US spring planting acreage is in focus

Key takeaways

• Vessel flows to Iran are rebounding following the memorandum of understanding (MOU) signed by the US and Iran, with a steady pipeline of South American agricultural products to support import demand
• The CBOT (Chicago Board of Trade) new crop soybean-corn ratio has moved to 2.6 from 2.4 just weeks ago, a signal that may have influenced US growers’ spring planting decisions
• Though fertiliser prices have softened, elevated prices during the US spring planting campaign may have discouraged corn planting and led some growers to opt for a larger soybean acreage instead
• The upcoming US Department of Agriculture (USDA) acreage report will be the first hard data point to confirm whether US growers shifted some acres away from corn and into soybeans
• Current US soybean prices do not imply that the market is confident in China’s commitment to purchase 25 Mt of US soybeans for 2026/27

MOU signing supports grain trade via Strait of Hormuz

The signing of the MOU by the US and Iran is already rewriting grain trade via the Strait of Hormuz. What stands out in the most recent data is not just the headline revival of imports into Iran, but the quality of that recovery and its staying power.

At present, there is a steady pattern of cargoes leaving Brazil, rounding the Cape of Good Hope, and heading towards Iran. These are not isolated shipments. We're seeing agricultural products, such as corn, all locked into forward positions, with some vessels already positioned or loading, and others still weeks out from discharge. The significance here is straightforward: Iran is not scrambling for supply; it has access to reliable, competitive origins. And importantly, Iran has choices. That matters for trade flows and pricing.

Meanwhile, Gulf Cooperation Council (GCC) countries are responding to the same shift. The slight resurgence of imports via the Strait of Hormuz may sound modest, but the direction is clear. Grain and oilseed shipments are moving again through the normal routing, and Saudi Arabia's dependency on Red Sea imports is declining as a result.

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Fertiliser bottleneck eases as vessels exit the Gulf

The fertiliser story is equally significant, though for different reasons. Approximately 50 vessels laden with over 2 Mt of fertiliser were trapped in the Middle East Gulf (MEG). However, following the signing of the MOU between the US and Iran, there has been an acceleration of vessels exiting the region, many now taking the normal shipping lane via the Strait of Hormuz. What matters is not just the volume moving, but the signal it sends: supply is flowing again, and for the first time in months, the fertiliser bottleneck has eased.

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Growers are rebalancing between corn and soybeans in real time

The CBOT new crop soybean-corn ratio has moved notably. From approximately 2.4 heading into the March Prospective Plantings Report, it rose towards 2.6 and has since edged higher. Within the window between the USDA’s March Prospective Plantings and June Acreage reports, US growers are making real-time decisions. Soybean prices becoming more attractive than corn may have prompted some growers to reconsider their acreage allocation. But there's another factor layered on top: fertiliser costs.

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Higher fertiliser costs will have favoured soybean planting

Corn demands nitrogen fertiliser to realise its yield potential. Soybeans, by contrast, have an inherent biological advantage: they fix nitrogen from the atmosphere. With urea prices quoted above $1,000/t in parts of the US, this would have discouraged corn planting.

Revised USDA cost of production estimates show a larger increase from December to June for the 2026 corn crop than for the soybean crop. This reflects higher fertiliser costs caused by the Iran conflict. With cash prices under pressure, the US grower will be paying closer attention to input costs.

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USDA Acreage report will reveal whether acreage has actually shifted

Therefore, a key question in the market is how US growers have adjusted their initial spring planting intentions in March in response to the changing soybean-corn ratio and input costs. The USDA’s Acreage report due for publication on 30 June will shed light on this. Our current estimate is that 1.1 million corn acres have shifted into soybeans relative to the USDA's March Prospective Plantings report.

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China's soybean commitment is political, not commercial

Separate from the domestic acreage picture is the international dimension, particularly China.

China has begun purchasing US soybeans for the 2026/27 marketing year, though current sales have been modest. The USDA is currently forecasting a stronger export campaign y/y, likely in response to expectations of greater exports to China. However, this comes at a cost of fewer exports to ex-China destinations, which should be influenced by less price-competitive US soybeans. Yet with US soybean prices trending towards parity against Brazilian origin, the US will attract a greater share of ex-China demand.

Therefore, current US soybean prices imply that the market is not confident that China’s commitment to purchase 25 Mt of US soybeans for 2026/27 will be realised. The US will need to be pricing at a stronger premium to alternate origins to align with the USDA’s latest export forecast, assuming it too is factoring 25 Mt of exports to China.

President Trump and President Xi are expected to meet in September, which may help to better inform the outlook for US soybean exports to China during 2026/27. However, until then, US soybeans may continue to price more competitively on the export market if sales to China remain relatively lacklustre.    

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US soybean crush is running at record pace

Meanwhile, domestically, the soybean balance sheet does have some support. US soybean crushing is running close to, if not at, maximum capacity, constrained only by the physical limit of how much can be crushed, not by demand. The 2026/27 season is forecast to see a generous increase in crush capacity based on all the planned expansions. We currently forecast 2026/27 US soybean crush higher than the latest USDA estimate.

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El Niño adds another constraint to Australian wheat production

The El Niño story is another backdrop worth watching. The latest projection from the National Oceanic and Atmospheric Administration (NOAA) places El Niño probability at 100% for Q4 2026, with the event potentially stronger than previously forecast. Historically, El Niño causes drier conditions across parts of Australia's wheat-growing regions during the critical grain-fill period. As a result, the Australian wheat yield usually drops below trend. Add to that the likelihood of reduced planted area due to elevated fertiliser costs, and Australian wheat production faces a genuine double constraint for 2026.

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Shifting market dynamics adjust new crop outlook

The Middle East is opening again, which should ease the fertiliser bottleneck over the coming months. US acreage may shift towards more soybeans based on price signals and input-cost dynamics. China's soybean commitment remains a political question mark. Australian wheat production is potentially moving lower on both yield and area fronts.

The USDA’s Acreage report will anchor the near-term narrative. Then attention will turn to growing conditions as the US corn crop transitions to key development stages in July. August weather matters more for soybeans. Both events will greatly influence the outlook for new crop fundamentals and global export competitiveness.