Insight Focus
There is no change to our Chicago corn forecast at USD 4.55/bushel. A late-week rally erased early losses, helped by optimism in US-China trade talks and supportive weather data. Global planting is mostly complete, and the upcoming WASDE report may revise US ethanol demand upward, tightening old crop stocks.
The June WASDE will be released this Thursday, and we continue to believe US corn demand for ethanol could be revised higher, tightening old crop ending stocks. French wheat conditions continued to deteriorate for the third consecutive week, and we think the consequences of the very dry spring in some areas of northwestern Europe have not yet been reflected in production figures.
Northwestern Europe will be warm and dry again this week, with similar conditions expected in the Black Sea area. The US is expected to have ample rains again, which could delay fieldwork but leave good moisture levels for the summer. Argentina will remain cold and dry, and Brazil will see dry weather in the centre-west, while the centre-east is expected to receive favourable rains.
We expect the market to remain supportive, with some upside risk in the very short term, but wheat harvest pressure should weigh on prices during the next few weeks.
There is no change to our forecast for Chicago corn for the 2024/25 crop (September/August) to average USD 4.55/bushel, with some downside risk depending on the trade war. The average price since September 1 is running at USD 4.47/bushel.
Chicago Corn Rebounds Late After Early Losses
It was a mixed week for corn, with old crop corn negative in all geographies while new crop corn was flat or positive. September Chicago corn futures rallied since the start of last week, posting strong weekly gains.
The USDA said last Tuesday that showers and thunderstorms slowed late-season fieldwork in parts of the Midwest, which was likely behind the small recovery after last Monday’s fall. Last Friday’s rally might have been fuelled by optimism in US-China trade talks, with both presidents speaking over the phone and sending positive messages. Progress is expected soon, which likely drove the soybean rally last week and pulled corn higher as well.
US corn is 93% planted vs. 90% last year and the five-year average of 93%, and conditions are 69% good or excellent, up one point week on week. In Argentina, corn harvesting is 43.8% complete. In Brazil, Safrinha (second) corn harvesting is 0.8% complete – well behind last year’s 3.7% and the five-year average of 2.1%. The summer corn crop is 89.6% harvested, slightly ahead of 85.2% last year and the five-year average of 86.1%.
French corn planting is virtually finished, with 99% planted vs. 89% last year. Its condition was 85% good or excellent, flat week on week and slightly improved on 80% last year. Corn planting in Ukraine is also 99% complete.
Geopolitical Tensions Lift Wheat
Wheat rallied in Chicago last week but was unchanged on the Euronext. The EU failed to renew a deal permitting duty-free imports of Ukrainian wheat, which expired on Friday. Duty-free imports will now be just 1 million tonnes.
Wheat had a positive week both in the US and Euronext, despite harvesting having started in the US and conditions improving. But Ukraine attacking Russia, and expected retaliation, gave support to the market.
France’s wheat condition was 69% good or excellent, down 1 point week on week and versus 62% last year. US wheat is 3% harvested vs. 5% last year and the five-year average of 5%. US wheat condition was 52% good or excellent, up 2 points in the week and compared with 49% last year. US spring wheat is 95% planted compared with 93% last year and the five-year average of 90%.
