Wheat futures ended lower on Tuesday, retracing some of Monday’s gains as traders reacted to weakening export momentum and continued competition from Russia. The May 25 CBOT Wheat contract closed at $5.65 per bushel, down 3 ½ cents. Kansas City Hard Red Winter (HRW) wheat managed small gains of 2 cents, while Minneapolis Spring Wheat (HRS) was mostly unchanged, showing slight weakness in the front-month contracts. Traders focused on the latest crop progress updates, which showed Kansas winter wheat ratings slipping to 48% good-to-excellent, down 2% from last week. Texas and Oklahoma wheat conditions remained stable at 28% and 46% good-to-excellent, respectively. Japan announced a new wheat tender for 122,456 metric tons (MT) from the U.S., Canada, and Australia, with 70,676 MT allocated specifically to U.S. wheat. European soft wheat exports continue to struggle, totaling 14.92 million MT as of March 16, a sharp 35% drop from last year’s 22.92 million MT during the same period.
Corn futures saw mixed movements on Tuesday, with the May 25 CBOT Corn contract settling at $4.58 ¾ per bushel, down 2 ¼ cents. Short-term weakness reflected profit-taking and concerns over expanding U.S. corn acreage. S&P Global raised its forecast for 2025 U.S. corn plantings to 94.3 million acres, an increase of 800,000 acres from previous projections. Traders also monitored ethanol production, as the upcoming Energy Information Administration (EIA) report is expected to show a slight decline in weekly output, contributing to market hesitation. The soybean-to-corn ratio now stands at 2.24, favoring additional corn planting in the upcoming season. Chinese corn imports remain weak, with recent data showing the lowest import pace in seven seasons, further clouding U.S. export prospects.
Soybean futures ended Tuesday with slight losses, pressured by weaker export demand and a disappointing U.S. crush report. The May 25 CBOT Soybean contract closed at $10.12 ¾ per bushel, down 2 ¾ cents. Soymeal futures fell by $1.70 to $4.40 per ton, while soyoil managed modest gains of 38 to 46 points. The National Oilseed Processors Association (NOPA) reported February soybean crushing volumes at 177.87 million bushels, marking an 11.13% decline from January and falling well below market expectations. Brazil’s soybean exports for March are now projected to reach 15.56 million MT, a marginal increase from earlier estimates. European soybean imports reached 9.6 million MT so far this marketing year, compared to 8.98 million MT last year, underscoring continued reliance on South American supplies.
Key Global Market Developments Impacting Grain Prices
Trade tensions continue to weigh on global agricultural markets, with U.S.-China and U.S.-EU disputes at the forefront. President Donald Trump reaffirmed plans to impose sector-wide tariffs on April 2, targeting agricultural goods alongside steel, aluminum, and automobiles. In response, China has halted soybean imports from three major U.S. agricultural firms, further shifting its reliance toward Brazilian suppliers. This shift has pushed Brazilian soybean export premiums up by 70%, as Chinese crushers scramble for alternative sources.
The European Union is moving forward with tariffs on $28.2 billion worth of U.S. goods, including soybeans, corn, and beef, in retaliation for American trade measures on European steel and aluminum. European feed industry leaders warn that rising costs could disrupt livestock feed supply chains, increasing demand for alternative protein sources like rapeseed meal and sunflower seed meal.
Corn trade flows are shifting as China continues to favor Brazilian imports, with shipments up 84% year-over-year. Analysts fear this trend could create long-term challenges for U.S. corn exports, especially with the Biden administration considering additional restrictions on Chinese technology. Meanwhile, logistical bottlenecks in Ukraine persist, as Russian attacks on agricultural infrastructure threaten Black Sea grain exports.
Wheat traders are closely watching southwestern Russia, where dry weather remains a critical concern. Although some precipitation arrived over the weekend, analysts doubt it will be sufficient to reverse prolonged drought effects. In the U.S., Kansas winter wheat ratings declined, while conditions in Texas and Oklahoma remained steady. The Southern Plains remain stressed by strong winds and wildfires, worsening soil moisture deficits.
In South America, Brazil’s soybean harvest has progressed to 70%, outpacing last year’s pace. However, Brazilian soybean exports have fallen 30.4% year-over-year due to logistical constraints. Concerns remain over whether Brazil will meet its latest production estimate of 167.37 million MT, as excessive rainfall continues to impact harvest operations.
The latest U.S. soybean crush report revealed significant declines, with February crush volumes dropping 11.13% from January to 177.87 million bushels. This figure was well below expectations, marking the lowest crush volume in five months. Meanwhile, soybean oil stocks increased by 8.8% from January to 1.503 billion pounds, reflecting weaker soymeal demand.
Brazil’s corn stocks remain historically low, with beginning inventories for the 2024/25 season at just 2.04 million metric tons, compared to 7.2 million tons last season. The tight supply situation has driven domestic corn prices close to BRL 90 per 60-kilo bag, the highest level since April 2022.
Palm oil markets continue to see volatility, with Indonesia’s February palm oil exports rising 62.2% to a four-month high following Jakarta’s decision to cut export taxes. This shift has weakened the Malaysian palm oil market, which fell to a four-year low as India and China sourced cheaper Indonesian supplies.
Fertilizer prices remain elevated, with potash prices at New Orleans (NOLA) increasing to $310-$315 per short ton, while Corn Belt prices have climbed to $345-$360. Analysts expect continued strong demand for fertilizer as spring planting preparations accelerate.
Market Outlook for Today’s Trading Session
With trade tensions escalating and weather uncertainty continuing, grain markets are likely to remain highly volatile throughout Wednesday’s session. Traders will closely monitor developments in U.S.-China trade talks, EU tariff discussions, and South American crop conditions. Key reports to watch include the USDA export sales data and the latest production estimates, which could provide further direction to wheat, corn, and soybean prices in the coming sessions.