CRM Agri notes shifting dynamics in global grain markets, with reduced stock forecasts and harvest downgrades driving price movements.
Wheat prices increased slightly in Chicago and Paris markets after the US Department of Agriculture (USDA) released its latest supply and demand report.
The USDA surprised markets by lowering its forecast for US wheat stocks for the 2024/25 season and cutting its estimate for the EU’s wheat harvest to a 17-year low, noted the analysis.
Market response
In Chicago, wheat prices for March 2025 went up 0.2%, while Paris wheat for the same month rose 0.7%.
In contrast, London wheat for May 2025 dropped 1.0%, affected by technical trading resistance and a stronger British pound compared to the euro, said the CRM Agri team.
Corn prices also saw gains, with March 2025 contracts rising 1.1% after the USDA significantly reduced its forecast for US corn stocks.
Soybean prices for January 2025 held steady with a 0.4% gain, while rapeseed prices in Paris fell slightly due to higher expected imports from Ukraine, reported the UK grain and oilseed market specialists.
Corn: Demand driving lower stocks
The USDA cut its estimate for US corn stocks by 5 million tons, a bigger drop than expected, suggesting tight supplies.
The change was due to higher demand for exports and ethanol production.
- US corn exports were raised to their highest level in four years, thanks to strong sales.
- Ethanol production also increased, with corn usage for ethanol reaching its highest since 2017.
Globally, the USDA lowered its forecast for China’s corn imports to a five-year low due to reduced trade with Brazil.
Soybeans: Small adjustments
The USDA kept its US soybean forecast steady but slightly reduced soy oil stock estimates, reflecting increased exports.
Argentina’s soybean harvest was revised upward due to more planted farmland, outlined the CRM Agri report.
Wheat: US and EU outlooks
The USDA unexpectedly reduced its forecast for US wheat stocks by over half a million tons, citing strong sales, especially to East Asia.
However, US wheat supplies are still expected to grow compared to last year, commented the analysts.
In the EU, the wheat harvest estimate was lowered again, hitting its lowest level in 17 years.
Exports from the EU were also cut, with poor harvests reported in several countries, including Belgium and Italy.
Russia’s wheat export forecast was also trimmed, reflecting new government limits on exports for the second half of the season.
