Posted on May, 15, 2025 at 05:25 pm
The US weather madness continues with severe storms predicted to roll through Wisconsin and into the northern part of Illinois. Additionally, temps are set to plummet in the Dakotas over the next 5-10 days. Winter wheat in the Black Sea region is receiving much-needed rainfall, though isolated frost events in northern areas may cause minor damage. Scattered showers across Europe this week are supporting wheat during the heading stage, although Germany remains largely dry. Drought conditions persist in North Africa, but some relief is expected with showers returning during the week, just as harvest begins — posing timing challenges. In China, winter wheat continues to face moisture deficits, with minimal rainfall forecast in the coming days.
Markets: Wheat is treading water in the US – with spreads to corn and the export path we should see demand move higher but this is always a slow burn. AUD feels like sentiment has shifted to a buy-the-dips but remains at the mercy of a Trump sound bite.
Australian Day Ahead: Rain is the best indicator at the moment – forecasts will be traded. Northern market finding some selling but without passion.
Wheat
Wheat futures in Chicago posted their strongest weekly gain on reports of wheat streak mosaic virus in central Kansas, with some fields potentially losing up to 10 bpa.
Despite this, winter wheat yields in central Kansas are expected to exceed last year, with generally healthy-looking fields.
In western Kansas, scouts reported cracking soils and dry conditions suppressing yield potential.
The USDA recently raised its hard red winter production forecast, and markets are watching to see if the crop tour supports this view.
HRW was reportedly trading into Southeast Asia and North Africa, but Algeria’s recent tender was awarded mostly to Romania/Bulgaria at US$244/t.
FranceAgriMer increased its 2024/25 soft wheat export forecast to 9.85 million tonnes (Mt), driven by stronger EU and non-EU demand, although this remains nearly 41 percent below the previous year. French wheat stockpiles were trimmed to 2.63Mt.
Other Grains and Oilseeds
Corn futures fell to their lowest since December as US planting progress reached 62pc, beating analyst expectations of 58pc.
USDA projects 2025/26 US corn stocks to rise 27pc year-on-year, adding bearish pressure despite the number falling short of trade estimates.
French corn exports were revised up slightly to 4.7Mt, and stockpiles increased to 3.47Mt. Ukraine’s corn exports are down 21.4pc y/y at 19.5Mt.
Brazil’s tight domestic corn stocks remain a factor as the USDA pegged its crop at 130Mt, while CONAB is expected to confirm a range of 124.8–131.7Mt.
Soybean prices rose to the highest since July 2024, driven by gains in soybean oil and support from a draft US bill to extend the 45Z biofuel tax credit to 2031.
The potential extension boosts demand for domestic feedstocks.
Soybean oil prices outpaced palm oil, widening spreads and making palm oil more competitive. Conversely, India’s April palm oil imports fell 24pc while soyoil imports rose slightly.
French barley export forecasts rose to 5.11Mt, while stockpiles fell to 1.16Mt.
Macro
US interest rate policy remains in a holding pattern. Fed Governor Jefferson said recent inflation data align with disinflation progress, but tariff-induced inflation risks complicate the path forward. He favours a patient stance while monitoring incoming data.
Chicago Fed President Goolsbee echoed the need to look past market noise, noting steady underlying data despite difficult conditions for households and businesses.
Trade policy remains a key driver. A temporary US-China deal has supported sentiment, especially in oilseeds, but effective tariff rates for Chinese exporters remain near 50pc due to legacy duties. The US is also engaged in new trade talks with Thailand aimed at avoiding a 36pc tariff, with agricultural imports a key discussion point.
Meanwhile, Japan ruled out including rice in its US tariff discussions, though corn and soybeans may serve as bargaining tools.
Markets await further clarity on US biofuel mandates, with potential implications for soybean crush and diesel margins.
Canola bids were firmer again in the west yesterday, with current crop bids at A$800 and new crop bids at $860, amid strong competition among buyers. Wheat was softer, with current crop at $349 and new crop at $360. Barley was also slightly lower, at $345 for current crop and $333 for new crop.
In the east, canola was stronger, with new crop bids reaching $820 and current crop at $785. Wheat was slightly firmer at $353, and barley held steady at $350.
GM canola bids remain well supported, with delivered Geelong/Melbourne bids at $770. New crop delivered Geelong/Melbourne conventional canola bids are at $840.
In its latest monthly report, GIWA estimated Western Australian farmers will plant 4.07 million hectares (Mha) wheat, 1.92Mha barley, and 1.73Mha canola. These figures are slightly lower than last month’s forecast of 4.19Mha wheat, 1.87Mha barley, and 1.775Mha canola. GIWA attributed the reduction to persistent dry conditions affecting the northern third of the state’s grain-growing regions.
Source: Grain Central