Insight Focus
Grains fell early, then recovered on lower corn output concerns. Markets are entering the spring weather phase, with focus on Northern Hemisphere corn planting and wheat conditions, while fewer corn acres in the US and Europe in favour of soybeans add uncertainty. These factors should maintain a risk premium, with only a quick resolution of the war in Iran likely to trigger a selloff. Otherwise, corn in Chicago is expected to consolidate at or above USD 4.5/bushel.
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There are no changes to our estimate for Chicago corn to average USD 4.18/bushel during the 2025/26 (September/August) crop year, with some upside bias to USD 4.25/bushel given possible lower production in the US. The average price since September 1 is running at USD 4.3/bushel.
All grains were down in an early-week selloff, dragged lower by soybeans, despite a later rally on concerns of lower corn production.
There is also a risk of fewer corn acres both in the US and Europe, in favour of more acres of less fertiliser-intensive leguminous crops like soybeans. The question is not if this will happen, but how many corn acres we will lose in favour of soybean acres.
Large farmers have most likely secured their fertilisers back in the autumn, but smaller ones that buy just before planting may be the ones to change their planting intentions. We will have to wait and see whether the loss of corn acres is material.
All these uncertainties should be enough to maintain some risk premium in the market. Only a quick resolution of the war in Iran could trigger a selloff. Otherwise, we expect corn in Chicago to consolidate at or above USD 4.5/bushel.
Corn Slips Before Stabilising on Supply Concerns
Corn in Chicago had a negative start to the week last Monday, with Trump delaying his meeting with Xi Jinping and soybeans plummeting on risks that Chinese soybean commitments may not materialise, dragging the whole grains complex down. It then rallied during the rest of the week, mostly after the Iranian attack on the largest natural gas field in Qatar, raising fears of a shortage of fertilisers.
The market was also animated by expectations that Trump will announce a strong biofuel package this Friday, as he has invited farmers and biofuel producers to the announcement at the White House.
Coceral in Europe published its estimate for corn production of 60.7 million tonnes, up from 58.9 million tonnes in its previous forecast and from 59.3 million tonnes last year.
Summer corn harvesting in Brazil is 34% complete, versus 40.1% last year and the five-year average of 33.1%. Safrinha corn planting in Brazil is 85.5% complete, versus 89.6% last year and the five-year average of 82.9%. Harvesting in Argentina is 13% complete.
Wheat Gains on US Drought Concerns
Besides the influence of soybeans on the grains complex, US wheat rallied last Tuesday following poor conditions published by the USDA, on fears the crop will come out of dormancy into dry soils in Kansas and Oklahoma. About 55% of US winter wheat is affected by drought, unchanged week on week.
Coceral in Europe published its estimate for wheat production of 142.6 million tonnes, down from 143.9 million tonnes in its previous forecast and much lower than the 148.7 million tonnes produced last year.
French wheat is 84% in good or excellent condition, unchanged week on week, versus 74% last year. It is the fourth week in a row with unchanged conditions.
The US is expected to experience warm and dry conditions, the opposite of South America, where ample rains are expected in Brazil and Argentina across most growing regions. Europe and the Black Sea region are expecting a cold and rainy front.
We are now entering the typical spring weather market, and all eyes will be on corn planting pace in the Northern Hemisphere and wheat conditions through harvesting. Low moisture in US growing regions is starting to raise concerns not only for wheat development but also for corn planting.
