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Insight Focus
Corn and wheat posted modest gains. Chicago corn was supported by a constructive WASDE and Brazil crop downgrade, while wheat rallied on winterkill fears. Soybean strength from Chinese buying also helped. Ample supply limits upside, and with spring approaching, we expect Chicago corn to trade in a USD 4.3–4.5/bushel range through Q1.
Small gains for corn in Chicago followed a supportive WASDE. The Brazilian corn crop was downgraded. Wheat rallied on persistent risks of winterkill, despite an upgrade to Russian production.
Part of the positive week in corn and wheat last week was driven by the rally in soybeans, thanks to new purchases from China and the expectation that the 20 million tonne commitment will be fulfilled. But there is ample supply in corn and wheat, and only some winterkill in the latter would justify higher prices.
We are now heading into the spring in the northern hemisphere, and milder temperatures will allow us to evaluate whether we really had winterkill or not. Although still early, soil moisture for corn planting is abundant. We don’t see a reason to justify higher prices. We continue to expect corn in Chicago to trade in a USD 4.3 to 4.5/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 4.28/bushel.
US Exports and Brazil Crop Cut Support Corn
Corn traded flat in Chicago during the first half of the week, even after the February WASDE published lower stocks. Thursday saw a small rally on the back of strong US exports and a downgrade of the Brazilian crop, followed by Friday consolidation, resulting in small weekly gains.
The February WASDE last Tuesday reduced US corn ending stocks by 100 million bushels, all coming from higher exports. This was somewhat expected, as we anticipated last week, but the market had been expecting a much smaller reduction of just 12 million bushels, according to a Bloomberg survey.
World corn stocks were reduced by 1.9 million tonnes, all coming from higher feed demand, as production was left unchanged.
Conab in Brazil reduced its corn production forecast to 138.4 million tonnes, or 1.9% lower than its previous forecast, due to 5% lower yields. This pushed the market higher last Thursday.
Brazil’s summer corn planting is almost complete at 97.1%, slightly ahead of last year’s 96.8% and above the five-year average of 95.7%. Summer corn harvesting stands at 11.4%, trailing last year’s 13.3% and the five-year average of 14.9%. Safrinha corn planting has reached 21.6%, ahead of last year’s 18.8% but still below the five-year average of 25.5%. In Argentina, corn planting has now finished.
Wheat Rallies on US Winterkill Fears
On the wheat front, Chicago rallied on worries about winterkill in the US, despite an upgrade to Russian production.
Source: USDA
A quarterly survey of analysts on Russian production delivered an estimate of 90.9 million tonnes of wheat production for the current crop versus 88.2 million tonnes in the previous survey.
France has resumed publishing its crop report following the winter pause, with 91% of the wheat crop rated good or excellent, well above last year’s 73% and ahead of the five-year average of 83%.
The February WASDE increased US wheat ending stocks by 5 million bushels, all coming from lower demand.
World wheat stocks were reduced by 740,000 tonnes, with immaterial changes in production: an increase of 300,000 tonnes in Argentina and 110,000 tonnes in the UK, and a reduction in consumption.
Source: USDA
On the weather front, dry weather is finally expected in Central-South Brazil, although the south should see some rains, as should Argentina, after two weeks of dry weather. Warmer-than-average temperatures are expected in the US, together with some rains by the end of the week. Europe will suffer severe winds and rain in the southwest, while rain is expected in the northwest. The Black Sea region is expected to turn cold again, once more risking winterkill.
