The Disappearing June Rally

This Week In Ag #170

Farming is steeped in tradition. Yet many of these time-held acts are fading. Among them appears to be the June market rally.

June has long been the month when grain farmers stayed glued to their radios, ready to pounce on market-high fall contracts. Over the past 20 years, the corn market high – based on the December futures price, the benchmark for “new corn” – occurred in June. That’s way more than any other month.

What makes June special? It’s basically the delta between crop progress and uncertainty. Markets respond to speculation and uncertainty. The biggest variable in farming is the weather. June is the point in the growing season when we can see crop progress and identify current and upcoming weather events such as drought, flooding and temperature extremes.

Not once this decade has corn reached its annual high point in June. Over the past two years, June has seen a market decline. This year, June ushered in an 8-month low in corn prices.

Grain markets figure to hinge on four factors this summer:

Weather. This is always the leading indicator of upcoming supply. Recent rains and a favorable forecast over much of the dryland producing acres will likely mitigate drought risks. Across the major Corn Belt states, crop progress reports appear positive; on par with recent averages. During my recent trip to Illinois, the crops looked very good. Unless something drastically changes, the weather likely won’t impact broad-scale acres.

Planting report. Set to be released June 30, the USDA will unveil total crop acreage planted in 2026 (although these numbers often change). As of this spring, farmers intended to plant 95.3 million acres of corn, down 3% from 2025, and 84.7 million acres of soybeans, up 4% from last year. Could recent spikes in fertilizer prices have shifted acres? Possibly. But as I always say, never underestimate farmers’ desire to grow corn.

Competition. Grain markets play on a global stage. That’s a key driver in the recent paradigm shift from June rallies. What happens in South America has a greater impact on our prices than what happens in Nebraska. Recent upward projections from down south are bearish for US farmers. Argentina’s production has increased by two million metric tons for both corn and soybeans. Brazil’s corn figures to be up 3 million metric tons, while soybeans are unchanged.

China. They are the X Factor. Sino-US meetings last month brought news of China’s intent to purchase an additional $17 billion in US farm products, in addition to the 25 million metric tons of soybeans originally pledged. But what China says and what it does isn’t always the same.

Current inland prices for new crop corn are trading below $4 and new crop soybeans are below $11 in many areas. Breakeven prices (according to the University of Illinois) average $4.88 for corn and $11.16 for soybeans. Let’s hope farmers see a summer surprise.