WHEAT

Wheat opened Monday’s session with notable gains, driven by rising geopolitical tensions and some short covering. July 2025 CBOT wheat futures opened at $5.34 per bushel, unchanged from Friday’s close but quickly gained 10 cents in early trade. Chicago SRW ended last week with mild losses, Kansas City HRW held relatively steady, while Minneapolis HRS continued to rally. A critical factor was Ukraine's strike on a Russian airbase, damaging strategic bombers—an event that spurred traders to reintroduce risk premiums for Black Sea instability. Meanwhile, export sales were mixed, with new crop bookings totaling over 711,000 metric tons, although reductions were noted for the current season. Managed money positions also showed decreased net shorts, signaling improved trader sentiment.

CORN

Corn opened Monday at $4.44 per bushel, down 3 cents from Friday but rebounding by 2¾ cents in early trading. Prices are finding support from the wheat market and an improved export outlook despite ending the previous week in decline. U.S. weekly corn export sales totaled 916,712 metric tons, with Japan, Mexico, and Colombia among the top buyers. Commitment of Traders data showed a modest reduction in net short positions. On the supply side, Brazil's 2024/25 corn output was revised up to 139 million metric tons by Safras & Mercado following favorable April and May rainfall, while AgRural pegged the crop at 128.5 million metric tons. Despite ongoing frosts, high output continues to pressure the domestic market.

SOYBEANS

Soybeans began the day weaker, trading down 2 to 5 cents, with July 2025 contracts opening at $10.41¾ per bushel, a 10-cent decline from Friday. Last week’s performance was subdued due to falling demand and weak crush margins. Export sales were disappointing, with just 146,034 metric tons in old crop sales—down nearly 56% from the previous year. Mexico remained the dominant buyer. Soymeal exports, however, surged to the highest since October. Meanwhile, managed money boosted long positions, possibly anticipating recovery. Domestic crush is expected to show a modest monthly decline in USDA’s report due later today, though still strong year-over-year.

Key Global Developments Impacting Today’s Market

India halved its import duties on crude edible oils such as palm, soybean, and sunflower oils, effective May 31. This move is expected to stimulate global demand and improve margins for domestic refiners while lowering local prices. Crude oil imports will now face an effective duty of 16.5%, down from 27.5%, a move likely to support global vegetable oil prices, especially given India's dependence on imports for 60% of its consumption.

Indonesia, the world’s top palm oil producer, announced a plan to introduce B50 biodiesel next year—blending 50% palm oil. This move may restrict exports and elevate global CPO prices, according to the country’s agriculture ministry.

The U.S. reported net export sales of 948,000 tons of corn, 179,000 tons of soybeans, and 583,000 tons of wheat for the week ending May 22, all notably down from the prior week. Mexico remained a key buyer across all commodities, but the decline reflects market hesitation amid weather and price volatility.

Weather remains a dominant factor across major agricultural regions:

• U.S. Northern and Central Plains are experiencing beneficial rains, aiding wheat fill and corn/soybean growth, but drought remains a concern in parts of the Northern Plains.

• In the Midwest, showers are forecast through mid-June, which should aid northern areas but may hinder progress in the south where soils are already wet.

• The Canadian Prairies continue to receive lighter-than-needed rains, putting pressure on early development.

• Brazil’s safrinha corn is receiving timely rainfall, but with harvest starting, the yield benefit may be limited. Southern wheat areas remain too dry.

• Argentina faced frosts over the weekend, which were not damaging but could slow winter wheat development.

• Europe has uneven rainfall, with southern and eastern areas increasingly dry while northern zones receive patchy showers. France remains at risk.

• The Black Sea region, particularly southern and eastern Russia, remains dry with ongoing soil moisture deficits. Although rains are forecast, the situation for reproductive wheat and early corn is precarious.

• Australia received scattered rainfall in the west, slightly improving conditions amid intensifying drought, particularly threatening winter wheat and canola.

• China saw continued dryness in the North China Plain, stressing filling wheat and young corn/soybean crops. Relief may come mid-month.

Brazil’s domestic corn prices continued to fall due to a rise in supply from the second crop harvest, with Cepea noting over-the-counter corn prices down 9.2% for the month.

Soybean prices in Brazil were stable to slightly lower through May. The CEPEA/ESALQ Index in Paranaguá declined 0.6%, closing at BRL 133.00/60kg bag, while Paraná prices were flat. Export pace remains healthy, but weak international crush margins and external tariffs are keeping upward pressure muted.

A legal dispute in Brazil involving Imcopa soybean crushing plants is deterring major traders like Bunge and Cargill from bidding. The assets are valued near $300 million, but complex litigation is delaying a resolution, which may impact soymeal and oil supply in the region.

Ukraine’s grain exports dropped 19% year-over-year, with corn shipments down 23%. Wheat exports also slipped 15%, continuing to weigh on Black Sea market fundamentals.

Russian Deputy PM Dmitry Patrushev warned that unless corrective actions are taken, Russia may lose its edge as the world’s largest wheat exporter. Export duties, weak profitability, and infrastructure bottlenecks have slowed shipments sharply compared to last year.

In Southeast Asia, Indonesia’s palm oil exports declined 5.37% in volume YTD, but rose 20% in value, highlighting higher prices. Meanwhile, Malaysia’s May palm oil exports rose nearly 18% month-over-month, driven by strong EU demand.

As trading opens for the week, global grain markets face a convergence of bullish geopolitical risk, volatile weather, and government policy shifts. These developments will shape both physical and futures trading in the coming days.