The grain market saw mixed movement across major commodities, with wheat, corn, and soybeans reacting to fundamental and geopolitical factors. 

The currency pair EUR/USD declined to 1.0868. The price of US WTI light crude oil fell to 70.61 USD per barrel.

Wheat prices strengthened across all three U.S. exchanges, supported by global demand and supply considerations. The March 2025 CBOT wheat contract closed at $5.77 per bushel, up 10¼ cents. Dry conditions in the U.S. Plains limited downside pressure, while heavier rainfall in soft red winter (SRW) wheat regions contributed to a more stable outlook. Japan’s tender for 96,725 metric tons of wheat, including 62,545 metric tons from the U.S., along with South Korea's purchase of 50,000 metric tons of U.S. wheat, added bullish sentiment. However, EU wheat exports continued to lag behind last year’s pace, reaching only 12.5 million metric tons compared to 19.76 million metric tons at this point last year.

Corn markets faced downward pressure as the March 2025 contract fell nearly six cents at the opening before stabilizing. U.S. export inspections showed 1.252 million metric tons of corn shipped for the week ending January 30. Meanwhile, Brazil’s corn market saw rising prices as sellers held back supplies, betting on future gains. China’s expansion of domestic corn stockpiling in the northeast added to the firming tone. U.S. ethanol production remains a key driver for demand, with December’s corn use for ethanol at 473.2 million bushels, down 2.3% year-over-year. Argentina’s corn crop faces deteriorating conditions due to ongoing drought, with satellite imagery revealing worse-than-expected moisture stress.

Soybeans rebounded from recent losses, with the March 2025 contract climbing between 10 and 17 cents, supported by China’s decision to exclude soybeans from its retaliatory tariff list. U.S. soybean export inspections reached 1.013 million metric tons, providing additional strength to the market. However, bearish factors remain, with Brazil’s harvest progressing at a slower pace, reaching 9% as of January 30, compared to last year’s rate. Conflicting production estimates continue to cloud market sentiment, with Celeres raising its 2024/25 soybean crop forecast to 174 million metric tons, while StoneX lowered its estimate to 170.9 million metric tons due to dry weather concerns. Argentina’s soybean crop remains under pressure from drought, though February rains could stabilize conditions.

Geopolitical tensions and trade policies have played a significant role in shaping grain market movements. The U.S. government announced new tariffs, imposing 25% duties on imports from Mexico and Canada, with an additional 10% on Chinese products. These measures have created uncertainty for agricultural exports, particularly in the soybean sector. In response, China retaliated with tariffs on a range of U.S. goods but notably left soybeans off the list, allowing the market to rebound from recent lows.

Russia’s wheat export outlook remains a key driver for global prices. SovEcon raised its forecast for Russia’s 2025/26 wheat exports to 38.3 million metric tons, reflecting improved supply expectations. However, in the near term, February exports are expected to be cut in half year-over-year due to logistical and profitability challenges. This shift could tighten global supply and provide support for international wheat prices. Meanwhile, Ukraine’s grain exports have increased by 10% year-over-year but declined in January, with Russian drone attacks near the Danube disrupting storage and shipment capabilities.

South America’s weather remains a focal point for global grain markets. Brazil’s soybean harvest is lagging, exacerbated by erratic weather patterns. The Buenos Aires Grain Exchange has warned that February rains will be critical in preventing further declines in Argentina’s crop potential. In contrast, Brazil’s corn ethanol production is on the rise, helping to offset lower sugarcane crushing volumes.

In the United States, grain market participants are closely monitoring domestic weather conditions. The winter wheat crop has seen mixed developments, with conditions improving in Kansas but deteriorating in Oklahoma and Texas. Mississippi River grain shipments have increased, providing a more stable logistical outlook, though barge rates remain steady. The U.S. cattle herd has also shrunk to its lowest level since 1951, influencing feed grain demand dynamics.

Elsewhere, India’s palm oil imports have dropped to an 11-year low due to price premiums over soybean oil and seasonal cold weather. Malaysia’s palm oil exports also declined by 12.3% month-over-month in January, further influencing global vegetable oil markets. This has contributed to recent gains in soybean oil prices, adding another layer of complexity to the broader oilseed market.

With global grain markets facing a confluence of trade policy shifts, geopolitical risks, and weather uncertainties, price volatility is likely to persist in the near term. Traders and analysts will continue to assess shifting export trends, crop conditions, and government policies for direction in the weeks ahead.