Insight Focus
Corn fell last week on higher supply and favourable weather. Wheat gains on lower US production, while the June WASDE remains bearish for corn and supportive for wheat. With war risk fading and ideal weather ahead, upside looks limited, though weather risks, acreage uncertainty, and consolidation may offer intermittent support.
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Corn fell again on higher global supply and perfect weather, while wheat rose on lower US production. The June WASDE was bearish for corn and supportive for wheat.
It was another week of exclusively bearish news for corn, and the COT published last Friday confirmed that spec long liquidation from the previous week was the reason for the sell-off. Large long positions were built after the war in Iran started, and it appears the market has now eliminated that risk premium.
We think all negative news has been priced in, but with the WASDE projecting a yield of 183 bushels/acre in the US, almost 2% lower year on year and left unchanged last week, very favourable weather could force an upgrade to the yield forecast this summer, which would be bearish.
Before the July WASDE, the June 30 planting intentions report is the next key release, with uncertainty around whether we will see fewer corn acres.
The market hasn’t turned bearish, but with war risk gone, urea prices down significantly and perfect weather expected over the next two weeks, upside risk should be limited. That said, corn is in its full development stage, so any adverse weather would be supportive. Likewise, rumours or estimates of lower US acreage ahead of the June 30 report could provide support. We would now expect some consolidation after last week’s bearish news.
There are no changes to our forecast for Chicago corn to average USD 4.4/bushel during the 2025/26 (September/August) crop, with the average price since September 1 at USD 4.36/bushel.
Bearish WASDE and Weather Pressure Corn
Corn in Chicago opened sideways last week, but it sold off after the publication of the June WASDE, which came accompanied by a perfect weather forecast in the US, new cases of screwworm in the US threatening feed demand, and Trump saying he would not extend the trade agreement with Mexico and Canada, both major buyers of US ag goods. This all resulted in a negative week.
The June WASDE showed US corn ending stocks 3 million bushels higher at 1.96 billion bushels, a bit higher than the 1.95 billion bushels expected by the market, and all of it came from an upward revision to old crop stocks of that same amount.
In addition to higher US stocks, world stocks were revised upwards too by 3.68 million tonnes to 281.2 million tonnes, and half of that increase came from an upward revision of beginning stocks of 6.4 million tonnes, with the rest coming from higher production. The changes were in the 2025/26 crop, with Argentina up by 2 million tonnes to 61 million tonnes, and Brazil up by 3 million tonnes to 138 million tonnes.
Source: USDA
BAGE in Argentina left its estimate unchanged at 64 million tonnes, still above the USDA number. Conab in Brazil increased its summer corn crop estimate by 800,000 tonnes to 29.3 million tonnes, resulting in a small increase to overall production, now at 140.5 million tonnes. This is still above the USDA number.
The only supportive information came from Coceral downgrading its corn estimate in EU+UK by 3 million tonnes to 57.2 million tonnes, down from 60.2 million tonnes, but this was very much in line with the WASDE number of 57.5 million tonnes.
The USDA also warned of new cases of screwworm in cattle and goats, and as a result, Canada restricted Texas livestock imports. The number of infected animals is small but concerns about a spread of the worm forcing culling of animals would be negative for feed demand, of which corn is an important part.
To complete the bearish news, Trump said he would not renew the trade agreement with Canada and Mexico on July 1, risking ag exports to those countries. Meanwhile, the weather forecast for the next two weeks in the US looks perfect, posing no risk to the USDA’s yield projection.
US corn is 97% planted, slightly higher than 96% last year and in line with the five-year average of 96%, and condition is 67% good or excellent, unchanged week on week and below 71% last year. Corn condition in France is 86% good or excellent, up two points week-on-week and slightly higher than 85% last year.
Corn planting in Ukraine is 98.9% complete, slightly lower than 99.3% last year. Russian corn planting is 95% complete, broadly in line with 95.1% last year. Summer corn harvesting in Brazil is 87.7% completed, lower than 90.6% last year and slightly below the five-year average of 88%. Safrinha harvesting is 3% complete, higher than 2% last year but slightly below the five-year average of 3.8%.
Wheat Resilient on Lower Yields and Stocks
Wheat was immune to the negative week in corn, with the WASDE reducing US and global stocks.
The June WASDE reduced US ending stocks by 18 million bushels, all coming from a downgrade in yields of 0.5 bushels/acre to 47 bushels/acre, while world stocks were left unchanged.
In Argentina, the Rosario Stock Exchange revised its wheat production forecast up to 20 million tonnes versus 18.5 million tonnes previously.
In Germany, the farmers’ association DRV revised its production projections slightly up to 22.63 million tonnes, although this was still 2.2% lower year on year.
US winter wheat is 11% harvested versus 4% last year and the five-year average of 6%. The condition was 25% good or excellent, down one point week on week and versus 54% last year. US spring wheat planting is 98% complete – on par with last year and the five-year average of 95%. It is 52% in good or excellent condition, up five points week-on-week, and in line with last year.
French wheat is 77% good or excellent, up one point week on week versus 70% last year. Ukraine spring wheat planting is completed. Russia spring wheat planting is 84.6% complete versus 99.1% last year, and winter wheat planting is 11% complete. Wheat planting in Brazil is 45.3% complete versus 42% last year and the five-year average of 44.7%.
Heat is expected to return to northwest Europe, moving up to the Nordics. US weather is expected to be perfect, with regular rainfall across the Midwest, leaving soil moisture in optimal conditions for corn development. Brazil is expected to be warm and rainy in the Centre-South, which will extend to northern Argentina, but the Pampa will remain dry.
