Watch the Weather: Here’s Where Corn, Soybean, and Wheat Futures Could Be Headed Next

The soybean bulls came out of the gate strong on Monday, with July futures (ZSN25) hitting a 10-week high. However, on Tuesday morning, soybeans had lost most of Monday’s gains. Corn continues to slump as July futures (ZCN25) on Tuesday dropped to the lowest level since last October. Winter wheat futures markets continue to get slammed as July SRW (ZWN25) and HRW  (KEN25) futures both hit new contract lows on Tuesday too. 

Let’s break down what’s going on in the grains and where prices may be headed in the coming weeks — including the potential for big upside price moves.

Soybeans Lifted by Thawing U.S.-China Cold War on Trade

News over the weekend the U.S. and China agreed to dramatically reduce tariffs on each other’s goods for a 90-day period lifted spirits in the general marketplace and initially lifted soybeans, corn, and wheat futures in overnight trading Sunday. 

However, soybeans were the only market to hang on to gains during the intraday session Monday. China is a major importer of soybeans. Better trade relations with the U.S. likely mean more China imports of U.S. soybeans.

Soybeans got an added lift Monday at midday after the release of a price-friendly USDA supply and demand report (WASDE). The agency trimmed 25 million bushels from the 2024-25 marketing year soybean carryover from last month. The USDA estimate was 19 million bushels below the average pre-report trade estimate in a Reuters survey of analysts. USDA raised estimated U.S. soybean exports by 50 million bushels, to 1.85 billion. 

On 2025-26 marketing year soybeans, USDA projected U.S. carryover stocks of 295 million bushels, down 55 million from the current marketing year and 67 million bushels below the average pre-report trade estimate. New-crop soybean total supplies were projected at 4.710 billion bushels, down 24 million from the current marketing year. 

Corn Continues to Slide on Good Early Season Growing Weather

The July corn futures contract in early April flirted with $5.00 a bushel but the past month has seen prices drop by over 50 cents. Planting and early growing conditions in most of the U.S. Corn Belt have been good. 

On Monday afternoon, the USDA reported the U.S. corn crop at 62% planted versus the five-year average of 56% in the ground. The agency said 28% of the corn crop had emerged as of Sunday, which is above the 21% five-year average.

Monday’s WASDE report showed a 50-million-bushel cut to the 2024-25 marketing year U.S. corn carryover from last month’s report. The estimate was 29 million bushels below the average pre-report trade estimate in the Reuters survey of analysts. USDA raised the export estimate by 50 million bushels, to 2.6 billion.

For the 2025-26 marketing year, USDA projected U.S. corn carryover of 1.8 billion bushels, which is 220 million below the average pre-report trade estimate. 

Surprisingly Bearish USDA Data Adds to Winter Wheat Woes

The soft red winter and hard red winter wheat markets were already under duress before receiving another body blow on Monday. U.S. production data in the May WASDE hints that record wheat production levels could be reached this year. 

The USDA projected all U.S. wheat production at 1.921 billion bushels. Analysts in the Reuters survey expected a figure of 1.885 billion bushels, compared with 1.971 billion bushels for all wheat production in 2024. USDA trimmed 5 million bushels from its old-crop wheat carryover estimate. New-crop wheat carryover is projected at 923 million bushels, up 77 million bushels from this year and 60 million bushels above the average pre-report trade estimate. 

The strong gains in the U.S. dollar index ($DXY) early this week are bearish for the grain markets, but especially for wheat. The stronger greenback will make wheat prices even less price-competitive on world trade markets.

Wheat traders this week will closely monitor the Wheat Quality Council’s annual HRW tour through Kansas and areas of surrounding states. The tour started Tuesday morning and ends Thursday.

Where Are the Grain Markets Headed? 

The next few months are arguably the most volatile for the grain futures markets. The U.S. planting and growing seasons for corn and soybeans, as well as winter wheat harvesting, all take place in this timeframe. Weather patterns in the U.S. Midwest and Plains states have moved closer to the front burner of the grain futures markets.

Importantly, many more years than not, some degrees of weather-induced corn and soybean futures markets rallies occur in the spring and summertime. And wheat prices tend to follow any corn and soybean weather rallies. A study by the respected Pro Farmer advisory and analysis firm shows that last year there was not a significant weather market rally in the grains in the summertime. The study found that the last time the corn and soybean markets went without a significant weather scare for two years in a row was back in the mid-1980s. In other words, grain futures markets this spring and summer are overdue for significant weather-market scares that rally prices. 

The fact that corn and wheat futures prices have been beaten down so hard recently is likely to make any sudden weather-market scare that pops up even more potentially bullish. 

Purchasing out-of-the-money call options on the grains soon should be a strong consideration for speculators.

Tell me what you think. Email me at jim@jimwyckoff.com.