Wheat

Wheat futures opened Tuesday in the red, with July 2025 CBOT wheat contracts starting the session at $5.42½ per bushel, down 2 cents from Friday’s close, and slipping a further 8 cents in early trade. The market’s recent gains—17½ cents last week for Chicago SRW and over 33 cents for Minneapolis spring wheat—were tempered by profit-taking and light positioning post-holiday. Pressure came from a combination of rain across much of the Plains over the weekend, which eased crop stress in dry areas, and commitment of traders (CFTC) data showing a reduction in net short positions in both Chicago and Kansas wheat. Still, signs of persistent dryness in hard red wheat areas and the spring wheat belt in the Dakotas continue to raise production concerns, particularly as managed money trims extreme short positions. Despite fundamental risks, broader global supply comfort and competition weigh on sentiment.

Corn

Corn futures faced modest declines at Tuesday’s open, with the July 2025 contract starting at $4.59½ per bushel, down 3½ cents from Friday and trading 1 cent lower in early morning action. The market is facing spillover pressure from the wheat complex and cautious positioning after last week’s 16-cent rally. The CFTC reported that speculators added over 18,000 contracts to their net short position in corn, taking the total to more than 103,000 contracts as of May 20. Meanwhile, Brazil’s second crop harvest has begun slowly in Mato Grosso and Paraná, with AgRural estimating only 0.9% harvested so far. Although forecasts show favorable development, dryness in central areas and frost risks in southern regions are raising uncertainty. Domestic corn cash prices in the U.S. have pulled back, while Taiwan's tender for 65,000 MT signals ongoing export demand. Market attention is also drawn to U.S.–EU trade relations following the deferral of a potential 50% tariff on EU goods to July 9.

Soybeans

Soybeans were the relative outperformer Tuesday morning, with July 2025 futures opening at $10.60¼ per bushel and climbing 5 cents in early trade. Friday’s session ended lower by 7¼ cents, but the week still closed up 10¼ cents overall. Strength in soybean meal and resilience in global demand have supported sentiment. Despite the latest Commitment of Traders report showing managed money cut their net long position by 25,753 contracts, speculative participation remains solid. Brazil’s 2024/25 crop forecast was raised by Datagro to 172 MMT—slightly higher than the previous estimate—while U.S. crop planting continues at a steady pace. In the cash market, prices pulled back slightly, but soyoil futures held gains, reflecting continued interest from the biodiesel and food processing sectors. Overall, soybeans remain the most stable leg of the grain complex amid global feed demand and oilseed processing dynamics.

Key Global Drivers for Today’s Trading Session

Weather remains at the center of grain market developments worldwide. In the U.S., weekend precipitation across the Plains and Midwest helped improve soil conditions in some drought-stricken zones. However, heavy rain in already saturated areas—such as parts of the Delta and Lower Mississippi—caused flooding and raised concerns over delayed planting and disease pressure. Forecasts for the rest of the week point to persistent showers and cooler temperatures, though warmer weather is expected by the weekend.

In the Northern Plains, the return of rainfall has boosted soil moisture and relieved some drought concerns, especially in North Dakota. However, the upcoming system on Monday night and Tuesday is expected to bring widespread showers, which could slow down field progress. Similar weather dynamics are in play in the Canadian Prairies, where a mostly dry week is helping farmers finish planting, though another round of rain is expected next week—potentially beneficial for crop establishment.

The Black Sea region is seeing more rain, particularly in Ukraine and parts of Russia. While showers may help mitigate early-season drought deficits, longer-term dryness still threatens yield potential in key areas like Rostov and Krasnodar. Russia’s Agriculture Ministry is optimistic about a larger grain harvest this year, but logistical and infrastructure challenges remain significant. Ukraine’s season-to-date grain exports are down 17%, with May shipments alone 43% below last year, highlighting structural bottlenecks and reduced demand from traditional buyers.

In South America, Brazil’s corn harvest is advancing slowly due to earlier drought stress and the onset of cooler temperatures. Patchy frosts are forecast in Parana later this week, raising concerns over yield loss. Meanwhile, soybean markets in Brazil are showing signs of recovery, with prices up slightly in the past week as producers hold off on selling in hopes of further gains. Soy oil demand remains strong, fueled by biodiesel processing, although soymeal values have softened slightly amid increasing supply.

Argentina’s situation is cautiously improving. Heavy weekend rains were followed by more favorable weather, allowing for field recovery and planting progress. The Rosario grains exchange remains optimistic, projecting the second-best wheat crop on record at 21–21.2 MMT, assuming continued favorable soil conditions. The government extended its wheat export tax reduction, aiming to boost profitability and encourage investment.

In Asia, China’s wheat regions are expected to benefit from improved rainfall this week, helping to ease drought in Henan and Shaanxi provinces. Authorities have urged local agencies to accelerate harvesting and crop drying to avoid losses ahead of expected downpours. China also continues to increase imports of oilseed meal, particularly from Russia and Ukraine, reflecting broader efforts to diversify sources amid geopolitical tensions and shifting domestic crop dynamics.

India is also seeing rapid developments. The monsoon arrived early this year—its earliest onset since 2009—boosting expectations for strong kharif crop sowing, particularly for rice and sugarcane. However, soybean acreage is expected to shrink as farmers shift toward corn and sugarcane, which offered better returns last season. This may increase India’s imports of vegetable oils, notably palm oil and soyoil, in the second half of the year.

Elsewhere, Australia’s wheat belt continues to struggle with below-normal rainfall, despite a few light showers. Dryness and developing drought conditions are threatening winter wheat and canola establishment, making the end-of-May and early June period critical for sowing success.

On the policy and investment front, Deere & Co. announced its first move into drone technology with the acquisition of Sentera, a remote imagery provider. This move highlights the growing integration of automation and precision agriculture, particularly as labor shortages and data-driven farming become increasingly vital.

As of this morning, grain futures reflect a marketplace recalibrating around a complex web of global influences—weather forecasts, geopolitical trade risks, export data, and longer-term production signals. Caution and adaptability remain the dominant themes for traders and producers alike.