The grain markets closed Wednesday with a steady to mildly positive tone across major crops. Traders evaluated fresh weather outlooks, ethanol production boosts, and subtle shifts in global trade sentiment. While volatility remained subdued, sentiment was shaped by rising stocks in palm oil, geopolitical trade reshuffling, and mixed regional crop conditions.

Wheat prices strengthened slightly as the July 2025 CBOT contract closed at $5.43¼ per bushel, up 7¼ cents. The day began cautiously, but all three major U.S. wheat futures contracts ended higher, with Chicago SRW gaining 6–8 cents, Kansas City HRW up 3–4 cents, and Minneapolis spring wheat advancing 5–6 cents. Despite early week concerns, U.S. export activity—although expected to show a net reduction—did not weigh heavily on futures. Weather forecasts calling for heavier rains in the Southern Plains and Eastern Corn Belt suggested harvest delays, but also potential benefits for crop quality. Meanwhile, Egypt’s interest in sourcing wheat from outside Ukraine and Russia due to ongoing conflict indicates logistical shifts in global wheat trade.

Corn futures saw muted gains on Wednesday. The July 2025 contract settled at $4.38¾ per bushel, up ¼ cent. Market support came from explosive ethanol data, with weekly U.S. ethanol production reaching 1.105 million barrels per day—matching March highs—and export levels surging to an eight-week peak. Despite the bullish biofuel numbers, corn’s upside was capped by competitive pressure from Brazilian supply, with ANEC estimating June corn exports at 835,660 MT, below last year’s levels. Expectations for upcoming U.S. export sales remain cautiously optimistic, while weather in the Midwest continues to challenge late planting and crop establishment in saturated regions.

Soybeans closed Wednesday with modest strength as the July 2025 CBOT contract ended the day at $10.45 per bushel, gaining 4¼ cents. Soymeal and soyoil saw mixed performances, and traders balanced U.S. planting progress against drier forecast pockets in key Midwest areas like Nebraska and Iowa. Export sales projections ranged widely, with the market awaiting new figures. Brazilian June soybean exports are expected at 12.55 MMT, slightly below last year's 13.83 MMT, which may provide minor support to U.S. futures in the near term.

Across the global grain complex, key developments shaped the macro picture:

In the U.S., agricultural sentiment continues to rise, as the Purdue University/CME Group Ag Barometer reached 158 in May. Both current condition and future expectation sub-indices posted gains, suggesting that producers are growing more optimistic in light of stable planting progress and favorable pricing.

Weather forecasts across key global production zones present a patchwork of opportunity and concern. In North America, most spring crop areas are expecting beneficial rains over the next 10 days, while the Canadian Prairies are becoming critically dry. The Northern and Central Plains are expected to benefit from cooler temperatures and increased precipitation.

In South America, Argentina’s Pampas region remains dry and cold, with recent frost events affecting winter wheat establishment. In contrast, Brazil’s stalled front could bring intermittent rain to the southern safrinha corn belt—although most of the harvest has begun—while southern wheat regions remain dry and in need of rain.

Ukrainian farm exports surged to 4.04 million tons in May, including strong volumes of wheat and corn, which mostly moved through Black Sea ports. Corn output is still forecast at 28.2 MMT, but dry summer outlooks pose a risk to yield. A potential reduction in EU duty-free quotas from June 2025 onward could pressure future demand.

Ethanol output in the U.S. gave a bullish surprise, with production jumping by 49,000 barrels per day to 1.105 million. Exports rose sharply to 150,000 bpd, the highest in two months, even as inventories ticked up slightly. Market participants are watching whether this momentum can be sustained.

In Asia, Malaysia’s palm oil stocks are expected to have risen 7.74% in May to 2.01 MMT—its highest since September—despite firm exports. The increase is driven by modest production gains and rising imports of cheaper Indonesian palm oil, offsetting robust export demand.

Chinese rapeseed meal prices fell as warming diplomatic relations with Canada suggested a possible easing of trade tensions. Canada is a top rapeseed supplier, and loosening restrictions could stabilize feedstock access for China’s livestock sector after recent trade retaliation measures disrupted flows.

China also approved imports of coarse ground wheat and rye flour from Russia, further diversifying its grain sourcing and reducing dependence on Western producers amid escalating geopolitical concerns.

Russian wheat export duties were slashed by 25% to 1,023.5 rubles/ton. Duties on barley were eliminated entirely, and those on corn also declined. This marks Russia’s latest move to boost competitiveness on international markets, especially amid softening global grain prices.

Brazil remains a major factor in global corn dynamics. Exports post-harvest are expected to reach 41.5 MMT in 2024/25. This surge could dampen U.S. corn export demand in the coming months, while Argentina's weather-hit production has led to slower export activity.

Ukraine’s corn prices dipped in May, but total exports rose by 18%. Since July, the country has exported 20.6 MMT of corn, including 17.5 MMT since October. However, potential EU quota cuts next year could hinder future growth.

Morocco's grain dependency remains evident as wheat imports climbed to 6.05 MMT in the past year, with France and Russia being top soft wheat suppliers. Corn imports also increased, pointing to continued reliance on external sources amid fragile domestic output.

Finally, long-range forecasts now suggest an increasing likelihood of La Niña conditions by autumn. If verified, the implications could be significant: drier weather in Argentina threatening winter wheat, excessive rainfall in Western Europe delaying harvests, and warmer Northern Hemisphere temperatures potentially minimizing early frost risks.

With these interlinked factors, the global grain market is positioned for heightened sensitivity in the weeks ahead, as traders respond to weather, trade policy, and supply shifts that will shape the new crop season.