Wheat

Wheat futures began the week under pressure, with July SRW Chicago contracts closing at $5.31¼, down 11¾ cents. Despite a strong finish on Friday and a boost from Taiwan’s 68,650 MT wheat purchase, speculative short positioning weighed heavily. The Commitment of Traders report showed net shorts rising to over 121,000 contracts—an 11-month high—indicating traders continue to bet against the market. USDA export inspections for the week showed a sharp drop to 310,326 MT, down 42% from the week prior. Mexico and the Philippines led destinations, but weekly shipments fell below both the previous week and the same period last year. Weather-wise, U.S. spring wheat planting reached 44%, ahead of the 5-year average, while winter wheat conditions slightly improved to 51% good/excellent. Meanwhile, Russia's crop outlook was raised by IKAR to 83.8 MMT, amplifying global competition.

Corn

Corn contracts closed significantly lower on Monday, with July futures settling at $4.54¼, down 14¾ cents. Prices crumbled under the weight of improved planting weather across the Corn Belt and solid progress in Brazil’s second corn crop. U.S. planting reached 40%, ahead of the 5-year average, and emergence is progressing faster than expected. USDA reported corn export inspections of 1.61 MMT, slightly below the previous week but nearly 24% above last year. Mexico, Japan, and Colombia led the way. In Brazil, Celeres raised its crop estimate to 135.4 MMT, reinforcing the supply outlook. Additionally, managed money trimmed bullish bets and oil prices weakened, further pressuring the corn complex.

Soybeans

Soybeans joined the downturn, with July futures closing at $10.45½, down 12½ cents. Export inspections showed 324,101 MT shipped, down 29% from the previous week. China, Japan, and Mexico were the top buyers. Despite solid crush margins and earlier export optimism, soybeans are facing pressure from expanding Brazilian supply and fading demand for soybean oil, especially in biofuel production. USDA pegged U.S. soybean planting at 30%, above average pace, with emergence at 7%. StoneX increased Brazil’s soybean estimate to 168.4 MMT due to strong yields in Mato Grosso. Argentine harvest progress remains smooth, and sellers remain active in spot markets, holding back term contract volume as they await firmer prices.

Key Global Market Drivers

Weather challenges persist in Ukraine. A mix of hard frosts, rapid heatwaves, and continued dryness in April stressed spring crops. The sowing pace reached 3.2 million hectares by May 2, but the country’s Agriculture Ministry warns that precipitation in May and June will be crucial for yield resilience.

In Brazil, the transition into the dry season is official. While corn benefits from residual wet-season soil moisture, the upcoming wheat planting season hinges on sporadic rain chances this week. A cold front expected soon could offer some relief to southern fields.

Argentina reported drier conditions over the weekend, supporting corn and soybean harvests. However, forecasted fronts this week may bring disruptive showers. These could delay harvest progress, but improve soil moisture for the coming wheat sowing.

Malaysia’s palm oil stockpiles surged 15% in April—marking the highest jump in 20 months—driven by post-holiday production recovery and favorable weather. A stronger Malaysian currency and weakening global macro indicators may suppress palm and soy oil prices further.

Brazilian corn saw a sharp 9% price decline in April amid low domestic demand. With solid weather and abundant second-crop expectations, sellers are keen to unload while buyers anticipate further softening.

Soybeans in both Brazil and Argentina face price pressure from high inventories and strong harvest progress. Brazil's harvest was at 94.8% by April 26. CEPEA indices reported declines across soybeans, soymeal, and soyoil in April, with export premiums narrowing.

Russia’s Novorossiysk grain terminal remained fully operational after a Ukrainian drone strike. No infrastructure damage was reported, though the incident underscores the fragility of Black Sea grain flows amid escalating conflict.

Japan, in its ongoing trade discussions with the U.S., proposed increased imports of corn and soybeans, potentially opening new demand lanes for American exporters as Chinese demand fluctuates.

Indonesia reported 4.3 million kiloliters of biodiesel consumption from January through April, driven by industrial use. This supports soy and palm oil demand despite bearish price signals.

U.S. livestock production edged higher last week—pork up 2.3% and beef up 0.8%—but year-to-date levels remain lower. Feed grain demand may remain subdued until processors expand capacity.

Weather trends across U.S. agricultural regions remain split. The Northern Plains are drying out again, risking renewed drought concerns, while Southern Plains are saturated with rainfall, increasing flood risks and stalling fieldwork.

Europe experienced widespread weekend rains, aiding early planting. Southeastern Europe will see continued showers this week, while the north stays dry and conducive to progress.

The Black Sea region received beneficial rain in the northwest, but dryness continues in southern and eastern parts. Further disturbances this week could improve soil moisture, but frost threats persist in Belarus and northwest Russia, where wheat development remains delayed.