Insight Focus
Welcome to our monthly overview of the soybean, corn and wheat markets. Here, we provide a summary of key events that happened in May and provide some details on what to look out for this month.
Forward View
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Tightening global supply and reduced export availability are expected to support wheat, with volatility driven by geopolitics and trade disruption risks.
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Barley markets will likely continue to follow broader grain dynamics, with weather, input costs and wheat price movements shaping direction.
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Expanding soybean supply and uncertain Chinese demand may pressure prices, while corn remains more volatile as supply risks, energy markets and global competition pull prices in both directions.
Wheat
The global wheat market was volatile in May due to heightened geopolitical risks and rapidly shifting trade dynamics, but also a tightening supply outlook. Across the month, prices moved decisively higher following a series of bullish signals, most notably the release of the USDA’s first 2026/27 WASDE projections on 12 May, which confirmed a tightening global balance sheet.
A key turning point came with the WASDE report, which projected global wheat ending stocks at 275.04 million tonnes for 2026/27, significantly below pre-report expectations. This decline reflected not only reduced forward stocks but also a downgrade to existing inventories, reinforcing concerns that the period of abundant global supply may be ending.
At the same time, global production is expected to fall materially, with estimates indicating a drop from 843.84 million tonnes in 2025/26 to around 819 million tonnes in 2026/27, driven by lower acreage and weaker crop conditions in major exporting regions.
The upward pricing momentum was further supported by deteriorating crop conditions, including drought in the US, where only 31% of the hard red wheat crop was rated good/excellent, alongside uncertainty around rainfall in Europe.
However, the bullish supply outlook was complicated by demand-side nuances and evolving trade flows. While global consumption was broadly stable in official forecasts, there are indications that higher prices may begin to erode demand in some regions, particularly as US wheat becomes less competitive. Indeed, one of the most notable developments in May was the emergence of atypical trade patterns that highlight the extent of price dislocations across origins.
Geopolitics remained a dominant force throughout the month, amplifying both price volatility and structural uncertainty. Ongoing conflict in Ukraine continued to disrupt Black Sea export infrastructure, while tensions in the Middle East—particularly the effective closure of the Strait of Hormuz—raised concerns over fertiliser availability, energy costs and shipping logistics. These factors not only increased production costs for farmers but also threatened the smooth functioning of global trade routes, contributing to rapid price swings.
At the same time, export competition remained intense despite tightening fundamentals. Russia maintained strong export volumes, supported by policy measures such as reduced export taxes, while Argentina and Australia’s large 2025/26 crops ensured ample supply for Asian and Middle Eastern buyers earlier in the season.
Nevertheless, expectations of reduced export availability in 2026/27 across the major exporters point to a more constrained and less competitive market environment ahead.
Barley
Throughout the month, barley markets were notably influenced by external factors rather than purely crop-specific fundamentals, reflecting their close integration within global feed and malting grain markets.
Ongoing conflict in the Middle East, alongside the continued war in Ukraine, contributed to elevated energy and fertiliser costs. This, in turn, supported barley prices and injected significant volatility into markets, as producers and traders faced rising input costs and logistical uncertainty. These dynamics mirrored developments in other grains, with barley closely following wheat’s swings.
Improved rainfall in parts of Europe eased earlier dryness concerns and supported crop development during a critical growth phase. However, production expectations remain below last year. Elsewhere, persistent wet conditions in Russia disrupted planting and raised concerns over yields and crop quality, while Canada and Australia also faced lower production prospects due to delayed planting or reduced acreage.
Major importers such as China and Saudi Arabia had already secured significant volumes from the 2025 crop, reducing immediate buying activity. Nevertheless, limited farmer selling and tighter old-crop availability helped underpin prices, particularly for feed barley.
Soybeans
Brazil continued to dominate in global soybean trade. The country recorded a monthly export record of 16.75 million tonnes in April, supported by a record harvest of around 180 million tonnes and improved logistics. China remained the key buyer, absorbing 69% of Brazil’s exports, reinforcing Brazil’s role as the primary supplier to global markets.
Source: Comex
Lower domestic prices and currency movements initially enhanced competitiveness, although appreciation of the Brazilian real in April narrowed the price advantage against US exports.
In contrast, US export performance weakened during May. Shipments remained below year-earlier levels due to earlier weak Chinese demand. Although expectations of renewed Chinese purchasing commitments supported market sentiment, no new agreements materialised during the mid-May US–China summit, contributing to lingering uncertainty.
Source: USDA Global Agricultural Trade System
From a broader fundamental perspective, the May USDA WASDE report pointed to continued expansion in global soybean supply. Production across major exporters (Brazil, the US and Argentina) is forecast to increase in 2026/27, driven by higher planted areas and productivity gains. Brazil is expected to lead growth with output rising to 186 million tonnes, while US production is projected at 120.7 million tonnes.
Source: USDA
However, demand signals were more mixed. While USDA projections indicate continued growth in Chinese imports, alternative forecasts from China’s CASDE suggest a potential decline in soybean demand linked to reduced hog herd sizes and weaker crushing activity.
Corn
Early in the month, corn prices rallied on weather-related risks and rising input costs. Concerns that rain in the US Corn Belt could delay planting, combined with elevated fertiliser prices driven by geopolitical tensions, raised the prospect of reduced acreage and lower yields across the Northern Hemisphere. These supply-side anxieties were reinforced by persistently high fertiliser costs, which were expected to limit application rates and negatively impact productivity, even if weather conditions improved later in the season.
Source: World Bank
However, as May progressed, rapid planting progress across key regions eased concerns about delayed seeding. US corn planting advanced strongly, helping to stabilise supply expectations. At the same time, a sharp fall in crude oil prices reduced upward pressure on fertiliser and energy costs, dragging grain markets lower and prompting a broad sell-off.
Mid-month, attention turned to the USDA’s May WASDE report, which provided a supportive fundamental backdrop. The report projected lower US yields, reflecting the impact of higher input costs. It also forecast a tightening balance sheet, implying a lower stock-to-use ratio and a global stock draw. These figures initially triggered a price rally, particularly in the first half of the month.
Nevertheless, demand-side uncertainty quickly offset this support. Expectations of increased Chinese purchases of US agricultural products boosted sentiment temporarily, but the absence of concrete commitments led to profit-taking and renewed price weakness later in the month. At the same time, larger South American supply added downward pressure on global prices.
