Insight Focus
Grains have recovered on China demand and European heat. France corn area is down 19%, while speculation over Chinese buying and sustained heat in Europe provided support despite broader supply pressures. Volatility is expected ahead of the June 30 planting report, as higher US acreage could push prices below USD 4/bushel, though continued European heat may offer short-term support.
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There was a recovery in grains last week after almost four consecutive negative weeks, which was mostly due to spec longs exiting positions built since the start of the war in Iran. Now fertiliser usage appears to be a non-event for US corn, while it has resulted in lower corn area in France, and we will probably still see some kind of reduction across the rest of Europe.
But the focus now turns to the June 30 planting intentions report from the USDA, and the question is whether we will see fewer corn acres or not. S&P estimated last week corn area at 96 million acres, which is above the latest WASDE figure of 95.3 million acres. This would suggest US farmers did not change their planting intentions despite expensive fertiliser.
Expect some volatility this week ahead of the June 30 planting intentions report, which, combined with favourable weather, could place further pressure on corn if the market anticipates higher acreage. However, extreme heat for a second week in a row in Europe should provide some support. Higher acreage in the US would justify a sub-4 USD/bushel market, in our opinion.
There are no changes to our forecast for Chicago corn to average USD 4.4/bushel during the 2025/26 (September/August) crop. The average price since September 1 is running at USD 4.36/bushel.
Corn Rebounds on China Rumours
After an initial sell-off following crude last Monday in Chicago corn, the market recovered following rumours that China had bought US soybeans, and further support came after corn area in France was confirmed lower and extreme heat was again forecast in Europe. The Monday sell-off in Euronext was not fully recovered and the week was negative, but corn in Chicago posted weekly gains.
The USDA showed beans exported to unknown destinations increased, and the belief that these were Chinese purchases supported the market late last week, with expectations that the Chinese commitments announced by Trump will finally be fulfilled.
Source: USDA
Another supportive piece of news came from Europe, where the French Ministry of Agriculture projected corn area sharply lower at 1.3 million hectares (ha), down from 1.44 million ha previously and 19% lower than last year, as farmers have chosen less fertiliser-intensive crops, shifting to sunflower and other leguminous crops. This had been signalled by farmers’ associations some time ago, blaming the rise in fertiliser prices, but has now been confirmed by the government.
There was no fresh data on new cases of screwworm in the US, so fears of lower feed demand somewhat disappeared.
US corn is now virtually fully planted, with conditions at 68% good or excellent, up one point week-on-week but still behind last year’s 72%. Corn condition in France stands at 84% good or excellent, down two points on the week but slightly ahead of last year’s 83%. Corn planting in Ukraine is 99% complete, just behind last year’s fully planted pace. Summer corn harvesting in Brazil is 90.4% complete, lagging last year’s 92.5% but broadly in line with the five-year average of 90.1%. Safrinha harvesting is 6.7% complete, well ahead of last year’s 3.9% but still slightly behind the five-year average of 7.3%.
Wheat Gains Despite Stronger Outlook
Wheat also posted weekly gains in Chicago, following corn and soybeans, despite improvements in US wheat conditions and higher production expected in Europe, which was the reason for Euronext closing the week unchanged.
The latter came after Coceral in Europe increased its wheat production forecast to 143.7 million tonnes, up 1.1 million tonnes from its previous forecast, although still down from 150.8 million tonnes last year.
US winter wheat is 25% harvested versus 9% last year and the five-year average of 13%. Conditions were 27% good or excellent, up two points week-on-week and versus 52% last year. US spring wheat planting is now complete and is 55% good or excellent, up three points week-on-week and versus 57% last year.
French wheat is 76% good or excellent, down one point week on week versus 68% last year. Ukraine spring wheat planting is complete. Wheat planting in Brazil is 59.5% complete versus 51.7% last year and the five-year average of 52.7%.
Heat is expected to persist and even increase in northwest Europe, moving up towards the Nordics. US weather is expected to bring regular rainfall again across the Midwest, with cooler temperatures improving soil moisture and benefiting corn development. Brazil is expected to be warm and rainy again in the Centre-South.
