Skip Navigation

Review of Agriculture Commodity Prices – June 2020  


The price was steady in June, with the price of corn moving up about 1% from the end of May but is down 24% since May 31, 2019. 

The biggest issues in the area of corn are trade issues and weather/production.  In terms of trade, exports of corn to China has increased in the last few months and already this year, the 2020-21 exports are the second-largest on record (if all volumes scheduled to ship are in fact shipped).[1]  Another support for corn is few crop planting as show in the June 30th Acreage report which showed that US farmers planted almost 5 million few acres than the March 31 Prospective Plantings report indicated would be planted.  Although markets were anticipating a decline in acres planted (2-3 million acres less than the 97 million acres indicated in March), 5 million less acres (which were not added to any other commodities plantings, did surprise the market.

However, the biggest items weighting on the corn market is production and lower demand (due to less driving and less ethanol use).  The USDA still rates the corn crop 69% good to excellent and with hot temperatures forecasted and just enough rain forecasted, at the time of this writing, it could be a record corn crop in North America.  With the COVID-19 pandemic still raging in the United States and many States that may have to re-enter lockdown, driving will be lower for the foreseeable future and as a combination of record production and lower demand does not bode well for the price of corn.

Conclusion – it is tough to find many positives for the outlook for the price of corn.


Soybean prices were up 2% in June and are up about 1% from June 30th, 2019. 

The biggest items in the soybean market are production and Chinese demand.  In terms of production, Brazil may plant a record soybean crop of over 93.9 million acres[2]   This planting will start in mid-September.  Last year, Brazil planted 91 million acres of soybeans and resulted in a record harvest of 120.9 million metric tonnes.[3]  Further, there is great demand from China for these beans.  China imported 11.16 million metric tonnes of Brazilian soybeans in June, up from 6.51 million metric tonnes in June 2019 and 9.38 million metric tonnes[4]  Although this is negative for North American prices, soybean crush remains at elevated levels.  In June,  the National Oilseed Processors Association announced that June crush was 167.263 million bushels of soybeans which is up from 148.843 million bushels of soybeans in June 2019.[5] 
In the area of Chinese demand, it is worth noting that China’s pork output slid for the 7th straight quarter due to African Swine fever.[6]  Second quarter port output fell 4.7% compared with the same period a year ago to 9.6 million tonnes, according to Reuters. 

Conclusion – China will want to increase their domestic how production and that will lead to increase soybean imports.  Although China does want to buy as much as they can from South America, they will be forced to buy North American soybeans.  This can give support to the price of soybeans.


The price of soft red winter wheat fell 5% in June and is 12% lower than prices on June 30, 2019.

The major issue in wheat is production around the World and there seems to be more poor wheat crops than exceptional wheat crops.  In Argentina, 87% of the wheat crop has been planted into very dry conditions. [7]  This is key as a La Nina weather event is expected to hit Argentina between September and December which will make it challenging for wheat to finish well.  Many analysts are already reducing their estimate of the Argenina wheat crop.[8]

European wheat is also expected to be much lower this year than last year due to poor weather.  Consulting firm Strategie Grains expects that 2020 soft wheat for the European market will be 11.5% below last year’s harvest.[9]  Russia is also expected to lower wheat yields due to hot weather in early July.  Russia is the2nd largest wheat exporter after the European Union and with reductions in both markets, the outlook for the price of wheat is promising.

Although Russia implemented grain export quotas from April to June, the nation announced that they do not plan on having quotas for the July to December time period.[10]  However, they did state that they would look at making permanent a grain export quota from January to Jun 2021 in order to make sure domestic needs are looked after.[11] 

Although the above is relatively positive for wheat, there is also the issue that Australia raised their estimate of wheat output by 25% after rains ended the multi-year drought they have been experiencing.[12]  The Australia Bureau of Agriculture and Resource Economics and Sciences estimated that wheat production for the year end June 30, 2021 is estimated to be 26.7 million metric tonnes, up from the estimate of 21.3 million metric tonnes.[13]  Finally, the international Grains Council raises the forecast of global wheat production in 2020/21 period to 768 million tonnes up from the prior season’s 762 million tonnes.  [14]

Conclusion  – although you may think the poor crop outlook might be supporttve for the price of wheat, this information is in the market and if wheat output increases in the next 12 months, it is tough to see wheat increasing from these levels. 
[1] Inside Agriculture – Reuters - July 16, 2020
[2] Inside Agriculture – Reuters – July 17, 2020
[3] Inside Agriculture –Reuters – July 17, 2020
[4] Inside Agriculture – Reuters – July 14, 2020
[5] Inside Agriculture – Reuters -July 16, 2020
[6] Inside Agriculture – Reuters – July 17, 2020
[7] Farmlead – July 17, 2020
[8] Farmlead – July 17, 2020
[9] Inside Agriculture – Reuters – July 17, 2020
[10] Inside Agriculture – Reuters – June 17, 2020
[11] Inside Agriculture- Reuters – July 7, 2020
[12] Inside Agriculture – Reuters – June 7, 2020
[13] Inside Agriculture – Reuters – June 7, 2020
[14] Inside Agriculture – Reuters – June 26, 2020