The prospect of $3 corn and $8 soybeans no longer seems far-fetched. According to market analysts, U.S. farmers could face this scenario if record yields materialize and global demand softens. With Midwest weather trending favorable and crop conditions holding firm, grain prices are under significant pressure.

Corn Futures Under Pressure

December corn fell to a one-week low of $4.1675, closing late overnight at $4.18 per bushel, after a 5.5-cent slide on Monday. Barchart's front-month national average cash corn price dropped 4.75 cents to $3.90. Prices are now below the 10-day moving average, reflecting waning bullish momentum.

Despite some concerns about warm overnight temperatures and derecho risks, USDA crop ratings remain historically strong, with 74% rated good-to-excellent, matching last week and well above last year's 67%. In Iowa, that figure rose to 86%, suggesting potential for a bumper harvest.

Soybeans Slide on Rating Drop

November soybeans fell to $10.2225, extending losses from Monday's 9.75-cent drop. National average cash soybean prices fell 13 cents to $9.7725.

Surprisingly, USDA's weekly soybean ratings dipped to 68% good-to-excellent, down from 70% the prior week, though still on par with last year. This decline, despite recent rains, raises eyebrows, particularly as the crop approaches its key pod-filling stage.

Soybean export inspections for the week ending July 17 surged to 364,990 metric tons, double the previous week. Yet overall momentum has been mixed amid technical weakening and shifting weather dynamics.

Weather: Rain, Heat, and the 'Elephant in the Room'

Despite periods of intense heat, the Midwest continues to receive timely rains, maintaining a bullish production outlook. NOAA's 72-hour forecast shows 1.25" to 2"+ rainfall for the northern Corn Belt, potentially boosting late-season development.

StoneX analysts point out that "ridge-riding thunderstorms" have returned in recent outlooks, supporting continued high yield potential. Meanwhile, elevated overnight temps and scattered derecho threats still linger.

Export Demand Losing Steam

Corn exports totaled 983,625 MT last week, down 25%, the weakest since January. Despite that, total 2024-25 corn shipments have reached 2.316 billion bushels, up 29% YoY, hitting 84.2% of USDA's full-year forecast.

Soybean shipments stand at 1.719 billion bushels, or 92.9% of USDA's 1.85 billion bushel target. But with harvest expectations rising, markets now ask: Where will all this grain go?

Wheat Pressured by Harvest Flow

September SRW wheat futures dropped to $5.4075, extending a four-week downtrend. USDA says winter wheat harvest is 73% complete, with Kansas at 97%. Spring wheat crop conditions dipped to 52% good-to-excellent.

Still, exports showed strength at 732,290 MT, the best since September 2022, buoyed by a 700,000 MT annual wheat deal with Bangladesh