Grains ended higher on Tuesday with cattle mostly lower.
Grains Higher After USDA Reports
Grain markets saw higher prices following the USDA Acreage and Quarterly Stocks Reports with December corn up 6, November soybeans up 4 3/4 and wheat from 5 3/4 to 10 1/2 cents higher. December cotton rose 25 points to 76.70.
Wheat Acres Record Low
2026 U.S. wheat plantings landed at a record low of 42.7 million acres, which was down 1.03 million from the March intentions and below trade estimates. Harvested acres came in at only 32.1 million, the smallest since 1877.
Winter wheat accounted for 31.5 million acres, which was down 900,000 from the March report largely due to drought.
Spring wheat planting will be the smallest in 56 years at only 9.39 million acres, which is also down over 600,000 acres from last year.
Arlan Suderman, chief commodities economist with StoneX, says the additional cut in winter wheat area was the biggest surprise for him in the reports.
“This being the third acreage survey for winter wheat, the general assumption was USDA would have had it kind of figured out planted acres, but still a big reduction there.”
He says that does tighten up the balance sheet a little bit, but the U.S. is not going to run out of wheat before next year’s harvest unless there are significant problems elsewhere.
“We still need to pay attention to the cheap wheat in the Black Sea. Now, it could have an effect, a positive effect, if we see a smaller crop in Europe. which is possible with the heat and drought that they’re having there. We’ll keep our eyes on that, but ultimately we need to see Black Sea prices come up as a result of that before we can see a notable improvement in our exports to help our prices.”
Why Can’t Wheat Rally?
Although wheat prices were higher on Tuesday the market is well off the May 13 highs when July hard red winter touched $7.50.
Why can’t wheat rally? Suderman says it is a function of cheap Black Sea prices which are competing against the U.S. in the export market.
Despite the lower harvest acreage and abandonment, he thinks it is unlikely production will fall much farther or at least not far enough to really impact prices.
The market has also largely ignored the heat and drought in Europe that could result is a smaller crop there....at least for now.
“If that comes to pass because of the heat and drought that could certainly help world prices. But ultimately, we need to see Black Sea prices come higher to really help our export picture. And that’s something we’re going to have to deal with.”
Corn Acreage Steady with March
USDA’s June survey reveals U.S. corn area up only 5,000 acres and nearly identical to the March survey at 95.3 million.
Plantings rose in Illinois, Nebraska, North Dakota and the Delta, while Iowa was among the states trimming acres from March. Dryness also cut 150k acres in Texas.
Why didn’t we see the much advertised shift out of corn March to June with the higher fertilizer prices as a result of the Iran war?
Suderman explains, “December corn spiking above $5 certainly helped. A lot of farmers had fertilizer in hand and booked already prior to the war starting. Those who didn’t were largely in the northwestern Midwest. That’s where we expected the vulnerability of lost acres. But even there, if you look at the Dakotas, Minnesota combined, we only lost like 100,000 acres. So not the impact we thought there as well.”
Farmers in northwest Corn Belt also busheled up last year and with good planting weather in those areas farmers stuck with corn.
Corn Stocks The Bigger Story
The more bullish data in the USDA reports was the drop in quarterly stocks for corn to 5.29 billion bushels.
While it is a 647 million bushel increase over last year, it was below expectations on record disappearance.
“That was 113 million bushels below expectations so it had largely been priced into the market. So, as a result the the algos bought the corn market and what it says is that last year’s corn crop was overstated. If you put together the March stocks report with this report that kind of confirms USDA overstated the size of last year’s crop,” he explains.
So, will USDA make that adjustment? He says, “If they do it’ll be September 30th when we’re focused on harvesting this year’s crop and the size of this year’s crop. I would anticipate reduction in the size of the crop along with the reduction in feed usage to kind of make the math work if they do that.”
Could This Bottom the Corn Market?
Could this data finally bottom the corn market and get funds to quit their relentless selling?
Suderman says, “Money flow has a big impact on markets today and supply and demand in the short run matter less than what they used to. If the funds interpret that we’ve come down and we’ve undervalued a commodity, then they come back in and buy, whether that fits with the fundamentals or not. We’ve seen that a lot over the last year,” he explains.
Plus, this is a pivotal time for corn at the end of June into July 4 and depends on the weather models coming out of the holiday.
“That’s a time when we tend to set the stage for pollination weather. I anticipate that’s going to be a significant thing.”
He also points out that it was the end of the month and quarter, which may mean some consolidation in the market but he wants to see more follow through.
“So I want to see this strength today confirmed over the next couple of days and then see what the weather models do over the weekend. I think we probably, from a fundamental standpoint, if they come in very moderate temperatures and showery in nature, that may make this hard to hold these levels. But if they start showing a heat dome coming back in again, then that may help confirm a bottom in these markets,” he adds.
Soybean Acreage Up Slightly
USDA’s June survey found 2026 U.S. soybean acres up 0.8% or 665,000 acres from its March survey, the largest increase for this report in 10 years. However, in line with expectations.
Where did the increase come from??
Slight increase in soybeans from March due to wet conditions in the Eastern Corn Belt???
Enough Soybean Acres?
Is 85.4 million enough soybeans acres with record crush, a 60% plus increase in the RVO levels and China possibly taking up to 25 MMT of soybeans??
In a word Suderman says “no” but it depends on how much China buys.
China has promised 25 MMT of soybeans but he says in the Phase One agreement only complied at the 60% levels and that is what USDA is figuring.
“Factoring in about 15 million metric tons of purchases would suggest we could handle that 15 million metric tons withno need to rally to ration demand. However, if they would go 25 million metric tons we’d be left tight and the markets would have to ration demand so
probably we could afford 18 to 20 million metric tons to could go to China,” he describes.
“The word on the street in China that our people there are picking up is that the government wants to buy at least 15 million metric tons by the end of this calendar year. And then we’ll see what happens after that. And that’s really pretty much what’s already been factored into the market,” he adds.
The trend among top-producing states was mixed, though stronger plantings in Kansas and Ohio helped boost overall area.
Cotton Planting Rises
U.S. cotton plantings, at 9.85 million acres, landed near the top of trade expectations, up 568,000 acres from last year and up 210,000 acres from March.
So, the spring rally bought some acres.
“We anticipate we’d see some strength there in cotton. And certainly that rally, you know, when the Iran war sent fossil fuel prices high, that pushed synthetic fiber costs upward as well, made cotton fiber more competitive and helped, therefore, strengthen the price of cotton and restore some of those acres.”
Cattle See End of Quarter Profit Taking
Cattle futures were mostly lower except the expiring June live cattle on end of the month and end of the quarter profit taking by the long funds.
He adds, “The other part of it is there’s some disappointment in product demand that we’re seeing both for beef and for pork. Now, is that because of the high gasoline prices? If so, gasoline prices are coming down and we will see that demand come back up. But we’ve
definitely seen some flattening of the product market.”
He says there has been some disappointment during the barbecue season, particularly with the generally favorable weather, until this week’s heat wave.
Presidential Order on Phosphate CVDs
President Trump also issues a presidential order to lower the countervailing duties on Moroccan phosphate fertilizer for eight months. USDA says this will lower prices by 22%.
Will it really lower prices and how fast?
He says “No, I don’t know where that 22% came from, but at this point we don’t anticipate that it will. And I think that’s one of the big
questions is why did it take so long? But at this point, we don’t anticipate it because particularly U.S. prices are relatively cheap compared to the rest of the world where prices are still much higher. So why should Morocco sell to us unless they want to do it as kind of a favor for lowering the tariffs?”
He says they can make more money sending phosphate to other markets.
