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Insight Focus
Corn remains flat in Chicago. The market consolidated last week’s gains on fears of supply disruptions out of Ukraine, with the December WASDE expected to cut US corn yield. Despite short-term volatility, supply remains ample in both corn and wheat, keeping the market capped.
This week, the December WASDE report is due, with the market expecting a reduction in corn ending stocks for the new crop as well as lower wheat carry. The reduction in the corn carry comes mainly from lower yield expectations. The market should have already priced in lower corn yields, so if confirmed, we could see some downside unless the reduction is smaller than expected.
As well as the December WASDE, another market focus this week is the unlikely Chinese grain buying program. The Chinese committed purchases are impossible to fulfil—at least in terms of delivering the physical product—so only deals resulting in later deliveries will occur. Interestingly, China also bought 12 cargoes from Brazil and two from Argentina last week.
Beyond the short-term impact this week, supply remains ample in both corn and wheat, and the market should be capped. During this time of year, grains are stored and one begins to pay a premium, so any downside should be limited as well. We expect corn in Chicago to trade in a USD 4.10-4.40/bushel range through Q1’25.
There are no changes to our estimate for Chicago corn to average USD 4.18/bushel during the 2025/26 (September/August) crop. The average price since September 1 is running at USD 4.25/bushel.
Chicago Corn Steadies After Volatile Week
Corn in Chicago opened negative last week after the expressive rally of the previous week, but it was up again on Tuesday, consolidating the gains of the previous week and trading sideways during the rest of the week. It finally closed basically flat with small losses in the March futures contract.
The recovery came after Putin threatened to attack Ukrainian grain vessels after Ukraine was responsible for the explosion of three Russian oil tankers.
There is continued speculation about the Chinese buying plan, with believers and non-believers questioning whether 12 million tonnes of soybeans will be purchased from the US before the end of the year. On Friday, the USDA published fresh sales of soybeans to China, now accounting for 2.71 million tonnes of total exports — still far from the 12 million tonne commitment.
There was no crop progress report published in the US last week, but corn harvesting is virtually complete after the November 24 report showed that 96% of US corn had been harvested.
Harvesting in France is now complete, with conditions rated 59% good or excellent, unchanged on the week and well below last year’s 75%. Russia’s harvest is 75.7% complete compared with 94.9% last year, while Ukraine has reached 78% completion.
In Argentina, corn planting is 44% complete, with 82% of the crop rated good or excellent, unchanged week on week. Brazil’s summer corn planting is 65.9% complete, slightly ahead of last year’s 65.1% and the five-year average of 64.7%.
Wheat Rallies on Black Sea Supply Risks
On the wheat front, both US and European markets rallied, mostly on the back of the Russian threat of supply disruptions out of the Black Sea. This came despite ABARES in Australia once again revising its wheat production forecast upward to 35.6 million tonnes versus 33.8 million in the previous estimate and up 4.3% year on year.
US winter wheat planting is now complete. Wheat planting in France is virtually finished at 99% versus the five-year average of 96%, with conditions at 96% good or excellent—down one point on the week far ahead of last year’s 86%.
Ukraine’s winter wheat planting is 99.3% complete, essentially finished, while Russian wheat planting is 98.8% complete versus 100% last year. In Argentina, wheat harvesting is 45.3% complete, and in Brazil harvesting is 95.1% complete versus 97.7% last year and the five-year average of 94.8%.
On the weather front, warmer-than-average temperatures reached northwestern Europe, and together with rains are expected to persist this week, while the Black Sea region is expecting cold and dry conditions. Cold and rainy weather is also expected in the US. In South America, ample rains are forecast for Brazil’s centre-south and Argentina.
