Insight Focus
It was a mixed week for corn prices due to diverging crops. Wheat fell on harvest pressure and ample supply, while the June WASDE cut old crop corn stocks but left wheat unchanged. With wheat harvests starting and US corn planting nearly complete, we expect volatility ahead but limited upside.
It was another mixed week for corn, with old crop prices up but new crop ones down in Chicago, while Euronext fell. Wheat fell in all geographies due to harvest pressure and ample supply. The June WASDE cut old crop corn ending stocks and left wheat ones unchanged.
We believe the USDA’s June WASDE was neutral for the market, despite the reduction in US old crop corn stocks, which was mostly anticipated. Wheat harvest has now begun in the Northern Hemisphere and should continue to put further pressure on prices.
On the corn side, planting in the Northern Hemisphere is nearly complete and weather conditions in the US are favourable, although Europe may see surprises in areas affected by dryness. Expect continued weather-driven volatility, but any price upside should remain capped.
There is no change to our forecast for Chicago corn for the 2024/25 crop (September/August), which is expected to average USD 4.55/bushel, with some downside risk depending on the trade war. The average price since September 1 is running at USD 4.47/bushel.
Corn Prices Rebound After WASDE, Crude Rally
US corn condition improved significantly last week, triggering good selling last Monday. However, the market recovered on Tuesday and Wednesday on speculation about what would be published in the June WASDE on Thursday. A Friday rally, largely macro-influenced, followed crude after Israel’s attack on Iran.
The June WASDE report reduced US corn ending stocks of the old crop by 100 million bushels, all coming from higher exports. There was no increase in corn demand for ethanol, as we were expecting. New crop ending stocks were reduced by the same 100 million bushels, all coming from the higher exports of the old crop. Old crop stock-to-use is tight at 8.9%, while the new crop is expected to be 11.3%. Global stocks were reduced by 2.6 million tonnes, all due to higher demand.
Source: USDA
Argentinian production was unchanged at 50 million tonnes, compared to BCR in Argentina forecasting 48.5 million tonnes and BAGE 49 million tonnes. Conab in Brazil increased its corn production forecast to 128.2 million tonnes, up from 126.8 million tonnes previously.
Several producing regions in Russia have declared emergencies due to severe drought and spring frost. The region of Rostov has lost more than 500,000 hectares, and other regions have also been impacted. However, as of now, the agricultural ministry has not downgraded its crop estimates, which seems inconsistent with the loss of area.
Coceral projected EU+UK corn production at 63.6 million tonnes, up from 59.7 million tonnes harvested last year.
US corn is 97% planted versus 94% last year and the five-year average of 97%. Conditions are rated 71% good or excellent, up two points week-on-week. In Argentina, corn harvesting is 46.7% complete. In Brazil, Safrinha (second crop) corn harvesting is 2% complete vs. 7.5% last year and the five-year average of 2.1%. The summer corn crop is 90.6% harvested vs. 88.1% last year and the five-year average of 88.1%.
French corn planting is now officially finished. Conditions are rated 85% good or excellent, flat week-on-week and up from 80% last year. Corn planting in Ukraine is complete. In Russia, corn planting is 95.5% complete.
Wheat Prices Drop on Weak Demand
Wheat fell sharply last week in both Chicago and Euronext due to good crop conditions and weak demand. EU wheat exports since the beginning of the old crop year are down 33% as of June 8, with only data through June 30 still pending. A sizable decline is already evident.
In the US, wheat harvesting slowed last week, likely due to field access issues following recent rains. However, crop conditions improved for both winter and spring wheat, pushing prices lower early in the week.
The positive outcome of US–China trade talks offered some support to soybeans and corn, but not to wheat.
Coceral projected EU+UK wheat production at 143.1 million tonnes, significantly up from 126.3 million tonnes last year. The June WASDE report reduced US wheat ending stocks by 25 million bushels, all from higher exports. Global stocks were raised by 1 million tonnes, while production was left basically unchanged.
Source: USDA
French wheat condition was rated 70% good or excellent, up 1 point week-on-week and compared to 62% last year. US wheat is 4% harvested vs. 11% last year and the five-year average of 7%. Conditions for US wheat were 54% good or excellent, up 2 points week-on-week and compared to 47% last year. US spring wheat is now fully planted, with conditions rated 53% good or excellent, up 3 points on the week and compared to 72% last year.
Sovecon raised its 2025 wheat production forecast for Russia once again, to 82.8 million tonnes as of June 9 — up 1.8 million tonnes from the previous estimate.
The US Corn Belt is expected to see high temperatures along with ample rain, which will help maintain good moisture levels heading into summer. Argentina will experience warmer temperatures and ample rainfall, while Brazil will see dry weather in the Centre-West, typical for this time of year. Northwestern Europe will be warm and dry with limited rain, while the Black Sea region is expected to have rain and mild temperatures.
