Crop Recap – Monday, May 12 Closing Prices (Chicago, July 25 Contracts)

Wheat

Wheat futures faced downward pressure again on Monday, closing at $5.15¼ per bushel for the July 25 contract, down 6½ cents. This decline extended a week-long trend of losses, with SRW prices falling more than 21 cents. The USDA's Crop Production report pegged winter wheat output at 1.382 billion bushels—above expectations—and weighed on sentiment. Despite this, condition ratings improved to 54% good/excellent, and export inspections reached 405,170 MT for the week, with the Philippines and Mexico being top destinations. Nevertheless, elevated global stocks and a lack of fresh demand continued to drag prices lower.

Corn

Corn futures also settled lower on Monday, with the July 25 contract ending at $4.48, down 1¾ cents. While planting progress has been strong—62% complete versus a five-year average of 56%—and emergence is ahead of schedule, bearish pressure stemmed from USDA’s projection of a record U.S. crop at 15.82 billion bushels. The balance sheet update showed old crop carryout dropping by 50 million bushels due to increased exports, while the new crop outlook suggests sizable stocks at 1.8 billion bushels. Brazil’s forecast was raised by 4 MMT to 130 MMT, while Argentina’s held steady at 50 MMT. Global export demand for U.S. corn slipped slightly this week, but the year-to-date pace remains over 28% ahead of last year.

Soybeans

Soybeans were the standout performer, surging 19½ cents to close at $10.71¼ per bushel on the July contract. The rally was driven by strong export inspections—426,077 MT this week—alongside improved optimism surrounding U.S.–China trade talks and bullish USDA data. U.S. planting is now 48% complete, well ahead of last year’s 34%. The WASDE report showed a decrease in old crop ending stocks to 295 million bushels and a new crop production forecast of 4.34 billion bushels, aligned with expectations. Strong demand from Egypt, Mexico, and Indonesia supported the bullish tone, while the global carryout projection for 2024/25 rose to 123.18 MMT, up slightly from the prior estimate.

Global Highlights and Key Market Drivers

The biggest market-moving news came from Geneva, where the United States and China reached a 90-day tariff truce, reducing duties to 10% for U.S. goods entering China and 30% for Chinese goods entering the U.S. This breakthrough eased trade tensions and sparked investor optimism, particularly for U.S. soybean and wheat exports. Market sentiment improved as traders began repositioning in anticipation of stronger bilateral flows.

China’s wheat import pace accelerated, with between 400,000 and 500,000 metric tons purchased from Australia and Canada. These are China’s first Australian wheat buys since last year, prompted by a heatwave in Henan province, a key growing area. Traders viewed this as a return of opportunistic buying amid rising weather risks.

In Brazil, government discussions with China gained momentum on a massive infrastructure project—a railway linking the Chancay port in Peru with Brazil’s interior. If realized, it would cut shipping distance to China by over 6,000 miles and transform the regional logistics landscape, reinforcing Brazil’s grain export efficiency and its growing influence as a global supplier.

Brazil’s soybean export momentum is expected to recover after a slow start to the season. Shipments to China were down 37% between September and January due to low inventory, but the 2025 harvest is now estimated at 169 million tons. This could push annual exports to a record 108.3 million tons. According to Safras & Mercado, 57% of the crop has already been sold, with 2025/26 forward sales also accelerating.

On the corn side, Brazil’s prices continued to fall as a stronger harvest outlook and a weakening dollar pressured domestic values. Purchasers are holding back on deals in anticipation of further price drops, while April corn exports reached 178,000 tons—170% higher than the previous year.

In Argentina, mixed weather supported harvest activities while helping improve moisture levels for winter wheat planting. The Buenos Aires Grain Exchange raised its soybean forecast to 50 million tons. However, future rainfall remains essential to sustain yield potential in both current and future crops.

Ukrainian grain sowing reached 4.32 million hectares, or 76% of projected spring planting. However, analysts at APK-Inform downgraded the 2025 harvest forecast by 3.8% due to lowered corn yield expectations. Exports for 2025/26 are now estimated at 40.9 million tons, down from the earlier 42.6 million.

India’s crop outlook brightened with monsoon rains expected to arrive on May 27—five days earlier than normal. This is the earliest onset in five years and is crucial for half of India’s farmland, which depends solely on monsoon rainfall. The early rains could result in robust plantings of rice, corn, soybeans, and other summer crops, easing regional food security concerns amid ongoing geopolitical tensions.

In the United States, weather varied widely. Warm and dry conditions in the Northern Plains favored planting progress, though upcoming storms may bring heavy rain. The Midwest saw warming trends ahead of potential late-week storms. The Central and Southern Plains remained mixed in temperature and precipitation, while the Lower Mississippi Valley stayed saturated. These conditions continue to shape planting timelines and yield potential.

European crop prospects improved as rainfall spread across France, Spain, and Poland. However, Germany experienced continued dryness, raising concerns about moisture stress if rains do not materialize soon. In the Black Sea region, showers improved soil moisture, though cold air posed localized frost risks.

Finally, speculative positioning showed traders trimming their net short exposure in wheat and reducing net long positions in corn and soybeans. The positive tone following the U.S.–China tariff deal helped stabilize markets, setting a cautiously optimistic tone for the rest of the week.