This update is from Nixal Commodities. For more information, CLICK HERE.
Insight Focus
Corn and wheat rallied globally on soybeans and Black Sea disruptions. Beyond the short-term impact of the January WASDE report, the market remains well supplied, with favourable weather across all major producing regions. We continue to expect Chicago corn to trade in a USD 4.3–4.5/bushel range throughout Q1, with upside limited to weather or geopolitical risks.
Corn and wheat rallied in all geographies, pulled higher by soybeans and supply disruptions out of the Black Sea. The rumour last week was that China bought fresh volumes of US soybeans and has completed purchases of 10 million tonnes of US soybeans, therefore getting closer to the 12 million tonnes it had committed to.
We have two elements influencing the market this week: the January WASDE and funds continuing to rebalance their positions. The latter should simply bring some volatility, but corn will be in the spotlight as there are very divergent views on what the corn yield will be.
Beyond this, the reality is that the market is well supplied. All producing regions are experiencing favourable weather, and no major impact on grain production is expected. This should put a cap on the market, with upside risk limited to weather or geopolitical developments. We continue to expect Chicago corn to trade in a USD 4.30 to 4.50/bushel range throughout Q1.
There are no changes to our estimate for Chicago corn to average USD 4.18/bushel during the 2025/26 (September/August) crop, with some upside bias. The average price since September 1 is running at USD 4.28/bushel.
Corn Strength Driven by Soybean Rally
Corn in Chicago rallied last Monday and was able to consolidate the gains, trading sideways during the rest of the week and posting weekly gains of almost 2%. The Monday rally originated in soybeans, with rumours spreading that China bought as much as 10 million tonnes of US soybeans out of the 12 million tonnes it has committed to.
European grains rallied on increasing tensions in the Black Sea region, and corn also made weekly gains of 2% on Euronext.
Further support came from the geopolitical front, with Russia attacking Ukrainian port infrastructure, which is causing a slowdown in grain exports
Corn planting in Argentina is 89.1% complete, down from 92.3% last year, and 75% is rated good or excellent. Summer corn planting in Brazil is 88.3% complete, compared to 83.7% last year and the five-year average of 83.1%.
Wheat Supported by Black Sea Export Slowdown
Wheat also rallied both in the US and Euronext, mostly influenced by slow exports out of Ukraine and fears of variable weather damaging US wheat.
Argentinian wheat is 98.5% harvested, while Brazilian wheat is fully harvested.
Rains are expected this week in Brazil’s centre-south and in Argentina. US grain regions are expected to see rainy and cold weather, with snow in the north. Europe will continue to suffer a cold wave, together with rain and snow, including in the Black Sea region.
