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Insight Focus
Wheat rallied on winter kill risks in the US and Russia, pulling corn higher. The only reasons for the market to trade higher are weather risks and trade tensions, which now appear to have dissipated. Corn is not yet planted and remains neutral to weather, likely tracking the grains complex led by wheat, with Chicago corn expected to trade in a USD 4.30–4.50/bushel range through Q1.
Last week, wheat rallied on risks of winter kill in the US and Russia and pulled corn higher.
Before weather risks emerged late last week, grains—and especially wheat—were trading lower on ample supply. Weather conditions across growing regions worldwide have been favourable, which should keep the market capped.
The only reasons for the market to trade higher are trade tensions (which now appear to have dissipated) and weather risk. This week’s focus will be on the potential risk of winter kill in wheat.
Corn is not planted and is therefore currently neutral to weather and will most likely trade in line with the grains complex, led by wheat. If potential wheat damage proves limited, we would expect some correction this week. Otherwise, we could see consolidation of last week’s gains or even further upside if damage turns out to be significant. We continue to expect Chicago corn to trade in a USD 4.30–4.50/bushel range throughout Q1.
There are no changes to our estimate for Chicago corn to average USD 4.18/bushel during the 2025/26 (September/August) crop, with some upside bias. The average price since September 1 is running at USD 4.27/bushel.
China Soybean Purchases Support Corn
Corn in Chicago traded basically sideways from the opening last Tuesday through Thursday following the US holiday on Monday. However, Chicago corn pulled higher on Thursday and Friday, driven by very cold temperatures expected in the US and Russia that could potentially damage crops. The weekly rally in corn was also supported by very strong weekly sales, which rose by a sizable +252% week on week.
Beyond weather issues, there was optimism that China would now buy the 25 million tonnes of US soybeans it committed to for 2026. In addition, Trump said he would not impose any further tariffs on some European countries and the UK after announcing them last week following the Greenland crisis.
The USDA confirmed that China has purchased the 12 million tonnes of US soybeans it committed to during 2025, which raised confidence that it will fulfil its 2026 commitment of 25 million tonnes during the year. This supported soybeans and the broader grains complex.
Trump then spoke at Davos, where he softened his tone on the Greenland crisis and walked back threats to impose 10% tariffs on some EU countries.
Summer corn planting in Brazil is 90.7% complete, compared to 87.1% last year and the five-year average of 85.7%. Summer corn harvesting is 4.4% complete, versus 4.4% last year and the five-year average of 6.5%. Safrinha corn planting has started and is 0.8% planted, up from 0.5% last year but lower than the five-year average of 2.5%.
Cold Weather Risks Put Wheat in Focus
Wheat was centre stage last week following forecasts of a very cold front across most of the US, raising concerns of winter kill, especially in areas without snow cover to protect planted wheat, such as Texas. Adding to the bullish weather-related news, very cold Siberian conditions are also expected to test wheat crops in Russia.
A major winter storm with snow and ice arrived in the US last Friday. Warm and dry weather is expected in southern Brazil and Argentina, while the rest of Brazil’s Centre-South is forecast to be very rainy. Heavy rain and cold weather are also expected in Western Europe, while temperatures in the Black Sea region are expected to increase.
