The Grain Bullets
5 main drivers of the grain market
After feedback from users, we have decided to provide a weekly summary of the main bullet points of what is happening in the grain markets.
- US Wheat Crop Ratings Surprised Markets
A major story this week was the unexpectedly poor condition of US spring wheat, with the USDA rating only 45% of the crop good/excellent. This was well below trade expectations (above 70%). North Dakota’s crop was even weaker at 37%. This supported Minneapolis spring wheat prices at times, but sluggish overall demand left the market down with CBOT in A$ terms, down A$4 to A$324.
- Russia and India Expect Big Wheat Crops
Russia’s Sovecon consultancy raised its 2025/26 wheat export forecast to 40.8 million tonnes, and its crop forecast to 81 million tonnes, due to better weather, even as the season’s start may be slow in key regions. India’s wheat production is expected to hit a record 117.5 million tonnes in 2025, helping replenish stocks and avoiding imports this year. Strong harvest outlooks in both countries add to the sense of plentiful global wheat supplies.
- Uncertainty Over Ukraine’s Exports and EU Policy
Ukraine’s wheat exports are forecast to drop to 15 million tonnes for 2025/26 amid uncertain harvest prospects and, critically, possible changes in EU import policy. The EU’s current duty-free access for Ukrainian grain is set to expire on June 5, and future trade rules are under negotiation. For now, most new-crop Ukrainian wheat is being sold to the Middle East and Southeast Asia rather than Europe.
- Mixed Weather and Currency Moves Shape Market Tone
Weather improved in many grain-growing areas, easing concerns over drought in the US and supporting crop prospects in the Americas and Europe. The US dollar was volatile mid-week, capping US export competitiveness, but weaker by Friday, making US grain slightly more attractive globally. In Russia, the rouble reached a two-year high. Chicago corn and soybeans both ended the week lower, pressured by expectations for ample supplies, strong crop progress, and ongoing uncertainty over US biofuel policy.
- Good weather forecast for Australia.
In Australia, there is good rainfall forecast for the majority of the country’s growing region. This will be timely, especially for those struggling with the dry weather in South Australia and Victoria. Let’s just hope that the weather forecasts are not just teasing us.
Reuters surveyed a bunch of Australian analysts last weeks on their planting forecasts. It is important to note that any planting expectations or production forecasts at this point are open to a very large degree of error. Charts of area are below.
