Monthly Grain Market Outlook

Nate Bruce, Farm Business Management Specialist,

Written 4/27/2023

Corn prices have been in steady retreat the past few months. The weather forecast in the corn belt is favorable for planting in late April and May. Unless, a major weather problem occurs, corn prices are in retreat and can possibly be heading that way all the way into June. Soybeans are in a bearish market as well. Soybean prices tried to rally this month but came up short. At this point, the only thing that can change the direction of soybean prices are planting delays. Uncertainty exists around large wheat supplies in Russia. Wheat prices are remaining volatile with uncertainty surrounding the Black Sea Grain Initiative.

The April USDA World Agriculture Supply and Demand Estimates Report (WASDE) estimated corn ending stocks remaining the same as the March estimate of 1,342 million bushels. The USDA WASDE report estimated reduced imports, exports, and industrial use compared to the March estimate. The USDA WASDE also projected the ending stocks for soybeans remaining the same as the March estimate at 210 million bushels. The estimate had no changes in soybean demand from the March estimate. Wheat ending stocks were projected at 598 million bushels, up by 5.28% from the March estimate of 568 million bushels. The USDA WASDE estimated increased imports and supply but reduced demand for wheat feed, domestic use, and export use.

In international grain market news, the Russian Foreign Minister threatened this week to abandon the Black Sea Grain Initiative. The Black Sea Grain Initiative is the agreement in place that allows for safe travel of agricultural exports from Ukrainian ports. To date, 29 million metric tons of agricultural products have departed Ukraine under the deal aboard over 900 cargo vessels. Prior to the Russia / Ukrainian conflict, both countries combined accounted for one quarter of global grain exports. Brazil is currently on track for a record-breaking soybean harvest this marketing year. Brazil is estimated to have an increase in soybean production of 20% from year on year. This estimate is about 152 million tons of soybeans produced this marketing year. This could lead to an oversupply of soybeans. China cancelled purchasing 327,000 tons of US corn, sending market prices tumbling. Chinese grain purchase cancellations highlight lingering concerns about massive Brazilian harvests causing weak export demand for US grain. In addition, China has recently set a goal to produce 90% of grain the county needs by 2023 to ensure greater food security and to reduce imports because of the Ukrainian war and geopolitical issues.

Figure 1: Corn Futures July 2023

Figure 1: Corn Futures September 2023

Figure 1: Corn Futures December 2023

Figure 1: Corn Futures

Figure 2: Soybean Futures May 2023

Figure 2:  Soybean Futures August 2023

Figure 2: Soybean Futures November 2023

Figure 2: Soybean Futures

Figure 3: Wheat Futures May 2023

Figure 3: Wheat Futures July 2023

Figure 3: Wheat Futures September 2023

Figure 3: Wheat Futures