Market News

Wheat extends gains on crop ratings, drought concerns

Soybeans were mixed, adjusting spreads. Planting is 23% complete, the fastest start to the season on record, and emergence is considerably ahead of the five-year average. There are still some uncertainties about the 2026 U.S. planted area total. Beans continue to wait for any fresh news about the expected trade meeting with China next month. That will hinge, at least to some extent, on what happens in negotiations about the conflict in Iran and the Middle East. China is a major trading partner of both the U.S. and Iran. The trade’s also watching harvest in Argentina, which could pick up speed thanks to a drier weather pattern. Soybean meal futures were mixed, adjusting spreads, and soybean oil was up sharply on the strength in crude oil. The USDA’s Foreign Ag Service office in the European Union says the European Commission is looking at phasing out soybeans as a biofuel feedstock by 2030, which would have an impact on U.S. soybean and soybean oil exports to the bloc.

Corn was higher on short covering and technical buying, along with the higher moves in wheat and crude oil. Planting and emergence are ahead of average, with generally favorable weather in most areas. That’s not to say there haven’t been issues, including rain missing some dry areas, excessive rain in parts of the region, and severe storms. How many acres will actually get planted this year is still up in the air. Argentina’s harvest is ongoing and parts of Brazil need rain, but most of the crop is still in good shape. The USDA’s next round of supply and demand estimates is out May 12^th, with CONAB’s updated outlook on Brazil set for May 14^th. This week, the U.S. Energy Information Administration’s ethanol numbers are out Wednesday. The status of year-round E15 continues to be a big question mark for the industry.

The wheat complex was sharply higher on speculative and technical buying. 35% of winter wheat is rated poor to very poor, up 2%, with mixed near-term rain chances in the central and southern Plains. It looks increasingly like hard red winter abandonment rates will be significant due to widespread drought. Additionally, there are some concerns about excessively wet conditions impacting soft red winter in parts of the eastern U.S. and spring wheat planting is slower than normal. Globally, the trade is monitoring the potential for freeze damage in parts of Russia and Ukraine, planting in Canada, and probable issues with fertilizer availability impacting planted area in Australia.