Market Trends Report – May & June 2025
Podcast: Play in new window | Download
Subscribe: Apple Podcasts | Spotify | RSS
US and the World
It is full speed ahead. It is that time of year when planters are rolling across the Great North American corn belt. In fact, good weather has made for great progress that may ultimately lead two bin busting crops. As of May, the 12th 62% of the US corn had been planted 15% ahead of last year’s pace. However, as we all know we have been here before and one never knows how the final yields will be at this point in the crop year. Needless to say, a good start is a good thing and could likely lead to even bigger crops in 2025. The USDA weighed in with their latest WASDE report on May the 12th.
USDA predicted some big crops in their May 12th report. The USDA estimated new corn crop production at 15.82 billion bushels this year based on a yield forecast of 181 bushels per acre. This was above pre report estimates. The planted acreage is set at 95.3 million acres up 5% from a year ago. Total domestic usage is set at 12.785 billion bushels and corn exports for new crop are projected at 2.675 billion bushels. Globally, USDA estimated Brazil’s corn production to be at 130 MMT with Argentina coming in at 50 MMT.
On the soybean side of the ledger new crop soybean production was estimated at 4.34 billion bushels using a 52.5 bushel per acre national average yield. This was based on a US planted soybean acreage of 83.5 million acres. Total usage for soybeans domestically in the United States is set at 4.415 billion bushels with the forecast ending stocks of 295 million bushels. From a global perspective, USDA is estimating the next Brazilian soybean crop to be at 175 MMT and Argentina to come in at 48.5 MMT. US wheat production is set to increase in the new crop year to 1.921 billion bushels an increase from 1.858 billion bushels last May. There was also an increase globally in world wheat production for this coming year.
On May 16th soybean futures were higher than the last Market Trends report. Corn and wheat futures were lower. July 2025 corn futures was at $4.43 a bushel. Dec 2025 corn were at $4.35 bu. The July 2025 soybean futures stood at $10.50/bu. The November 2025 soybean futures was at $10.35 bu. The July 2025 wheat futures closed at $5.25 a bushel. The Minneapolis May 2025 wheat futures closed at $5.73 a bushel with the September 2025 contract closing at $5.87 a bushel.
The nearby oil futures as of April 18th closed at $62.49/barrel up vs the nearby futures recorded in the last Market Trends report of $64.68/barrel. The average price for US ethanol in the US was $2.00/gallon, lower than the $2.03/gallon recorded in the last Market Trends Report.
The Canadian dollar noon rate on May 16th, 2025, was .7154 US, up vs the .7217 US reported here in the last Market Trends report. The Bank of Canada‘s lending rate remained at 2.75%.
Ontario
Ontario crops are being planted quickly this spring. Corn and soybean were planted starting in late April and continuing as of May the 16th. Planting was somewhat delayed in eastern Ontario versus southwestern Ontario but it’s catching up as wet weather is affecting parts of southwestern Ontario. However, it must be said that we are off to a good start which should weigh on new crop basis levels as we move ahead in 2025.
The 1.1 million acres of Ontario winter wheat looks good and will surely be heading out in the first couple weeks of June where another fungicide application will be made to many of these fields. Wheat prices for delivery on this crop in July are currently around $6.24 a bushel which is exciting to almost no one. At these current levels it might be hard to sustain Ontario wheat production at this level going into 2026.
One of the reasons that Ontario wheat prices are at this level is the value of Canadian dollar currently at .7154 US which is up from month ago. This is always good for Ontario cash prices to have a lower dollar and it continues. Despite shipping lots of Ontario corn to Europe basis levels have softened into mid-May for Ontario corn. However, it is only by a few cents a bushel. Ontario soybean basis levels have actually been maintained or increased slightly probably due to the drop of a penny in the Canadian dollar. As always, Ontario soybean and wheat cash prices will be most sensitive to a Canadian dollar change.
Old crop corn basis levels are $1.10 to $1.49 over the July 2025 corn futures on May 16th across the province. New crop corn basis levels were $1.05 to $1.34 over Dec 2025 futures. The old crop basis levels for soybeans range from $2.98 to $3.20 over the July 2025 futures. New crop soybeans range from $2.84 to $3.11 over the November 2025 futures. Ontario SRW wheat prices are in the $6.17 bu. range. For July 2025 new crop the bid is in the $6.24 bu. range. On May 16th the US replacement price for corn was $6.62/bushel. You can access all these Ontario grain prices in the marketing section at http://gfo.ca/marketing/daily-commodity-report/
The Bottom Line
It is a very volatile time, but we are at the lower end of the price spectrum. Clearly, as we go forward there is so much risk on the table with regard to how this US crop will fare in 2025. Keep in mind last year December corn dove down to about $3.95 a bushel during the summer, and it is not without a path down to $3.70 this year. However, we all know that things rebounded for farm prices later. We are still early in the game with regard to how crop weather will impact our crop prices going forward.
The timing is now for seasonality in the grain market. For instance, we know the prices are at the lower end now, but we also know that for new crop marketing mid-June is usually the best time to contract corn and that is coming. The same can be said for soybeans although that is a little bit later as August is so important to pod set in the beans. Keep abreast of the markets very closely over the next month and have market standing orders ready. History tells us will usually see price appreciation.
