“Life moves pretty fast. If you don’t stop and look around once in awhile, you could miss it.”
Matthew Broderick, playing Ferris Bueller, said on the screen that nearly 40 years ago. The quote was top of mind for me as I sat down to make sense of the June grain and oilseed markets for this column.
Fresh threats of war in the Middle East grabbed headlines, with resulting swings in energy and financial markets easily supplanting any market-specific fundamental news for grains and oilseeds.
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Aside from the geopolitical turmoil, I had spent most of the week focused on canola when I wrote this. That market had climbed sharply on the back of proposed changes to United States biofuel policies announced June 13.
Proposed biodiesel blending mandates from the U.S. Environmental Protection Agency topped even the most optimistic trade expectations, sparking a rally in Chicago soyoil futures — which hit their highest levels in nearly two years.
Canola had already been trending up since late March, with fund traders building a record large net long position. While the U.S. biofuel proposals also include restrictions on foreign feedstocks, like Canadian canola, a bullish narrative still took hold of the futures.
The idea now is that U.S. biodiesel demand will be so large that, even if canola oil isn’t used to create the fuel, it will be needed to fill the resulting gap in the edible oil market. A “rising tide floats all boats,” as the saying goes.
Add in some increased optimism over possible improved trade relations with China, and it’s easy to see why canola futures jumped C$50 per tonne in the span of a week.
June 2025 wheat market
Wheat futures have posted equally impressive gains — but why?
Chicago soft wheat gained about 60 cents per bushel from mid-May to mid-June, to trade just under US$6 per bushel in the September contract.
Spring wheat and hard red winter wheat climbed about 70 cents higher over that same time. While the wheat futures remain well off any contract highs, something has shifted in the market.
Russian drought
Several of Russia’s top wheat producing regions have declared states of emergency due to drought, prompting a short covering bounce in the futures. It’s still unclear just how much wheat production and eventual exports will be hurt, but any reduction in the Russian wheat crop should open the door for more business from other countries.
Fund traders were holding large net short positions in the U.S. wheat futures, and those speculators were likely looking for any opportunity to book profits.
At the same time, Russia also announced plans to set up a wheat trading hub in the Persian Gulf, entered talks with Afghanistan to sell more wheat there and talked trade with Indonesia.
Russia’s agriculture minister told reporters that the country plans to export 45 million tonnes of wheat in the new 2025/26 season, which would be slightly more than the current season. Total Russian grain exports for the 2024/25 season, which ended on June 30, will be around 53 million tonnes, including 44 million tons of wheat.
2025 U.S. wheat harvest
U.S. news also lent support to wheat, with the early harvest progress running behind normal and condition ratings deteriorating for crops still on the field.
Ten percent of U.S. winter wheat was harvested as June 15, which compares with the prior five-year average of 16 per cent.
Kansas, the country’s largest wheat grower, was only three per cent harvested, compared to the average of 11 per cent.
While some wheat regions were dealing with excessive heat, others saw heavy rains — as much as 10 inches. Quality issues could become a concern.
Charts
At roughly US$6.60 per bushel, the September spring wheat contract was trading above all its major moving averages as of June 20, with US$6.80/bu. a possible upside target if the short-covering bounce continues. On the other side, a move back below US$6.40/bu. would signal an end to the rally.
September Chicago soft wheat was nearing psychological resistance at US$6/bu., but may be hard pressed to move much above that point without a fresh catalyst — especially as harvest pressure builds up, despite some delays.
