Insight Focus
Grains plunge as crude oil drags markets lower. European heat worsens wheat conditions, while attention shifts to the June WASDE and whether the US corn yield of 183 bushels/acre will be maintained or revised lower. Uncertainty over corn acreage and challenging European weather should support a partial recovery, with Chicago corn expected to consolidate around USD 4.5/bushel.
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Oil Drop Drags Pressures Grains
Grains plummeted, dragged lower by crude oil. The heatwave in Europe worsened wheat conditions.
All grains opened on the defensive last week on falling oil prices, following optimism over a peace deal. Only Euronext corn had a positive week on record high temperatures in Europe, but the rally in the June Euronext future was due to the expiry this Friday and players exiting their positions.
Expectations of a peace deal between the US and Iran sent Brent prices plummeting, which dragged soybean prices down and the whole grains complex with it. Together with a lack of bullish grain fundamentals, this resulted in a negative week.
The selloff extended through the week, and even worsening wheat conditions in the US and France did nothing to stop the fall. US wheat conditions are the worst in many years, and scorching temperatures in Europe resulted in a two-point reduction after being unchanged since the beginning of the condition reports. Germany has not yet reported worsening conditions, but we think they will come. The mentioned hot weather in Europe will also have a negative impact on corn conditions, which is now almost fully planted.
The focus now turns to the June WASDE, due next week, and once more whether the 183 bushels/acre corn yield in the US will be maintained or revised lower. The June 30 acreage report provided no clarity on corn acreage. These uncertainties, coupled with challenging weather in Europe, should be enough for grains to recover some of last week’s losses. We continue to expect Chicago corn to consolidate around the USD 4.5/bushel region.
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 4.37/bushel.
Corn Pressured by Oil-Led Decline
Corn followed the broader grains complex lower, pressured by falling crude oil.
The European Commission projected corn production at 60.3 million tonnes vs. 61.2 million tonnes previously, basically unchanged year on year.
US corn is 86% planted, in line with last year and above the five-year average of 83%. Corn planting in France is virtually finished. Corn planting in Russia is 80.6% complete, below 83.6% last year. Corn planting in Ukraine is 94.1% complete, compared with 97.4% last year. Summer corn harvesting in Brazil is 80.7% complete, behind 86.9% last year but close to the five-year average of 83.2%. Safrinha harvesting has started and is 0.1% complete, below 0.3% last year and the five-year average of 0.5%.
Wheat Price Weakens Despite Poor Crops
Wheat plummeted as well as corn, even after US and French conditions worsened, but the impact of falling crude oil weighed more on the market.
The European Commission projected wheat production at 126.9 million tonnes, down from 127.3 million tonnes previously and down 6% year on year.
US winter wheat is 26% in good or excellent condition, down one point week on week and well below 50% last year. US spring wheat planting is 86% complete, in line with last year and above the five-year average of 79%. French wheat is 78% good or excellent, down two points week on week but above 70% last year and the five-year average of 71%.
Ukraine spring wheat is 99.7% planted, slightly behind 100% last year. Russia spring wheat planting is 63.8% complete, below 73% last year. Wheat planting in Brazil is 32.1% complete, ahead of 30.6% last year and slightly above the five-year average of 30.8%.
