Fundamentally Speaking

Grain and oilseed markets have been battered by the start of global trade wars, vast improvement in outlook for South American row crop production this year (especially in Argentina), and large-scale fund selling whether to liquidate previously established long positions such as in corn or adding to existing shorts as in wheat and soybeans.

Adding to the negative tenor was last week's USDA Ag Outlook Forum balance sheet projections for major crops showing rising supplies of corn and wheat, and lower forecasted soybean prices from this year despite planted acreage and ending stocks seen down for the 2025-26 season due to massive South American supplies.

Not sure what can turn things around other than some relaxation in the ongoing tariff disputes or perhaps some weather issue.

In that regard, the outlook for Brazil's second season corn crop is still in doubt though recent weather trends have been promising while here in the U.S. it is a bit early to start focusing on early season growing conditions.

We do note however that USDA Ag Outlook projections for increasing U.S. corn acreage at expense of soybean area and what is seen as steady all wheat plantings is just conjecture at this point as Mother Nature and changing relative crop economics will figure into the final planting figures.

Along these lines this graphic shows the USDA Ag Outlook (AO) estimates for the major crop planted acreage on the left-hand axis vs. the total of all three and the final tally of all three major crops (corn, soybeans and all-wheat) on the right-hand axis all in million acres seeded.

The figures in the orange boxes are the difference between USDA AO and final combined major crop acreage.

We cannot ignore the fact that for the past seven years in a row, combined U.S. corn, soybean and wheat planted area has fallen below the final figures with some large drops seen in 2022 of 6.6 million acres combined and a massive 12.7 million acre fall in 2019.

Hence, for those with a bullish bent, one could say last week's total acreage figures could be the highest of the year and who knows whether USDA U.S. corn and soybean yield projections at record high levels will come to fruition.

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