Wheat futures declined across all three U.S. exchanges, with the May 2025 CBOT wheat contract settling at $5.51 ¼ per bushel, down 2 ¾ cents. The wheat market struggled as global competition remained strong, with Russian and Ukrainian supplies dominating export channels. The U.S. faced additional setbacks after Canada and Mexico secured exemptions from new U.S. tariffs, ensuring uninterrupted wheat trade between these key markets. Meanwhile, Japan purchased 94,282 metric tons of wheat from the U.S., Australia, and Canada, but only 35,882 metric tons were of U.S. origin. French wheat quality improved slightly, with 73% of the soft wheat crop rated in good or excellent condition, up 1% from the previous week.

Corn futures saw slight gains, with the May 2025 contract closing at $4.69 ¼ per bushel, up 5 ¼ cents. The market found support after President Trump delayed 25% tariffs on Mexico and Canada, two of the largest buyers of U.S. corn. The USDA reported that corn export commitments reached 49.567 million metric tons, a 26% increase from last year, covering 80% of the USDA’s export forecast. However, Brazilian February corn exports fell to 1.432 million metric tons, down from 1.713 million metric tons in the same period last year, which could support U.S. exports moving forward. Traders are awaiting next week’s USDA report, with analysts expecting a 24-million-bushel reduction in the U.S. corn carryout projection.

Soybean futures ended lower, with the May 2025 contract closing at $10.25 per bushel, down 2 ¼ cents. The market remained under pressure as U.S. export sales struggled, despite China importing 206,000 metric tons of soybeans last week. While total soybean export commitments reached 44.386 million metric tons, a 13% increase from last year, concerns linger over future demand due to trade tensions. Brazil remains a dominant force in the market, with February soybean exports totaling 6.43 million metric tons, slightly below last year’s 6.61 million metric tons. Additionally, 42.4% of Brazil’s 2024/25 soybean crop has already been sold, ahead of last year’s pace.

Key Market Developments and Global Trade Trends

The U.S.-China trade dispute remained a dominant theme, with China escalating tensions by imposing a 10% tariff on U.S. soybeans and blocking imports from three U.S. firms. These measures follow the additional 10% and 15% tariffs on $21 billion worth of U.S. agricultural goods earlier in the week, affecting wheat, corn, and soybeans.

Russia signaled that it may impose grain export limits if the 2025 harvest falls below expectations. The government stated it would consider non-tariff restrictions in response to unfavorable weather conditions that could reduce production. This uncertainty has the potential to push wheat prices higher if supply constraints emerge.

Weather concerns persisted across major agricultural regions. Argentina faced excessive rainfall, delaying the corn harvest, while Southeast Brazil continued to experience drought conditions that threaten second-crop safrinha corn production. Long-term forecasts suggest dry conditions could persist through mid-March, exacerbating concerns about Brazil’s ability to meet global demand.

In North America, the Northern Plains remained warm and dry, raising early-season drought concerns. Meanwhile, the Midwest faced a volatile weather pattern, with scattered showers and the potential for a significant storm system next week. The Central and Southern Plains received much-needed precipitation, helping to improve winter wheat conditions.

Global logistical challenges continued to weigh on grain markets. Barge shipments along the Mississippi River fell, with corn shipments down 41% and soybean shipments down 38.2% week-over-week. In Argentina, a potential strike by the oilseed workers’ union threatened to disrupt soymeal and soyoil exports, adding further uncertainty to global supply chains.

The biofuel sector also influenced price movements. U.S. ethanol stocks rose 5.2% to 27.57 million barrels, raising concerns of an oversupply. The Biden administration is expected to review biofuel mandates, potentially impacting demand for corn-based ethanol and soybean oil for biodiesel production. Meanwhile, Brazil is considering lowering import taxes on corn ethanol, a move aimed at strengthening U.S.-Brazil trade ties while addressing domestic fuel price concerns.

Macroeconomic factors added to the complexity of grain markets. The U.S. Dollar Index weakened, making U.S. agricultural exports more competitive globally. However, inflationary pressures and the Federal Reserve’s stance on interest rates continued to affect market sentiment. Crude oil prices held steady at around $70 per barrel, influencing both transportation costs and biofuel margins.

Export dynamics remained challenging for the U.S. wheat market. Despite slight improvements in U.S. shipments, competition from Black Sea and Australian wheat continued to limit U.S. export potential. France saw a modest improvement in wheat export prospects, but global price competition remains intense. Meanwhile, China’s demand for U.S. corn and soybeans slowed, with Brazil cementing its position as the dominant supplier for both commodities.

Investor sentiment reflected growing caution, with managed money funds reducing long positions in wheat, corn, and soybeans. Traders are now focused on the upcoming USDA WASDE and Prospective Plantings reports, which are expected to provide further clarity on supply, demand, and price direction.

The global grain market remains highly volatile, navigating the complexities of U.S.-China trade tensions, shifting export demand, and unpredictable weather conditions. With Russia considering grain export restrictions, Brazil’s drought persisting, and the U.S. delaying tariffs on key trade partners, traders remain on high alert for potential price fluctuations. The upcoming USDA reports will be closely monitored for insights into U.S. stock projections, global supply adjustments, and future trade expectations.