The May WASDE report placed a lot more attention to the U.S. soybean balance sheets. Soybean ending stocks this year are now forecast at 350 million bu, which is an 8 percent stocks-to-use ratio. This is at a point where price rationing would be warranted. The initial 2025/26 soybean balance sheets are even tighter at 295 mbu, a stocks-to-use ratio of just 6.7 percent. This comes as the U.S. soybean crop is still being planted and has the entire growing season ahead of it. These numbers may not be supporting soybean futures yet, but we are seeing more concern in the cash market with sizable basis incentives already being posted.

The corn complex is struggling with conflicting balance sheet data. U.S. corn carryout for the 2025/26 marketing year is estimated at 1.8 billion bu. This is up 385 million bu from the current old crop carryout estimate and the highest volume in recent history.

At the same time, the world corn carryout this coming year is predicted to be 277.8 million metric tons, the tightest level in the past 20 years. This is a result of world corn production falling short of demand for the past two years. Global corn demand continues to rise, mainly for ethanol manufacturing, and this is starting to shift how the market looks at large corn crops.

Outside markets continue to have an impact on commodity futures. The downgrade of the U.S. debt by Moody’s was a bearish indicator for the U.S. economy, as was a drop in consumer confidence to the 2nd lowest level on record. This has economists showing more doubt over future interest rate cuts.

The April inflation data contained mostly as expected numbers. The April Consumer Price Index showed a 0.2 percent increase in consumer prices from March. This was equal to street estimates but above the -0.1 percent we saw in March.

Core inflation, which excludes energy and food costs, was also up 0.2 percent in April. Energy costs in April were up 0.7 percent from March while food costs were down 0.1 percent. Year-to-year inflation is up 2.3 percent and core inflation is up 2.8 percent, both of which are above Federal Reserve inflation targets. These numbers do not support interest rate cuts, especially with economic uncertainty growing.

Economic issues are not just confined to the U.S. China is also reporting ongoing economic stress as consumer spending remains depressed. Russia has been added to the countries seeing economic stress, as farm equipment sales have halted due to a lack of money and credit.

In China, a deflationary market is more concerning right now. China’s economy has shown deflation signals for the past three consecutive months as even with depressed commodity values, consumers are showing little purchasing interest. The trade war with the United States has compounded deflationary market stress. Consumer spending is higher in the U.S. but showing signs of slowing as well. There are hopes that lower tariffs on Chinese goods will benefit consumer spending, but the fact all costs remain elevated is a long-term negative factor.

Even though the Brazilian soybean harvest for the year has wrapped up, farmer selling of new crop soybeans remains slow. According to the Brazil firm Safras, farmers in the country have sold 51 percent of this year’s soybean crop compared to sales of 65 percent a year ago. Forward contracting on next year’s Brazil soybean crop is 8 percent compared to 10 percent a year ago. Depressed soybean values, improved storage facilities, and a lack of export demand have hampered Brazilian soybean selling.

This slow soybean selling pace is having an impact on available storage in Brazil. The safrinha corn crop is now being harvested and available storage is tight. This is forcing some farmers to sell soybeans to make room for the incoming safrinha crop. Reports of very good early yields on safrinha are creating an even greater need for storage space. Some farmers in Brazil have opted to sell soybeans, putting pressure on the global market.

Storage is also expected to be short in Australia this year, mainly for wheat. This is from a loss of wheat demand into China. China has imported a large volume of Russian wheat, and when combined with a large domestic crop, it is limiting the need for imports from all other sources. This comes as Australia has harvested bumper wheat crops. Australia is now scrambling to find storage for its wheat inventory, and will likely be offering it into the global market at lower values than the current market.

After several weeks of delays, Chinese importers are seeing vessels clear customs in the usual 10 days, not the 20 days that were seen earlier this month. These delays are the primary reason April soybean imports dropped to their lowest level in ten years and strained crusher stocks. Crusher inventory has started to build now that times are improving. China crushers report an inventory of 6.5 million metric tons of soybeans, a 1.8 mmt increase from a week ago. China is forecast to see a more steady flow of incoming soybeans over the next several weeks, easing shortage concerns.

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