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Insight Focus
Corn has risen in Chicago on higher exports and lower yields. Wheat gained globally amid fresh demand, while limited US data keeps traders focused on farm-level yields. The USDA’s historical trends support the lower yields the market expects.
Data Gap Keeps Grain Markets Cautious
Corn in Chicago continues to trade sideways, lacking US fundamental data. We visited a couple of farms in Indiana last week, and farmers confirmed they are producing at break-even at best, and below the cost of production in the case of soybeans. The rumour that the corn yield from the last WASDE report is too high also continues.
Despite having almost no data from the USDA, some demand data is available. Export inspections through mid-October, at 368 million bushels, are up 61% year on year, while the latest WASDE projects only a 5% increase.
Source: USDA
The risk of lower yields also appears justified when looking at historical USDA behaviour. Since 1990, there have been eight years in which the USDA raised its yield forecast in August only to reduce it again in September, as it did this year.
The lack of fundamental US data continues to keep the market focused on the limited information available and on yield reports coming out of the farms. The long-term behaviour of the USDA would justify the lower yield the market is anticipating. We think the market will continue to trade in the USD 4–4.50/bushel range. Higher prices should be capped by 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 4.17/bushel.
Corn Gains on Stronger Exports and Ethanol Output
Corn in Chicago began last week positive after a surprise publication of US export data showed that export inspections were up 9.1% week on week. Strong ethanol production also contributed to the positive week.
Only weekly export data was published as the US government shutdown continues, leaving another week with no fundamental US data.
In France, corn conditions were 59% good or excellent, down one point week on week and versus 75% last year. Harvesting is 75% complete versus 23% last year and the five-year average of 63%.
Corn harvesting in Russia is 36.9% complete versus 82% last year. In Ukraine, it is 31% complete versus 67% last year.
Corn planting in Argentina is 33.8% complete, while summer corn planting in Brazil is 33.2% complete versus 32.3% last year and the five-year average of 34.4%.
Wheat Rallies on Fresh Demand from Algeria and Egypt
Wheat in Chicago rallied last week on fresh demand, with Algeria and Egypt launching tenders by midweek. This supported prices and triggered some short covering by speculative funds.
Russian wheat production was revised upward by IKAR to 88 million tonnes from 87.5 million tonnes previously.
BAGE in Argentina is forecasting wheat production to reach 22 million tonnes in 2025/26, compared with 18.6 million tonnes produced during the last crop.
Russian wheat is now fully harvested, and winter wheat planting is 81.3% complete. Argentinian wheat is 88% good or excellent, down two points week-on-week, and 5.3% harvested.
The US Corn Belt is expected to remain warm and dry, allowing a good pace of harvest operations. Brazil’s Centre-South region is also forecast to stay dry this week, while some rainfall is expected in Argentina. In Europe, the Black Sea region is expected to see mixed conditions with periods of rain and warm temperatures.
