Wheat Rallies on Smallest US Acreage on Record

HAPPY INDEPENDENCE DAY!

Wheat

Chicago wheat paused Thursday, with the July ‘26 contract settling at $5.90 1/2, down 1 1/2 cents, after back-to-back gains earlier in the week. The deferred contracts told the bigger story: September SRW ended the holiday-shortened week up 10 cents and September Kansas City gained 19, with winter wheat closing at or near weekly highs, a technical development Pro Farmer’s editors flagged as price-friendly heading into next week.

Tuesday’s USDA reports provided the catalyst. All-wheat plantings came in at 42.74 million acres, the lowest tally ever recorded and the largest cut from March intentions since 2011, and as Standard Grain’s Joe Vaclavik pointed out, the harvested area, at 32.1 million acres, would be the smallest since 1877.

June 1 stocks printed 920 million bushels, below the average trade estimate.

The global backdrop helped too: Marex’s Tim Bulfer pointed to a 655,000 metric ton Saudi tender and slowing French exports out of Rouen as a heatwave leans on the Western European crop.

Still, the harvest hedge pressure is the counterweight, capping rallies while combines roll.

Watch next Friday. USDA releases its first all-wheat production estimate alongside the July 10 WASDE, and with the acreage base this small, any yield disappointment could tighten the balance sheet in a hurry.

US export sales are off 19% to start the marketing year, so if European heat keeps trimming that crop, US wheat could pick up business it’s been missing.

Corn

July corn added 4 cents Thursday to settle at $4.25. The market spent three straight sessions climbing off recent contract lows after Tuesday’s USDA data.

The Grain Stocks report showed 5.295 billion bushels on hand June 1, below every analyst estimate, which puts March-May usage at an all-time quarterly high of 3.74 billion bushels. Pro Farmer’s economists wrote that demand has ‘held up remarkably well,’ though with more than 17 billion bushels harvested last fall, they caution record use alone probably isn’t enough to lift prices in a meaningful way (it may however, in our view, help cement the recent lows as a near-term bottom).

Ethanol backs up the demand story: weekly production hit an 11-week high at 1.12 million barrels per day, and May corn-for-ethanol use set a monthly record at 471.8 million bushels, though StoneX’s Mike Castle notes cumulative usage still lags USDA’s full-year target.

Heat is the swing factor at home. The National Weather Service sees heat indices of 100 to 115 degrees across the Midwest through the weekend, though much of the belt has caught rain and forecasts lean wetter for the northwest belt next week.

Watch Monday’s crop condition ratings and Friday’s WASDE.

Record demand may not rally this market on its own, but it could keep a floor under it.

Soybeans

July soybeans added 5 1/2 cents Thursday to settle at $11.31 3/4.

Crush remains the engine. USDA reported a May crush of 213.1 million bushels, a record for the month and the 15th consecutive monthly record, with soyoil stocks at a six-month low. Castle flags the catch: cumulative crush has now slipped slightly behind the pace needed to hit USDA’s 2.65 billion bushel target, the first time all year that number has felt uncertain.

Exports are the soft spot, with old-crop weekly sales at a marketing-year low of 1.5 million bushels. That leaves China carrying the bull case: Bulfer noted rumors Beijing wants as much as 12 million metric tons booked before January, and Pro Farmer expects roughly 25 MMT of new-crop purchases.

June 1 stocks of 1.06 billion bushels came in above expectations, but quarterly use also set a record.

Watch for China to show up in the cash market. Futures positioning appears to be front-running the same playbook as Beijing’s last buying program, and confirmed sales could add to the modest weather premium the trade is holding.

But another week of marketing-year-low old-crop sales could offset that weather premium.

Sugar

Sugar quietly strung together its fourth straight session at a six-week high. October No. 11 futures ran to 15.17 cents per pound Thursday before settling at 14.85, off 0.14 on the day, extending a recovery off its late-June lows.

Two supply stories are doing the lifting. India’s monsoon rainfall was running 42% below normal as of June 29, per the India Meteorological Department, threatening cane yields in the world’s No. 2 producer. And Brazil’s Unica reported Center-South sugar production through May down 2% year over year at 6.84 million metric tons, with mills sending 58.4% of cane to ethanol versus 49.9% a year ago.

Talk of El Nino conditions building across the major producing regions has some forecasters penciling in a 2026/27 global deficit. Thursday’s macro tape helped too: a soft US jobs print (57,000 jobs added versus 110,000 expected) knocked the dollar to a two-week low.

Watch the monsoon maps and Unica’s next biweekly report. Bulfer notes the monsoon is advancing toward the northwest but still missing key growing areas in India’s west. If the deficit consensus firms up, sugar could extend its recovery; a dollar rebound or a swing back toward sugar production at Brazilian mills may stall it.