the August USDA Supply/Demand report, which lowered US planted area and tighten the supply outlook. The report put US 2025/26 cotton production at 13.21 million bales, down from 14.60 million in the July and 1.3 million below expectation. Planted area was lowered to 9.28 million acres from 10.12 million in the July update, and yield was increased to 862 pounds per acre from 809 in July. The abandonment rate was increased to 20.7% from 14.4% previously due to dryness in the Southwest, putting harvested area at 7.36 million acres. Ending stocks came in at 3.60 million bales versus 4.60 million in July.

SUGAR

The UNICA report for the second half of July showed that cumulative Brazilian Center South sugar production for the marketing year that began in April was running 7.8% below a year ago. This was an improvement from mid-July when production was 9.2% behind and from the end of June when it was 14% behind. Dry conditions in July were conducive to harvest and crushing after a rainy June. Production for the first half July was 15% above last year after being averaging 18% lower than a year ago in June. However, second half July production was 0.8% below last year.

CRUDE OIL

Crude oil peaked in June on the Monday following the US bombings on Iran and saw a quick selloff that reversed lower that saw the October contract it giving up $13.14 (17%) in two sessions. The market then managed to claw back about 62% of those losses, but then it resumed its downtrend and took out that late June low. As of this week it has found some support at 61.75, which is the 61.8% retracement of the rally from the April low to the June high. One supportive factor had been President Trump threatening tariffs of 100% on buyers of Russian crude oil if Russian President Putin did not agree to a cease fire with Ukraine. The two biggest buyers of Russian crude have been India and China. India reportedly backed off from buying Russian crude in response, but the Trump administration still issued an additional 25% tariff on Indian exports, bringing their total rate to 50%.

NATURAL GAS

US temperatures may have been above average this summer, but they did not generate enough cooling demand to overcome record US natural gas production. As of August 18, financial infrastructure and data provider LSEG put that average gas output in the lower US 48 states at 108.2 billion cubic feet per day for August, above the previous record 107.9 bcfd from July. The Baker Hughes count of US natural gas rigs in operation reached 124 in early August, the highest in two years . As of August 8, US natural gas in storage reached 3,186 bcf, down 2.4% from a year prior but 6.5% above the five year average. Weekly builds have been consistently above average and above year-ago levels since the build-season began in April. One supportive factor for the natural gas market has been the strong pace of US LNG exports.

LIVE CATTLE

Beef and cattle prices could be used in Las Vegas wager on what price and what date the peaks will occur.  New, historically high prices are a weekly occurrence. At the time of this writing, cash prices in the Midwest were $245.00/cwt and dressed prices as high at $392.00/cwt, primarily due to low slaughter. US federal daily cattle slaughter is down 1.37 million head so far this year, a 6.8% decline, and that follows a slaughter rate last year that was down more than 1.25 million head from 2023. The lack of cattle has sent beef prices skyrocketing. The choice boxed beef cutout value as of August 21 was $408.13/cwt, up from $315.75 a year ago, and the select cutout was $384.71, up from $302.24. Cash cattle prices in the Midwest are currently around $242 versus $188 a year ago.

LEAN HOGS

Lean hog futures peaked on June 23, two days before the quarterly USDA Hogs and Pigs report. Lean hogs prices were lower after the report indicated that the June 1 inventory was up 1% from March 1 and that the March-May pig was up 1% from the same period in 2024. From June 23 to July 15, August Lean Hogs dropped from a closing price of $113.05/cwt on June 23 to $104.02 on July 15, a decline of $9.82.  The contract expired at $109.65 on August 14. Prices are higher in 2025 because hog slaughter has been considerably lower.

STOCK INDEX FUTURES

Stock index futures have posted steady gains over the past month, with all major indexes hitting record highs, reflecting a cautiously optimistic market environment against an uncertain macroeconomic backdrop. Several key factors contributed to this upward momentum. First, corporate earnings reports for Q2 largely exceeded expectations, especially among tech giants, which helped reinforce investor confidence, as it appeared that tariffs were not weighing on companies’ bottom lines as drastically as initially thought. Of the companies that reported earnings, 58% increased their full-year guidance for 2025, double the number from the first quarter. The S&P 500 posted an 11% earnings growth on an annualized basis, nearly triple the widely expected growth rate of 4%, and 84% of the companies that have reported have beaten Wall Street estimates. US retail sales grew 0.5% in July, down from a revised figure of 0.9% in June and below estimates of 0.6% growth, suggesting a normalization in consumer spending following a turbulent couple of months.

US DOLLAR INDEX

The US Dollar Index has experienced broad volatility over the past month, climbing to a three-month high in late July before falling again. This surge was driven by the US–EU trade deal, which was seen as favoring the US and bringing greater market certainty while averting a global trade war. The dollar fell steeply following July’s labor report, as traders increased bets on the number of potential Fed rate cuts. July’s CPI inflation data also contributed to dollar weakness, as the modest print furthered increased the chances for a rate cut, but the dollar pared its losses following July’s PPI release, which showed an alarming rise in price input inflation.

EURO CURRENCY

The euro has depreciated slightly against the dollar over the past month, owing in part to the US-EU trade deal, but it pared most of its losses after a sour US jobs report added to speculation of a reduction in US interest rates. Nearly all EU exports to the US will now be subject to a 15% tariff, with some exceptions for “unavailable natural resources,” such as cork, as well as aircraft, aircraft parts, generic pharmaceuticals, and the chemicals used to make them. Those products will be tariffed at rates that predate any recent tariff moves from the Trump administration.

BRITISH POUND

The British Pound barely moved against the dollar over the past month after a tight vote at the Bank of England to cut interest rates. The BoE lowered its key rate to 4% from 4.25%, after having made the first cut in this series last August. Opposition to a rate cut was stronger than expected, with two rounds of voting required for the first time in the Monetary Policy Committee’s history. The split in voting highlights the differing opinions on rising inflation, which is expected to hit 4% in September, as signs of labor market strain continue to appear.

 

 

INTEREST RATES

The Treasury market has experienced moderate volatility over the past month, with yields seesawing following a sloppy round of funding, July’s poor labor report, and recent inflation data. Treasury auctions have shown sloppy demand across the curve, highlighting investor caution amid high supply and macro uncertainty. The $25 billion 30-year bond auction saw a below-average bid-to-cover ratio of 2.27, with indirect bids falling short and dealers taking their largest share in a year. This followed similarly weak demand in the 10-year and 3-year note auctions, both of which posted their softest bid metrics in over a year.

GOLD

Reduced trade frictions have led gold to largely consolidate over the past month, with spot prices falling roughly half a percent since mid-July and trading within a narrow range of $3,270 to $3,470 per ounce. The recent sideways movement reflects a market in pause mode, digesting earlier gains amid persistent geopolitical tensions, shifting US monetary policy expectations, and a weakening US dollar.

COPPER

US copper futures experienced a sharp decline after President Trump announced that new US tariffs would only apply to semi-finished products like wires and pipes, exempting key imports such as ore, cathodes, and concentrates that make up the bulk of copper inflows. Prices rebounded somewhat, due to a mix of supply fears and oversold conditions, leaving the metal down roughly 20% since mid-July. Copper has also felt pressure from Chinese data that showed new yuan loans dropping unexpectedly in July.

 

 

 

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