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By: Mike Castle, Market Intelligence - Fertilizer Analyst
July 24 – Stocks have turned mixed into midday, with the tech-heavy Nasdaq in the red while the Dow Jones and S&P 500 trade higher. Much of the recent weakness has centered on the tech sector as traders scrutinize the ongoing heavy AI expenditure, with the Nasdaq touching a new low since early May this morning, while other sectors continue to perform well. Meanwhile, the VIX is cooling into midday as it hovers around the 17.9 level at the time of writing. The dollar is effectively unchanged on the day near 101.4 after spiking to a fresh three-week high yesterday. Treasuries are taking a bit of a breather after the recent sharp rise in yields but remain elevated, with 10-year yields at 4.67% and 2-year yields at 4.32%. Crude oil is reversing course from its three-week surge as well, with nearby WTI down ~4.2% on the day to trade near $88.50 and nearby Brent down ~4.8% to trade near $95.80 at the time of writing. Traders will be keeping a close eye on potential escalations in the Middle East over the weekend, balancing reports of renewed attempts at peace talks against ongoing threats from both sides. The ags remain largely mixed, with soybeans and meal in the green but much of the remaining complex in the red, most notably on the wheat side which we’ll dive into in more depth below.
New home sales data came in much stronger than expected in this morning’s release, with June showing a seasonally adjusted annualized rate of 628k, above the average analyst estimate of 610k, while May was revised sharply higher to 618k from the 580k originally reported. Regionally speaking, the South saw the biggest jump, rising 9.9% month-over-month, followed by the Northeast (+3.6%), and Midwest (+2.5%). This improvement was dragged down a bit by a 22.4% decline in the West. The uptick in demand may be a reflection of builders offering discounts and additional incentives, with the median sales price of a new home edging down to $398,300 in June from the $412,000 seen in the month prior, while also representing a 2.7% discount compared to last June. Meanwhile, applications for building permits fell 2.6% month-over-month in June to a seasonally adjusted annualized rate of 1.374M. This is up slightly from the preliminary estimate of 1.367M released earlier this month but still represents a three-month low.
The U.S. service sector showed unexpected strength in July, with S&P Global’s Flash PMI headline reading jumping to an 8-month high at 53.6, well above expectations, largely due to the Services PMI surging to 53.6 versus expectations of a much more modest bounce to 51.5 from the final 51.2 June reading. Before we get too excited, however, it’s worth noting that this may be a one-off impact reflecting a sharp uptick in business relating to the hosting of the World Cup and celebrations marking the 250th anniversary of the U.S. earlier in the month. It will be more meaningful to see if this momentum is sustained in the months ahead.
The manufacturing side of the index was a little less impressive, with S&P Global’s Manufacturing PMI flash reading coming in at 53.8, a slight dip from June’s final 53.9 and coming in below the average estimate of a continued rise to 54.3. While this is a slowdown from the recent strength seen through the spring, it’s worth pointing out that this would be above any of the readings seen for the index throughout the entirety of 2024 and 2025, as the manufacturing sector continues to show signs of overall positivity in 2026. While there were slowdowns in production and new orders, we did see a renewed increase in factory employment.
Reuters is reporting that Ukraine’s Agriculture Minister Taras Vysotskyi has denied reports of official discussions regarding alternative mechanisms to ensure grain exports through the Black Sea following morning headlines on the topic that triggered a sharp selloff throughout the global wheat complex. This adds to the ongoing theme of geopolitical headline whiplash that the broader commodity markets have seen thus far in 2026. The wheat complex has pared losses from the morning lows in the wake of this report, but remains sharply in the red on the day, taking a bit of a breather from the recent run-up in response to the escalations seen in the Black Sea region. The market now enters the weekend with plenty of uncertainty ahead, looking for signs of what comes next.
Elsewhere in Europe, top E.U. corn producer France’s crop ratings continue to deteriorate amid their ongoing hot, dry stretch, with AgriMer showing a 3% week-over-week decline to peg the crop at only 38% good/excellent. These are now the lowest French corn ratings seen at any time in our records, as illustrated in the graphic below (though it’s worth noting our data only goes back to 2020). As can be seen, this is a dramatic 53% drop from the lofty 91% good/excellent seen back in mid-May as the crop got off to an excellent start. Since then, France has seen its hottest and driest 60-day stretch on record, as illustrated in the below graphics courtesy of Commodity Weather Group. Forecasts don’t show much relief on the way for France either, with another heatwave seen moving through in the 6-15 day window and minimal chances for rainfall during this time. While the up-front focus regarding the disruptions to grain shipments through the Black Sea has been primarily on the wheat side, it’s worth keeping in mind the potential for additional U.S. corn export demand to the E.U. in the months ahead if Ukrainian logistics remain disrupted for an extended period.
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U.S. corn exports could gain support as Black Sea disruption and weaker European production redirect buyers toward alternative suppliers. Rising Brazilian ethanol demand may further strengthen the competitive position of US corn in the 2026 and 2027 marketing year.
July 24 – Stocks have turned mixed into midday, with the tech-heavy Nasdaq in the red while the Dow Jones and S&P 500 trade higher. Much of the recent weakness has centered on the tech sector as traders scrutinize the ongoing heavy AI expenditure, with the Nasdaq touching a new low since early May this morning, while other sectors continue to perform well. Meanwhile, the VIX is cooling into midday as it hovers around the 17.9 level at the time of writing. The dollar is effectively unchanged on the day near 101.4 after spiking to a fresh three-week high yesterday. Treasuries are taking a bit of a breather after the recent sharp rise in yields but remain elevated, with 10-year yields at 4.67% and 2-year yields at 4.32%. Crude oil is reversing course from its three-week surge as well, with nearby WTI down ~4.2% on the day to trade near $88.50 and nearby Brent down ~4.8% to trade near $95.80 at the time of writing. Traders will be keeping a close eye on potential escalations in the Middle East over the weekend, balancing reports of renewed attempts at peace talks against ongoing threats from both sides. The ags remain largely mixed, with soybeans and meal in the green but much of the remaining complex in the red, most notably on the wheat side which we’ll dive into in more depth below.
July 24 – Stock futures edged higher overnight, as traders focus on earnings reports, despite escalating tensions in the Middle East, Black Sea and in global trade. The VIX is trading near 19 this morning, while the dollar index trades near 101.5. Yields on 10-year Treasuries are trading near 4.69%, while yields on 2-year Treasuries are trading near 4.34%. WTI crude oil pulled back to trade near $90 per barrel, while Brent trades near $98 per barrel, as traders take profits despite further escalation of the war ahead of the weekend. Grain and oilseed prices put in new highs for the move overnight, before breaking lower early this morning on signs of possible negotiations to reopen exports in the Black Sea Region.
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