Flat Reports, Sticky Rates, and the High-Stakes Summer Ahead

Why This Market Might Be Calm—But Not Safe

The June acreage report came in with barely a ripple. Big corn acres, fewer soybeans, no fireworks in the numbers.

But that’s not what has most operators uneasy right now.

The real story is simpler—and tougher: the cost of doing business hasn’t gotten any cheaper.

When interest rates spiked two years ago, the plan was to wait it out. Rates would come down, working capital would get easier, and the cost of carrying grain would normalize.

But here we are. Same rates. Same pressure. Same expectations that somehow, next quarter will be different.

Meanwhile, markets aren’t offering much relief:

• Corn is easy to store—but expensive to finance.

• Soybeans are the lone bright spot because of low acres and the biodiesel outlook—but they’re still waiting for a reason to rally.

• Cattle demand is strong, but cash is slowly dropping—and the trade is dangerously crowded with speculative length.
  

This is a year when “wait and see” might cost more than you think.

Corn: The Price of Patience

Nobody wants to lock in a low. So corn sits in bins, waiting for something—anything—to turn sentiment around.

But here’s the problem:

• The carrying costs are real.Every month of storage and every day of 8–9% operating notes eats away at margins that were already thin.

• Cash markets are stable, not desperate.If corn was genuinely scarce, basis would be telling a different story. It isn’t.

• Cheap feed and good weather aren’t helping. Soy meal is in freefall. Hay is abundant. Even a hot July probably won’t erase the surplus.

Translation: Holding corn is a bet—and the odds haven’t improved. If you haven’t updated your breakeven lately, it’s time.

Soybeans: The Only Chart With Real Potential

Soybeans are the quiet wildcard in this whole setup.

Plantings are at their lowest levels in nearly a decade. Seasonally, beans can stay sleepy right into late summer—until they suddenly aren’t.

• Weather is still in play. August heat or dryness could shift the tone fast.

Cattle: The Trade Is a Crowded One

For nearly two years, speculators have been all-in on cattle. So far, it’s worked.

But ask yourself: What happens when they finally decide to lighten up?

• Feed is cheap, which props up optimism—but also entices more buying at high prices.

• If futures correct, it could be fast, ugly, and unforgiving.

Consider this a friendly reminder: If you’re long cattle, puts are cheap compared to regret.

Sticky Rates: The New Normal

Most producers planned for high rates to be a temporary burden. They’d stretch credit lines, roll operating notes, and refinance when the Fed got around to easing.

Except the easing hasn’t come.

This is the pinch point:

• High rates aren’t shocking anymore—but they’re still draining liquidity.

• Every bushel stored is tying up dollars you can’t deploy elsewhere.

• Every day of waiting costs more than the last.

The Dollar: A Glimmer of Relief?

The US dollar finally broke lower, hitting levels we haven’t seen in over a year.

Keep watching currency. It’s the only near-term catalyst that could tighten the cash market without a weather event.

What to Do Next

Call us to go over grain plans for the rest of 2025 and 2026. We’ll help you evaluate storage costs, hedge ideas, and your cash flow strategy.

Final Thoughts

Quiet reports and flat markets are where complacency creeps in.

But if the last two years have taught us anything, it’s this:

Nothing stays flat forever—and the operators who prepare before the move are the ones still standing when the dust settles.