Insight Focus
Euronext corn surged on heat, while Chicago weakened last week. Extreme heat has driven a sharp divergence, with French corn conditions falling and US weather remaining broadly favourable, limiting Chicago gains. Focus now turns to the June 30 USDA acreage and stocks report, where acreage estimates range from 95.1 million acres (neutral) to 96 million acres (bearish) versus 95.3 million acres in the latest WASDE.
Weather Market Intensifies as Heat Hits Europe and US
Euronext corn has rallied on extreme heat. French corn conditions have plummeted, while Chicago booked another negative week on favourable weather.
Now is the time to assess the impact of the record heat wave in Europe on corn yields. However, rains are expected by mid-week, which could be enough to recover soil moisture. Some areas in the US Corn Belt are also expected to experience excessive heat this week.
On top of weather, the focus this week will be on the June 30 acreage and quarterly stocks report by the USDA. The question is whether we will see a surprise in acreage, as a Bloomberg survey is estimating 95.1 million acres for corn, while an S&P analysis is projecting 96 million acres. This compares with 95.3 million acres in the latest WASDE. The Bloomberg survey would be neutral for the market, while the S&P number would definitely be bearish.
That same Bloomberg survey showed stocks as of June 1 projected at 5.4 billion bushels of corn (+16.5% year on year), 1.05 billion bushels of soybeans (+4.2% year on year), and 931 million bushels of wheat (+8.9% year on year).
The acreage report will say nothing about yields, but the July WASDE next week has the potential to change corn yields. The last WASDE showed 183 bushels/acre, down from 186.5 bushels/acre last year. However, weather has been favourable and fertiliser should no longer be an issue, so there is a chance of higher yields in the coming WASDE.
Expect a volatile week, with heat in Europe and the US, and the June 30 acreage report and quarterly stocks likely to shake the market. Higher acreage in the US would justify a sub-USD 4/bushel market, in our opinion.
There are no changes to our forecast for Chicago corn to average USD 4.4/bushel during the 2025/26 (September–August) crop. The average price since September 1 is running at USD 4.35/bushel.
Chicago Corn Falls While Euronext Surges
Corn in Chicago opened negative last Monday on perfect weather in the US and traded negatively throughout the week, except for a Thursday rally on the back of heat forecast for this week. However, the Thursday rally was not enough to offset early weekly losses, and corn closed the week more than 1% lower.
This contrasted with Euronext, where extreme heat in northwestern Europe raised concerns about the impact on corn yields, and the market rallied right after Monday’s opening, posting weekly gains of just below 10%.
On the positive side, fertiliser exports through the Strait of Hormuz have picked up. From almost zero during the war, Kepler reported some 530,000 tonnes shipped last week. Urea prices have also plummeted along with Brent. As corn requires partial fertiliser application after planting, farmers who had not secured it will now be able to buy at normal prices.
US corn condition stands at 68% good or excellent, unchanged week-on-week and below last year’s 70%. Corn condition in France is 76% good or excellent, down eight points week-on-week and also lower than last year’s 81%. Corn planting in Ukraine is complete, while planting in Russia is nearing completion at 98.6%.
Summer corn harvesting in Brazil is 93.7% complete, slightly behind last year’s 94.5% but ahead of the five-year average of 92.3%. Safrinha harvesting is 11% complete, ahead of last year’s 10.3% but still below the five-year average of 15%. Corn harvesting in Argentina is 51.2% complete.
Wheat Markets Soft as Harvest Accelerates
Wheat felt harvest pressure both in the US and Europe, and the rally in European corn only helped to limit wheat losses, which were mild compared with US wheat.
This was despite SovEcon downgrading Russian wheat production by 1.6% to 88.9 million tonnes, all coming from lower spring wheat area. It forecasts 25.8 million hectares, which would be the lowest area since 2014.
US winter wheat is 40% harvested, well ahead of last year’s 18% and the five-year average of 24%. Condition stands at 26% good or excellent, down one point week on week and significantly lower than last year’s 49%.
US spring wheat condition is 54% good or excellent, down one point week-on-week and in line with last year. French wheat is 74% good or excellent, down two points week-on-week but above last year’s 68%. Harvesting is now 7% complete, well ahead of just 1% last year and the five-year average.
Russian spring wheat planting was 87.6% complete, lagging behind last year’s 100%. Wheat planting in Brazil is 74.3% complete, well ahead of last year’s 56.6% and also above the five-year average of 64.2%.
Alternating periods of rain and sunshine will continue in the Midwest over the next 10 days, but intense heat is expected in the central Midwest. Northwestern Europe is expected to continue suffering from heat, but rains by mid-week should provide some relief to soil moisture, with similar conditions expected in the Black Sea region. Brazil is expected to be dry and cold, with a risk of frost in some regions, while Argentina is expected to be rainy and cold.
