Improving weather forecasts weaken corn and wheat markets

Weather forecasts have improved, which should lead to more planting getting done. That has had an impact on the wheat and corn markets. But the acreage that will be planted remains to be seen.

An eight-row corn planter in western North Dakota does its job as a farm-ranch headquarters stands on hillside a quarter mile away.
George Leingang plants his last 40 acres of corn with his family’s 320-cow commercial beef cattle headquarters in the background. Photo taken May 24, 2022, St. Anthony, North Dakota.
Mikkel Pates / Agweek
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The third week of May started off with the grains posting sharply higher to limit up gains but closed out the week on the defense. Wheat led the change to the plus side, and it led the charge to the downside.

Wheat opened the week limit up due to reports that India was going to ban wheat exports. By the end of the week, India was waffling on that statement. Selling was also tied to improving weather forecasts as the last two weeks of may are showing signs of a warmer, drier weather forecast for the northern Plains.

By midweek of the third week of May, the grains saw a huge risk-off session as it appeared every commodity was on sale. Part of the selling pressure was due to a 1000 plus hit in the Dow. The Dow was under extreme pressure off the news that Target and Walmart did not make their earnings projections. Everybody either shops at Target or Walmart, so for those two companies to not make earnings estimate, it’s not good. This shows that inflation is hitting the economy much worse than expected.

The northern Plains producer will be pushing the envelope a little this year on planting. The last planting date for canola in western North Dakota was May 15 and the date for corn for most of the north is May 25. A lot of tough decisions are going to be made in the next week to 10 days that will shape what crops are going to be raised in North Dakota, northern Minnesota, and northern South Dakota this year.


No technical damage has been done to the grains as of yet as wheat is sitting at support virtually at the bottom of the week’s trading range. Corn is close to the same trading performance this week as wheat. Soybeans, on the other hand, are sitting up at resistance, getting ready to break out to the upside.

What has also been evident this week, with the front month futures performing better than the deferred contracts. This is a signal that old crop demand is strong and or supplies of old crop grain is becoming very tight. Either way, it should help tighten up basis levels. The tight supplies concerns were confirmed by IGC’s updated production estimates. The IGC cut both world wheat and corn production estimates due to production concerns in the U.S. and Ukraine. India also lowered their wheat production estimate to 106.4 million metric tons versus 111.3 million metric tons last month.

The Wheat Quality Council wrapped up its tour of the hard red winter wheat region. The tour is estimating Kansas's production at 261 million bushels versus USDA’s May Crop Production estimate of 271 million bushels. Oklahoma's production came in at 60 million bushels, in line with USDA’s projection.

The June-July-August long term weather forecast from NOAA was released recently, and it showed little change from the previous forecasts. The summer forecast continues to call for above normal temps for the entire U.S. and normal to below normal precip.

The fourth week of May is turning out to be a marathon, and the race is on in the northern Plains as the last planting dates for some crops approach while weather forecasts show a warm dry week ahead. How much will producers get planted is the billion-dollar question at this point. And how much incentive will the market give producers to push the envelope?

Wheat gapped higher to start the week due to technical buying. Wheat was in need of a technical correction last week, but traders might have overdone the retracement a bit. Wheat was pressured by the weather forecast calling for this week to be warm and dry for the northern Plains while light pressure was due to reports of India continuing to flip-flop on their export intentions for this year. In the end, India will export wheat this year but not as much as originally expected. Corn followed wheat into the red. Light pressure was also due to expectations of solid planting progress as the central and eastern Corn Belt has seen little in the way of delays. Reports have plantings starting in the western Corn Belt. Soybeans were the bright spot, pushing higher due to strong demand.

Traders were expecting to see solid planting progress in the Corn Belt and most were expecting to see solid progress in the northern Plains. Wheat was hit hard to close out the previous week and technically needed to see a bounce. World wheat production concerns are still in the minds of traders are most are still not comfortable with what India is really intending on doing this year. Corn found support from May 23's strong export inspections estimate. Light support also spilled over from the higher wheat exchanges. Soybeans were on the defense due to technical selling. Soybeans have posted gains eight out of the past nine session, gaining over $1.

The May 23 USDA Crop Progress report was friendly to neutral grains. It was impressive to see most of the Corn Belt catch up to it the average pace, but the northern Plains continues to lag, and not by a little anymore.


Corn planting progress was estimated at 72% complete, not bad when compared to the average pace of 79%. The Corn Belt states have all caught up and within 4% of their average pace. But Minnesota is only 60% planted versus 86% average and North Dakota is only 20% planted versus 66% average. South Dakota is 62% planted versus 71% average. Last planting date for most of this region is May 25. As of Sunday night, the U.S. still had 25.1 million acres of corn left to plant; 2.9 million are in North Dakota and 3.1 million are in Minnesota.

Soybean planting progress is not as critical as corn as last planting date does not roll around until June 10. But the same scenario is playing out in soybeans. As of Sunday night, 50% of the nation’s soybean crop were planted, versus 55% average. The Corn Belt has caught up and in line with their average pace. But North Dakota, South Dakota, and Minnesota again are far from their average pace. Minnesota is reporting planted progress at 32% versus 68% average. North Dakota is only 7% planted in soybeans versus 47% average. South Dakota has 34% planted versus 47% average.

Spring wheat planting progress was not close to expectations. As of Sunday night, 49% of the nation’s spring wheat was planted, versus 83% average. North Dakota is 27% planted versus 80% average. That leaves about 3.8 million acres of wheat left to plant in North Dakota while Minnesota has about 1.1 million left to plant.

On the plus side, the forecast was calling for the northern Plains seeing temps in the 60s to 70s heading into Memorial Day weekend with little chances of rain. But we have heard that before. If realized, about a third of the unplanted acreage will get planted. That will leave producers with the decision to keep planting and take the late planting penalty or just stop and take prevented planting.

By midweek, the grains had started to look tired and seemed to be ready for a correction. It also seems that all of the news has turned negative as well.

It seems premature to remove Ukraine war premium out of the market on better-than-expected planting estimates, but that is one of the pressure points in wheat and corn. Updated production estimates have Ukraine corn production now at 25.2 million metric tons versus earlier estimates of 18.5 million metric tons. Wheat production is estimated at 17.1 million metric tons versus 16.96 million metric tons earlier. With the war still raging on, the question now needs to focus on how those crops are going to be harvested and then exported.


China and Brazil have come to an agreement to allow for Brazil corn to now be imported into China. This is negative U.S. corn as it will likely result in lower U.S. exports of corn to China.

Soybeans seem to be a little isolated from the recent heavy selling pressure. Strong demand and expectations that USDA will be forced to increase soybean’s export sales pace by 50 million bushels in the next Supply and Demand estimate due to the fact that soybean sales are already 35 million bushels above expectations. In addition, traders are expecting a reduction in soybean acreage due to the improvement in planting conditions.

An improving cash market and expectations for increased demand due to start of the BBQ season helped cattle push higher. The sloppy tone in the grains added support.

“The risk of loss in trading futures and/or options is substantial and each investor and/or trader must consider whether this is a suitable investment. Past performance, whether actual or indicated by simulated historical tests of strategies, is not indicative of future results.”

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