It is also no secret the geopolitics is playing a big part in grain movement throughout the world in 2025. Tariffs from the United States are certainly affecting not only grain movement in the United States and Canada but also around the world especially into China. Our American friends might think of this as shuffling the deck with grain going other places, but often times that means replacing Canadian grain in our traditional markets.
It is difficult to see an overly bullish scenario from a farmer perspective because as farmers we always want prices to go higher. Keep in mind that at these relatively low levels over the last 18 months grain demand has been building. Cheap makes that much of a difference. What it will mean going ahead is that if there is even a slight reduction in production in the United States this year it will cause price appreciation. Needless to say, marketing needs to be refocused constantly.
Commodity Specific Comments
Corn
King corn has a bit of a problem. We are near contract lows in fact December corn is within six cents of a contract low as of May the 16th and the September contract actually reached a contract low. Of course, a lot of this crop which could have been contracted for way over $5 last winter. As it is now, here we are.
As always with this time of year, it is a very fluid situation. With the USDA predicting 95.3 million acres of corn at 181 bushels per acre any movement in these numbers will cause gyrating ending stocks. For instance, the new crop ending stock prediction as of now is 1.8 billion bushels, if the yield goes lower this year it could get down to 1.3 billion bushels. Consequently, if the yield is higher than 181 which is probably entirely unlikely, we go higher. Crop weather, as always will be key in this discussion.
The July 2025 corn contract is currently priced at 20.75 cents higher than the September 2025 contract a bearish indication of new crop corn demand. Seasonally, we know that corn prices tend to peak in early June and bottom out in early October. The July 2025 corn futures contract is at the 26th percentile of the past five-year price distribution range.
Soybeans
Conab and the Argentinian crop rating agency increased old crop soybean production in their last report. The Argentinian agency put Argentinian soybeans up 117 million bushels and Conab raised Brazilian production by 20 million bushels. Clearly, big crops are getting bigger, and this will likely weigh in the market. However, keep in mind that American soybean acreage number could go lower and a corresponding decrease in yield this year will send ending stocks down even farther. It is a mixed bag.
An interesting aspect of soybean demand is American biofuel demand which is subject to government regulation. On May 15th they looked like these regulations were going to be lowered for soybeans and that caused a limit decrease in soybean oil pressuring soybean prices. However, the Americans have actually used more soybeans for that mandate than had been planned for and government’s final decision on this is yet to be made. Simply put, it’s probably a good thing for soybean demand and a good thing for soybean prices all in.
The July 2025 soybean contract is currently priced 4.5 cents above the August 2025 contract considered neutral to bearish for soybean demand. Seasonally, soybean prices tend to peak in early July and bottom out in early October. The May 2025 soybean contract is currently at the 23rd percentile of the past five-year price distribution range.
Wheat
Wheat prices have always had a hard time in the last few years of finding a friend. Wheat prices are off their contract lows but there still at very low levels as we head into June. In fact, wheat production in the United States is set to increase which just adds to the moribund nature of eastern Canadian wheat prices. The question at a certain point is how low are low prices or how low is low? At a certain point you would think that these low prices would increase demand for wheat which at some point might help. That might be a long wait, in the meantime we will welcome a Black Swan for the wheat market.
Even though the Ontario wheat crop looks good at this point we all know there’s lots of risk ahead. Wheat is one of the only crops that we subject to four different crop seasons and the risk doesn’t stop there as you can lose the crop on the grading table. For Ontario farmers, looking ahead we hope the weather will be kind to the wheat. Quality will always be important as we get closer to harvest time. Hopefully by then prices will have improved. The Canadian dollar in the 71-cent range will continue to help Ontario wheat prices.
Commodity Specific Comments (cont.)
In Canada the April 28th federal election is over with a new Liberal Minority government. Regardless of political affiliation, one thing Canadians are hoping for is successful negotiation over tariffs with the United States. However, it is very hard to know how things will change looking into 2025 especially with the steel, aluminum and auto tariffs combined with the fentanyl tariffs still with us. The new Prime Minister has not necessarily promised an easier road ahead. We will have to wait to see what will happen.
The Canadian dollar dropping back to .7154 cents US has actually been helpful or Ontario and Quebec cash grain prices. However, as we all know the Canadian dollar is a thinly traded currency on world markets, but it is very important to us. As we move ahead it will likely be subject to sell offs depending on the attitude of the American administration toward Canada. At the present time, nobody knows where that will be even though recently the new Prime Minister got together with the American president to set the tone for the future. Nothing was resolved and in fact the 51st state thing continues to catch wind in some parts of the United States. This surely will continue to dog the value of the Canadian dollar within the next few months.
The focus here in Ontario over the next month will surely remain to get this crop planted. If everything goes by the script Ontario will have an even bigger corn crop this year than we did a year ago. This should weigh on new crop basis values as the weeks and months go by. At the same time if we run into “hot and dry” at the wrong time that could change everything from an Ontario basis pricing value. There are no benchmarks of information to look for other than the daily exercise of reading market intelligence. Rain makes grain in the futures market and to some extent it does as well in Ontario.
As it is, we have been here before, seen even lower prices with worst prospects. The truth is we live in a farming world where things are constantly fluid with change being our only constant. The same is so in our grain market world and it will be in 2025. We still have all the geopolitical problems in Ukraine, Russia, China and elsewhere. Key will always be for the Ontario producer to balance all of these pricing factors and capture market opportunities. At the end of the day, there will be many grain marketing opportunities ahead.
