Agricultural Market on July 9: Coffee Prices Surge While Grain Group Continues to Decline
In the overnight trading session, agricultural commodities fluctuated in different directions as the market was influenced by weather conditions and the progress of the growing season. While coffee surged due to concerns about drought in Brazil, grains such as corn, wheat, and soybeans continued to decline due to favorable growing conditions and increased harvest pressure in the Northern Hemisphere.
Wheat: Harvest Pressure Pulls Prices Down for Two Consecutive Sessions
Wheat continued its downward trend on Tuesday, with futures prices slightly declining across all three major exchanges. On the CBOT, soft red winter wheat fell slightly across most contracts. Hard red winter wheat in Kansas dropped 5-6 cents, while spring wheat in Minneapolis declined 6-8 cents.
The Crop Progress report shows that the harvest of winter wheat is at 53%, which is lower than the 5-year average (54%). The overall crop quality remains unchanged, but the quality of spring wheat has declined, with only 48% of the area rated good to excellent, down 3%.
In Europe, wheat exports for the 2023/24 season reached only 20.33 million tons - a sharp decrease from 31.07 million tons during the same period last year. In contrast, Russia is expected to increase its exports to 42.9 million tons.
Corn: Prices Hit Below 4 USD, Reaching a New Low for the Year
Corn prices fell 5–7 cents during the session, with the September contract dropping below the 4 USD/bushel threshold. Despite the announcement of an export order of 112,776 tons to Mexico, the market continues to be under pressure from favorable weather and abundant supply.
The area of corn reaching the tasseled stage is 18%, which is 3 points higher than the multi-year average. The quality of the season has improved slightly (74% good to very good), but there is a strong divergence between states: Iowa and Kansas have increased their scores while Illinois, Ohio, and Nebraska have decreased.
Soybeans: Widespread Decline Across Maturities Despite Export Orders
Soybeans dropped from 3 to over 10 cents across most futures. The USDA reported a shipment of 144,000 tons of soy meal to the Philippines, but it was not enough to drive prices back up.
As of the end of last week, 32% of soybean area has flowered and 8% has set fruit. Although the quality remains stable at 66% good to very good, some key states like Ohio and Illinois have reported declines, while the Western states have seen significant improvements.
Coffee: Prices Surge Again Due to Drought Concerns in Brazil
In contrast to the grain group, arabica and robusta coffee both saw a strong increase. The September futures contract for arabica rose by 2.64%, while robusta increased by 1.19%.
Prices are supported by forecasts of prolonged dry weather at Minas Gerais – the largest arabica growing region in Brazil. In addition, the global robusta inventories have diminished and Vietnam's coffee exports in the first six months of the year increased by 4.1%, which also helped to strengthen the upward trend.
However, the pressure factors still exist. The harvesting progress in Brazil is fast (reached about 40%), arabica stocks are increasing, and the global coffee production forecast for 2025/26 is set to a record 178.68 million bags – an increase of 2.5% compared to last year, with robusta up by 7.9%.
Source: Vietfutues compilation
