Wheat and Corn Markets Face Crosswinds: Navigating Weather and Demand in 2025

The agricultural commodities market is in a state of delicate balance this April, as wheat and corn prices reflect both optimism and uncertainty. While U.S. planting progress for both crops has outpaced historical averages, weather disruptions, export dynamics, and geopolitical factors are creating volatility. Investors must parse these crosscurrents to position themselves for the coming harvest season.

Wheat: Dry Conditions Fuel Modest Gains

Wheat futures have risen slightly in early April, with Chicago SRW wheat reaching $5.48¾ per bushel on April 21—a 2¾-cent weekly gain. This uptick is driven by concerns over U.S. winter wheat conditions and lingering drought risks in key producing regions.

Key Data Points:
- Winter wheat heading progress in top U.S. states reached 15%, slightly above the five-year average of 13%.
- Crop condition ratings, however, revealed 21% of winter wheat in poor/very poor shape, signaling stress from uneven rainfall.
- Global export dynamics also play a role: U.S. weekly wheat sales totaled 76,497 metric tons, with total commitments at 97% of the annual forecast, leaving little room for further demand surprises.

Meanwhile, Russia’s March grain exports plummeted 58% due to export quotas, reducing Black Sea supply and indirectly supporting U.S. prices. However, speculative short positions in wheat have begun to unwind, suggesting traders are cautious about overestimating the impact of Russian supply constraints.

Corn: Strong Exports Offset Planting Delays

Corn prices have stabilized after a volatile start to the month, with May futures at $4.82¼ per bushel—a 3¾-cent increase from the prior week. The market is balancing two competing narratives:

1. Optimism from robust demand:
2. U.S. corn exports hit 1.562 million metric tons in the latest week, reaching 87% of the annual forecast, buoyed by strong demand from Asia and Latin America.

3. The International Grains Council (IGC) upgraded its global 2024/25 corn production forecast by 2 million tons, citing favorable planting conditions in the U.S. and Brazil.

4. Concerns over planting delays:

5. While 12% of U.S. corn was planted by April 20—2% ahead of the five-year average—cold, wet weather in the Northern and Central Plains has slowed progress in states like Missouri and Texas.
6. Argentina’s ongoing dry harvest and Brazil’s reliance on timely rains for safrinha corn add further uncertainty.

The corn market’s resilience, despite these risks, underscores the growing importance of biofuel demand: U.S. ethanol and biodiesel credits surged in March, with mandates expected to expand later this year. This creates a floor under corn prices even if yields falter.

Market Dynamics: A Perfect Storm of Variables

Investors must monitor three overlapping risks:
1. Weather: Soil moisture remains adequate in most regions, but prolonged cold snaps or flooding could delay planting further. The U.S. Plains’ scattered rains are a double-edged sword—benefiting soil health but hindering machinery access.
2. Trade flows: Brazil’s record soybean crop is indirectly pressuring corn prices by diverting freight capacity, while China’s low soybean inventories (lowest in nearly three years) could drive increased U.S. corn purchases to meet feed demand.
3. Policy shifts: Russia’s export quotas and China’s import decisions will continue to reshape global supply chains, with ripple effects on U.S. commodity prices.

Conclusion: A Prudent Play in Volatile Markets

The current landscape offers opportunities but demands precision. Wheat appears more compelling in the short term due to U.S. crop stress and Russian supply uncertainties. The 21% of winter wheat in poor condition and the tight export commitments (97% of annual forecast filled) suggest limited downside, even as speculative short positions unwind.

For corn, the strong export data and biofuel tailwinds justify a cautious bullish stance, but planting delays and Argentina’s harvest risks could cap gains. The IGC’s production upgrade hints at potential oversupply, but if Midwest yields fall short, prices could rebound sharply.

Investors should allocate moderately to wheat futures while maintaining a long-term position in corn, hedged against weather risks. With the USDA’s planting progress reports and weekly export data updates, staying agile will be key. As the adage goes: In agriculture, the weather is the CEO—and April’s whims are just the opening act.

Data as of April 21, 2025. Past performance does not guarantee future results.