Market News

Wheat sharply higher on big drop in winter wheat production

Soybeans were higher on fund and technical buying. The USDA lowered U.S. old crop stocks with strong domestic crush canceling out lower exports and sees even tighter new crop supplies due to better export demand and further increases in crush due to margins and product demand expectations. On the export side of the issue, the U.S. and China have a high-level, face-to-face trade meeting later this week. It remains to be seen just how much interest Beijing has in old crop U.S. soybeans, but new crop might be a part of a potential deal. There was also some spillover during the session from crude oil due to the ongoing supply questions linked to the conflict in Iran. Stateside, the trade’s monitoring planting weather, which looks generally favorable in much of the region. Globally, not many changes to the 2025/26 balance sheet this month, aside from a slight increase for production in Paraguay. Soybean meal and oil futures were up on the strength in beans.

Corn was higher on fund and technical buying, in addition to the big gains in wheat. Old crop corn ending stocks were up slightly on the month because of a cut to food, seed, and industrial use, while new crop stocks could be lower because of a decline in production, in addition to USDA expectations for reductions in feed and residual use and exports. Just how many acres will actually be planted to corn this year is still somewhat of a question mark due to the low response rate to the USDA survey earlier this year, and there could still be some acres lost to beans. Planting conditions do generally look favorable in much of the Corn Belt. The USDA increased corn production estimates for Argentina and Brazil, bringing them more in-line with private guesses from both of those nations. Other adjustments included larger crops for South Africa and Ukraine and higher exports for South Africa, along with cuts to imports by China and the European Union, against gains in imports by Egypt and southeast Asia. CONAB’s updated outlook for Brazil is out Thursday, May 14^th, while the USDA’s next round of supply and demand numbers is set for June 11^th. Also, this week, the U.S. Energy Information Administration’s ethanol numbers are out Wednesday.

The wheat complex was sharply higher on fund and technical buying, with July Chicago and Kansas City both up the $.45 daily trading limit. The USDA is projecting a 25% year-to-year drop in winter wheat production on lower planted area and the drought in the Plains. As of May 1^st, the crop is seen at 1.047 billion bushels, the lowest in more than 50 years, with the lowest harvested area on record at 22.015 million acres, and a 7.3 bushel per acre decline in yield to 47.6 bushels per acre. That projection was below pre-report expectations, largely due to those drought issues in the Plains impacting the hard red winter crop and leading to increased abandonment. Changes to U.S. old crop ending stocks were minimal, while the domestic supply should be tighter next marketing year, which starts June 1^st. World wheat production and stocks were above a month ago. The USDA did raise production for Ukraine and the United Kingdom, while increasing exports for Russia and cutting exports for Argentina, Australia, and Canada. IKAR now has 2026/27 wheat exports by Russia at 46.5 million tons, up 2 million on the month.