Commodity Markets while the 10-year index shows an average decrease of 13 %. Keep in mind these are averages, meaning changes can be smaller( or larger) than what is normally seen. This time around the calendar, I’ m leaning toward a larger than average break.
By tracking the November 2025 soybean / December 2025 corn futures spread from last September through this past February, we know corn bought acres away from soybeans this spring. Then, tracking the September- December corn futures spread we could see the increased acres were being planted quickly.
Soybeans Follow a Similar Pattern
Soybeans: Similar to corn, the seasonal studies for the National Soybean Index show a solid selloff during the summer months. From the same last weekly close of May through the final weekly close of August, the Index tends to lose 10 %( both 5-year and 10-year averages).
The fun thing about the National Soybean Index is it was priced near the big round number $ 10 through much of April and May, again based on weekly closes only. This makes the math easy when it comes to projecting a low weekly close of nearly $ 9 in late August. What if that happens? Based on the economic Law of Supply and Demand, what does the market price at this level tell us about real fundamentals?
If the Index finishes August( also the end of the 2024-2025 marketing year) priced near $ 9.00, then it would put available stocks-to-use near 19 %. This would be the largest end of marketing year available stocks-to-use figure since 2019- 2020 when the Index was priced at $ 9.01. However, given U. S. soybeans lost planted area to corn for 2025, the stage would be set for a rally once combines started to run at harvest. How far will likely be determined by winter weather in South America to that point.
Wheat Supplies Keep Pressure on Prices
Wheat: By the time you read this, it is highly likely the 2025 winter wheat harvest will already be rolling across the U. S. Southern Plains hard red winter( HRW) growing area. The airwaves will be filled with the same two questions as always: What will national average yield and total production be? I have the same answer for both: IT DOESN’ T MATTER.
I’ ll give those whose very existence hinges on the U. S. Department of Agriculture’ s imaginary numbers a moment to collect themselves. The reality is it doesn’ t matter what U. S. HRW wheat production looks like this year. Why? Because: 1) The U. S. has ample supplies heading into harvest; 2) Demand remains more theoretical than actual; and 3) Did I mention we
have plenty of wheat on hand to meet demand?
Grain Bears May Have the Edge
In April, HRW futures spreads were so bearish— covering 90 % to 100 % of full commercial carry— that the CME’ s Variable Storage Rate program raised the official storage rate beginning May 19. That kind of move doesn’ t happen when supplies are tight. As for the National HRW Wheat Index, seasonal patterns suggest more downside ahead, with the 5-year index showing an average drop of 21 %, and the 10-year index falling 17 %.
The bottom line: there’ s not much to look forward to“ In the Good Old Summertime”— at least when it comes to grain markets.
Still, it might help to remember a line from the 1902 song of the same name:“ When your day’ s work is over then you are in clover, and life is one beautiful rhyme. No trouble annoying, each one is enjoying, the good old summertime.”
About the Author
Darin Newsom has been working with markets in general for nearly 40 years, dating back to Black Monday 1987. Over that time, he has worked in local grain elevators, first dumping trucks then as a merchandiser, before becoming a commodity broker and advisor. That eventually led him to DTN where he spent 15 years as the company’ s senior market analyst before going out on his own with Darin Newsom Analysis, Inc.
These days, he also has the title of Senior Analyst for Barchart. Along the way, he has developed his own way of analyzing markets in every sector, always proudly reminding people that he is not an economist.
June 2025 | www. FarmersHotLine. com | 27