Corn and soybean planting has reached a point where trade is not too concerned with future progress falling behind normal. The overall pace has slowed according to weekly numbers, but those tend to lag actual planting. The next point of interest will be crop condition, and current reports from the field seem favorable.

The crop that is struggling is winter wheat. The weekly crop progress report showed a winter wheat rating of 27 percent good/excellent and 43 percent poor/very poor. This was a 1 percent decline at the top end and a 3 percent increase on the bottom end from the prior week. This is the lowest winter wheat crop rating since 1996 and a direct result of the drought that has impacted the U.S. Plains. The winter wheat crop is currently 71 percent under moderate or worse drought conditions compared to just 23 percent last year. The USDA is already factoring in a smaller U.S. wheat crop this year, but more reductions may be needed.

The global wheat market is also becoming more of a market topic. It has been well publicized that the U.S. wheat crop is one of the lowest rated in the past several years with winter crop yields falling well short of average. Low wheat production is not just a U.S. issue, though. Australian officials claim that between elevated input costs and drought it will see wheat plantings to fall between 7 percent and 20 percent from last year. This will equate to production losses from 16 percent to 40 percent from a year ago. Canada and Argentina are also expected to see wheat plantings decline from 5 percent to 7 percent from last year.

Chinese officials have announced the country will be trimming its sow herd target. China says its new sow herd target will be 37.5 million head, down from the current 39 million head but above the 36.5 million that was predicted. China’s hog industry has long suffered from poor margins and continues to lower its sow herd target to help restore profitability, but previous methods were unsuccessful. The initial sow herd target was 41 million head, and this was lowered to the current 39 million in 2024. Since then, the government has been much stricter on its policy.

The main objective of this reduction has been to bring profitability to the Chinese hog industry, but this is failing to bring much relief from low values. A main reason for the low profitability has been overproduction. China’s population has seen great declines in recent years to the point where the government is now encouraging more births. China’s population has also shifted its diets to include more beef, further limiting pork demand. As a result, China is now looking for ways to elevate pork consumption.

China released the country’s April soybean import data with a lower than expected total. April imports totaled 8.48 million metric tons. This was a 40 percent increase from last April, but less than the 10 mmt trade was expecting. The U.S. was the source for 3.33 mmt of these soybeans, a little over twice the volume from April 2025. Brazil imports totaled 4.75 mmt in April, a 3.3 percent increase from a year ago.

The Brazilian soybean crusher Abiove has updated its soybean balance sheets. Abiove is predicting a 2026 Brazil soybean crop of 180.13 mmt. Abiove is also forecasting soybean exports of 114.1 mmt and crush at 62.5 mmt, both slight increases from their last guesses. The firm is now estimating this year’s soybean carryout in Brazil of 8.25 mmt compared to 6.76 mmt last year. If correct this would be Brazil’s largest soybean ending stocks in nine years.

Rising energy costs are becoming much more of a market topic. The most publicized of these has been their impact on nitrogen-based fertilizers, but we are seeing the impact spread through more of the global economy. The main issue now is transit costs, which have doubled in some cases. As a result, more importers are now buying the minimal amount of coverage needed rather than building reserves.

We are also seeing rising energy costs impact U.S. fieldwork practices, with many farmers only doing minimal tillage. Some are also claiming they will not replant crops this year due to both input and diesel costs. So far, this may be a limited issue given current U.S. weather conditions.

The International Grains Council has updated its world grain production forecast. The IGC is predicting a 2026/27 world grain crop of 2.414 billion metric tons, a 3 percent decline from the 2025/26 marketing year. The greatest shift is to wheat production with the IGC predicting an 820 million mt crop. This is just 1 mmt under the April estimate, but a large 25 mmt below the 25/26 crop. The IGC left its world corn crop estimate unchanged this month at 1.3 bmt. This year’s global corn crop is nearly equal to last year’s 1.296 bmt.

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