Grain Market Overview: Start Thursday 05.06.2025

Grain prices enter Thursday's session on a cautiously optimistic note, buoyed by steady supply outlooks

Wheat opened Thursday’s trading session in Chicago with the July 2025 CBOT contract priced at $5.41 per bushel, showing a slight drop of 2¼ cents from Wednesday's close. The market exhibited a quieter tone early on as traders weighed the mixed influences of weather concerns and trade adjustments. Rainfall forecasts for the U.S. Plains and Midwest suggest possible harvest delays but also the potential for improved crop quality. Meanwhile, renewed Egyptian interest in non-Russian and non-Ukrainian wheat adds a new layer to international demand trends, as geopolitical risks prompt supply chain realignments.

Corn began Thursday with the July 2025 contract trading at $4.37¾ per bushel, down 1 cent from the previous close. Early market sentiment reflected a balance between strong ethanol data released earlier this week and the pressure of expanding South American supply. While U.S. export expectations remain moderate, traders are closely monitoring Midwest weather, which continues to challenge planting and early development due to saturated soils in several areas. Brazil's aggressive post-harvest export push continues to create competitive strain, although recent estimates point to a slightly lower June export volume compared to last year.

Soybeans opened Thursday with the July 2025 CBOT contract at $10.43¼ per bushel, also marking a minor dip of 1¾ cents. Traders remain cautiously optimistic as planting progresses in drier Midwest pockets like Iowa and Nebraska. Support for futures remains somewhat limited, given the mixed performance in soymeal and soyoil markets. However, Brazil’s expected June soybean exports of 12.55 MMT—just under last year’s pace—could offer marginal support for U.S. market positioning in the weeks ahead.

Across the global grain complex, twelve major developments are influencing market dynamics and guiding trader sentiment as the session unfolds.

In the United States, agricultural optimism continues to rise. The Purdue University/CME Group Ag Barometer climbed to 158 in May, signaling growing confidence among producers. Improvements were noted in both current condition assessments and forward-looking expectations, with the bulk of sentiment driven by steady crop progress and pricing resilience.

Weather projections for North America remain mixed. The Northern and Central Plains are forecast to receive additional rainfall and enjoy cooler temperatures, favoring crop growth. However, the Canadian Prairies are facing increased drought risk, while parts of the Midwest, particularly in the south, remain overly wet and face delays in planting and crop establishment.

In South America, Argentina’s Pampas region remains cool and dry, with frost events recently slowing winter wheat development. Brazil is witnessing intermittent rainfall across the southern corn belt, although most of the safrinha corn harvest has already begun. Southern Brazilian wheat regions remain in need of rain to support early growth.

Ukrainian grain exports surged in May to 4.04 million tons, primarily through Black Sea ports. The country maintained its corn production outlook at 28.2 MMT, but weather risks related to a dry summer could affect yields. Market concerns are also growing over EU plans to scale back duty-free import quotas starting in June 2025, which may reduce future demand for Ukrainian grain.

U.S. ethanol data added bullish momentum earlier this week. Production hit 1.105 million barrels per day—reaching March highs—and exports climbed to 150,000 barrels per day, the highest in two months. Despite a slight uptick in inventory, the figures indicate robust demand, with market participants watching for sustained production.

Malaysia’s palm oil inventories are expected to have increased by 7.74% in May to 2.01 MMT, the highest level since September. This rise is due to stronger production and growing imports of cheaper Indonesian palm oil, which offset otherwise firm export demand. The palm oil market continues to influence the broader oilseed complex, especially soy.

Diplomatic developments are reshaping commodity flows in Asia. China’s rapeseed meal prices fell amid signs of thawing trade relations with Canada, a major supplier. A potential easing of trade tensions could help stabilize feed supply chains in China’s livestock sector, previously disrupted by retaliatory measures.

China also approved the import of coarse ground wheat and rye flour from Russia. This move further diversifies its grain procurement sources and reduces reliance on Western producers, a shift prompted by mounting geopolitical tensions and internal food security strategies.

Russia has taken another step to strengthen its export competitiveness by reducing wheat export duties by 25% to 1,023.5 rubles per ton. Duties on barley were eliminated entirely, and corn duties were also lowered. This policy reflects Russia’s effort to sustain grain flows amid softening global prices and maintain its foothold in key importing regions.

Brazil's influence on global corn trade continues to expand. The country is projected to export 41.5 MMT in the 2024/25 cycle. The anticipated surge in supply during late June is expected to weigh on U.S. corn export competitiveness, while Argentina’s weather-affected production continues to slow its own shipment pace.

Ukrainian corn prices declined slightly in May, but the total volume exported rose by 18% compared to April. Since last July, Ukraine has shipped over 20.6 MMT of corn, with 17.5 MMT sent since October alone. However, the looming reduction of EU import quotas in 2025 could curb future growth.

Morocco’s growing dependence on foreign grain remains evident. The country has imported 6.05 MMT of wheat in the past year, largely from France and Russia. Corn imports are also on the rise, highlighting Morocco’s vulnerability to local production shortfalls and volatile global supply chains.

Lastly, meteorological models indicate a rising likelihood of La Niña conditions developing by autumn. If confirmed, these shifts could bring drier weather to Argentina, threatening winter wheat output, while parts of Western Europe may experience excessive rain, potentially delaying harvest timelines. Meanwhile, warmer temperatures in the Northern Hemisphere could reduce the early frost threat.

As all these elements unfold, the global grain market continues to operate in a sensitive environment shaped by intersecting forces of weather, trade policy, and regional output trends. Traders remain vigilant, ready to respond to fresh data and signals that may redefine price paths in the critical weeks ahead.