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Insight Focus
Chicago corn has rallied on lower yield expectation as Europe traded sideways. Limited US data has markets relying on uncertain figures and pricing in smaller yields. The US–China trade dispute remains key, though ample supply caps upside potential.
With the lack of official US data, the market is focusing on less reliable sources and appears to be pricing in lower corn yields. The US-China trade dispute is another focal point. If an agreement is made, this could generate positive sentiment for the market, supporting prices but any downside risk has likely already been priced in. In any case, any upside should remain limited given ample supply.
There are no changes to our estimate for Chicago corn to average USD 4.18/bushel during the 2025/26 (September/August) crop year. The average price since September 1 is running at USD 4.16/bushel.
Corn Rallies on Lower Yield Expectations
Corn in Chicago rallied on expectations of lower yields, while European grains traded sideways.
After a negative start to the week last Monday for Chicago corn, the market rallied during the second half of the week on rumours that farmers are reporting lower corn yields. The rally was probably fuelled by the large net speculative short position, triggering some short covering.
Another week passed without fundamental data from the US due to the government shutdown, but some analysts and farmers appear to be reporting lower-than-expected corn yields. This is something the market was already anticipating for the October WASDE, which has not been published, and now it seems the market is pricing it in.
CONAB in Brazil once again revised its corn production forecast slightly upward to 138.4 million tonnes, up from 138.3 million tonnes previously, compared with 141 million tonnes produced last year. Summer corn planting is 31.2% complete versus 28.8% last year and the five-year average of 30.7%.
In France, corn conditions were 60% good or excellent, down two points week-on-week and compared with 78% last year. Harvesting is 56% complete versus 13% last year and the five-year average of 50%. Corn harvesting in Russia is 28% complete, while corn planting in Argentina is 29.9% complete.
Wheat Follows Corn with Modest Weekly Rise
Wheat in Chicago followed corn, but only modestly, with weekly gains of just 1%.
The French Agriculture Ministry has slightly reduced its wheat production forecast to 33.2 million tonnes, down from 33.3 million tonnes in its previous estimate but this is neutral for the market.
Winter wheat planting in France is 27% complete versus 10% last year and the five-year average of 22%. Russian wheat is 95.6% harvested, winter wheat planting in Russia is 72.2% complete, wheat planting in Ukraine is 59% complete, and Argentine wheat is 89.9% good or excellent, down from 96.4% the previous week.
On the weather front, the US Corn Belt is expected to remain warm and dry, allowing harvest operations to continue. Brazil’s Center-South region is expected to receive rainfall during the second half of the week, as is Argentina. Mild temperatures and mostly dry weather are expected in northwestern Europe, while the Black Sea region should receive some rain.
