05/28/2025 Rumors Are All It Takes

On the Grains
The initial U.S. corn crop rates were released yesterday, signaling a promising start to the growing season. Planting progress is slightly ahead of schedule at 87% planted, compared to the 5-year average of 85%. While there is always some area to point to with issues completing the process, I believe we can safely rule out the once-feared 96+ million acres. NASS released the first crop condition rating of 67% good/excellent, aligning with the average of 68% and consistent with last year’s ratings. It is essential to note that these early ratings have little to no effect on final yields, but the CBOT will still trade them. For instance, of the 18 years when the G/E rating was 70% or higher, 12 of those years met or exceeded the May WASDE yield. However, final yields have been below the May WASDE for six consecutive years, trendline yields may be becoming increasingly difficult to achieve. Once we reach late summer, those G/E ratings have a much higher correlation to the final yield. Generally, each 1% reduction in crop condition ratings in late summer represents about 7/10ths of a bushel in production. CBOT corn futures have been resilient, holding support considering increased rains in Parana and Mato Grosso do Sul, potentially adding 7-12 MMT of exportable corn supplies. However, the U.S. did ship 55 million bushels of corn last week, continuing a strong export program, leaving the balance of the year at 36.4 MBU.