Key facts
- Global grain and oilseed markets are entering a period of heightened volatility.
- U.S. corn production is estimated at 15.8 billion bushels, down 7% year-on-year.
- Record soybean crush rates and strong export demand could lead to the tightest ending stocks in three years.
- Combined Ukrainian and Russian wheat exports are forecast to fall 11% year-on-year to a five-year low.
- High U.S. wheat prices are among the highest in the world.
- Ethanol demand for corn is expected to remain robust.
Global grain and oilseed markets are experiencing significant volatility driven by a confluence of tight supply and robust demand, according to CoBank. Weaker production prospects in key regions like the U.S., Europe, and the Black Sea are intensifying competition among global importers.
The corn market is under particular pressure, with prices rising approximately 20% last quarter as the outlook for the U.S. crop deteriorated. The USDA estimates the U.S. corn harvest at 15.8 billion bushels, a 7% year-on-year decrease, attributed to lower yields and reduced acreage. This tightening supply is compounded by a smaller European crop and declining shipments from Ukraine due to the ongoing war with Russia. Ethanol demand for corn is expected to remain strong, further pressuring livestock and poultry operators.
Soybeans present a different scenario, with the U.S. projected to harvest a record 4.54 billion bushels. However, record domestic crush rates, driven by increased demand for soybean oil for biofuels, and strong export demand, particularly from China, threaten to reduce ending stocks to their lowest level in three years. Attention is turning to South America, where another strong harvest is anticipated, though rising corn use for ethanol in Brazil and potential El Niño disruptions could limit export availability.
The wheat market continues to be impacted by constrained shipments from Ukraine and Russia, with combined exports forecast to fall 11% year-on-year to a five-year low. While talks of a truce to reopen Black Sea shipping offered temporary price relief, traders remain cautious. U.S. wheat prices are among the highest globally, reflecting scarce supply after the smallest harvest since the 1970s.