Not only are May and June a busy time of year for farmers, but they are also a critical time in the markets. It marks peak grain fill periods for Northern Hemisphere winter wheat crops, the end of harvest for South American soybean crops, primary pollination for the Brazilian safrinha corn crop, and spring planting in the Northern Hemisphere. 

For U.S. row crop producers, all that global activity creates a flurry of market headlines and price volatility at a time when farmers are racing Mother Nature to plant crops and apply fertilizer and crop protection products. So, it’s not exactly the best time for farmers to ignore all this market activity. 

In my analyst brain, planning ahead is the best way I have found to manage the chaos. Here is what I will be watching in the markets through May and June:  

USDA new crop year data. In early May, USDA will publish its first look at 2024-25 production and usage estimates for corn, soybeans and wheat in the May 2024 World Agricultural Supply and Demand Estimates report. Due to dry weather plaguing top exporters, I expect that wheat prices could see more volatility following this report’s release. 

While we can already anticipate where 2024-25 grain and oilseed supplies will be forecasted in these reports, thanks to Prospective Plantings estimates, corn and soybean crops could run on the high side based on the late March forecasts. The May WASDE will provide more insights about usage estimates.  

Related:What’s on deck for ag markets?

Specifically, I will be watching USDA’s forecasts for Chinese grain and oilseed imports in 2024-25. China has already become more reliant on Brazil for its corn and soybean purchases rather than the U.S. But with larger supplies expected to come on line later this fall, China will need to continue purchasing large volumes to keep some level of price support alive in the markets. 

Closer to home, I will be watching for more optimistic corn and soybean usage data in the United States. Soybean usage is developing faster than production rates, but the same can’t be said for corn and wheat. If the domestic corn balance sheet doesn’t see consumption improvements from livestock, exports or ethanol production, and exports continue to linger at half-century lows for wheat, then both commodities could face bearish price prospects headed into the summer. 

Low prices, high input costs and tighter profit margins are likely going to slow the rate at which Brazilian soybean acreage expands in the 2024-25 marketing year. The thin margins and low land rentability are also likely to limit technological investments that would drive up yield expansion.  

Planting progress. The end of April featured many farmers dodging showers and temperature dips that thwarted February’s hopes for early planting, but it didn’t shut farmers out of the fields completely. By late April, corn planting progress was ahead of year-ago and five-year average historical speeds by a comfortable margin. 

July precipitation and moisture are two of the most significant factors that play into yield potential, but late planting can also inflict a penalty on yield development. Analysts circle May 15 on their calendars as the date by which corn planting needs to be 80% complete before significant yield potential is lost. 

Despite weekend showers in some parts of the Heartland, farmers are making the most of the limited time they’ve been able to spend in the fields so far this spring, based on recent Crop Progress data from USDA. While most of the “I” states and areas within the Upper Midwest were only able to enjoy three to four suitable days for fieldwork by April 29, growers in the Plains capitalized on four to six days of planting progress by that time, which helped to lift planting speeds in the April 29 report. 

Farmers are likely to continue dodging showers across the Heartland over the next two weeks, but they have also proved time and time again that they only need a few good days of fieldwork to conquer spring planting.  

Weather. NOAA’s 90-day forecast published in late April suggests May showers across the Heartland could give way to more seasonally average rainfall patterns by June. Temperatures are expected to run warmer than average through the end of spring and beginning of summer for most of the region, which should favor early crop development.  

There is an 85% chance El Niño conditions, which have favored warmer-than-average temperatures in the Northern Plains and Upper Midwest in recent months, will fizzle out by June. However, the Climate Prediction Center has increased the likelihood of a La Niña weather even beginning between June and August to 60%. 

La Niña conditions typically result in a cool and wet winter for the northern half of the U.S., while warm and dry weather reside in the southern half. That could increase risks for winter wheat growers later this summer, especially if the Southern Plains continue to remain dry throughout the spring. 

A word of caution about the extended forecasts: Weather outlooks beyond the 14-day forecast tend to be less reliable than their short-term counterparts, simply because forecasts are less dependable the further out they go. NOAA’s eight- to 14-day forecasts tend to hit that sweet spot of extended time and reliability, so that is what I recommend keeping an eye on. 

South American production. Expect the markets to be price responsive to any revisions USDA makes to Brazilian and Argentine corn and soybean production in the May and June WASDE reports. Traders bemoaned the large disparity between USDA and Conab production figures for Brazil’s 2023-24 soybean crop following the April WASDE. And leafhopper damage threatened corn yields in Argentina. 

USDA’s estimate of Brazil’s soybeans stood unchanged at nearly 5.7 billion bushels (155 million metric tons) following the April WASDE. But Conab’s figure dropped nearly 312 million bushels lower than that total, causing many market watchers to question if USDA will further cut Brazil’s soybeans in the May or June WASDE reports. 

A late March USDA attaché report from the post in Brasilia forecasted 2023-24 Brazilian soybean production at just over 5.6 billion bushels (152.6 MMT), nearly 100 million bushels lower than USDA’s April figure. It seems inevitable that USDA will be forced to make cuts to Brazil’s soybean crops, though it is less certain when — and by how much — those reductions will occur. 

If the cuts don’t come, soybean and corn prices could face bearish price headwinds. But if Brazil’s soybean and Argentina’s corn crops are reduced, demand for U.S. export sales of both crops could see a boost. 

June 30 acreage report. Planting speeds will play an important role in determining the June acreage figures. Soybeans started out at a fast clip early in the planting season, which bodes favorably for higher soybean acres in the June acreage report and potentially higher yields later in the summer. 

Corn usage ran higher than expected in the first half of the 2023-24 marketing year, and exports have improved dramatically since last year, thanks to purchases from Mexico and Japan. Data on quarterly grain stocks published alongside acreage data at the end of June will give old-crop corn and soybean prices their last chance for a rally before farmers need to start cleaning out bins for the fall.