Lack of rain gives corn more support than wheat

The wheat market is still having some difficulty choosing a direction. The premium for the drought and thus lower yields in the US has already been partly priced into the futures market. That it is now also turning dry in the cornbelt is causing more commotion. In Western Europe it is also dry and warm for the moment, but that is not really taking hold on the market yet. The September wheat contract on the Matif closed yesterday €0.25 lower at €210.25 per tonne. On the CBoT, wheat showed a modest gain of 1½ cent to $6.24 per bushel. Corn closed 3¼ cent higher and came to $4.55¾ per bushel. Soybeans were the biggest gainer on the Chicago exchange with a gain of 9¼ cent to $11.94½ per bushel. The mood in the wheat market can be called somewhat lukewarm. In Western Europe, most places are heading into a warm weekend, although showers are also forecast. The heat is especially a risk to the grains in the south of France and on the Iberian peninsula. Of course the showers can also cause damage, especially if there is hail, but that is usually very local. Drought In the US, it has been dry on the prairies and in the south for a long time. The important wheat states Oklahoma and Kansas remain largely marked in the new drought monitor published yesterday this week as well. That has little effect on the market. According to various analysts, the drought has already been more or less factored into the price. That the drought is spreading further toward the cornbelt makes more of an impression on the market, so we can cautiously conclude. The major corn and soybean states Iowa and Illinois have been colored yellow further this week. At least as important is that the fourteen-day forecast shows little or no rain ahead for the cornbelt. Brazil is expected to import more wheat in 2026. Domestic cultivation is under pressure from higher production costs, partly caused by the war in Iran and by uncertainty over the possible effects of the weather phenomenon El Niño this growing season. According to the Brazilian industry association of mills Abitrigo, importing wheat from neighboring Argentina is not likely. The interest group expects that Brazil will import 1 to 1.5 million tonnes of wheat this season from countries such as the US or Russia. In 2025 Brazil imported 6.9 million tonnes of wheat. For 2026 exports could then rise toward 8 million tonnes and that would be the largest wheat import since 2013. Export power For soybean meal exports, it is a good year for Brazil. In the first four months of the year, the country has overtaken Argentina in soybean meal exports. Brazil is already the largest producer and exporter of soybeans. Argentina was a bigger player in soybean processing. Due to changes in Brazilian policy around biodiesel, for which soybean oil is used among other things, and trade policy to gain a more dominant position in the world market, Brazil has overtaken Argentina. The soybean harvest in Argentina is in the final phase. That is usually also a period in which the government sometimes wants to give exports an extra push. That is not the case now. It appears all but certain that the Argentine government does not want to temporarily lower the export tax on soybeans.