Wheat
Wheat opened Wednesday’s session with firm gains, continuing a three-day recovery streak. May 2025 Chicago SRW contracts started at $5.44½ per bushel, building on Tuesday’s 3½ cent increase. The broader wheat complex also advanced, with Kansas City HRW up by 6¼ cents and Minneapolis spring wheat higher by 3¾ cents overnight. Momentum stems from speculative short covering and weather concerns across U.S. wheat belts. The USDA’s latest Crop Progress report indicates winter wheat heading at 5%, consistent with the five-year average, but only 48% of the crop is rated good to excellent — well below the previous year’s 56%. U.S. exports have slowed, and European soft wheat exports are lagging by 34% year-on-year, adding mixed signals to market direction.

Corn
May 2025 corn futures opened at $4.71½ per bushel, extending recent gains after closing 4½ cents higher on Tuesday. Support stems from private export sales to Spain and firm cash market prices averaging $4.40½. The USDA is expected to reduce corn ending stocks in Thursday’s WASDE report, which could further buoy prices. While planting progress has reached 2%, concerns linger over weather conditions in the U.S. Midwest and Plains. Additionally, Brazil’s corn harvest estimates have been revised upward to 123.4 million tons, slightly above earlier forecasts, weighing marginally on bullish sentiment.

Soybeans
Soybeans continued their recovery midweek, with May 2025 contracts opening at $9.96 per bushel, up from Tuesday’s close of $9.92¾. Soymeal prices also firmed, gaining $2.60 per ton, while soyoil retreated slightly. Tensions between the U.S. and China are escalating sharply, with retaliatory tariffs reaching 104% on Chinese goods and 84% on American goods as of this week. Strong export performance to China in recent weeks provided short-term support, but forward-looking demand is clouded by trade risks. The upcoming USDA WASDE report will be closely watched for adjustments to the U.S. balance sheet and global soybean dynamics.

Key Global Drivers Shaping Today’s Grain Markets

India is rapidly emerging as a crucial alternative supplier of rapeseed meal to China, following Beijing’s imposition of a 100% tariff on Canadian imports. In the past three weeks alone, China has purchased 52,000 tons of Indian rapeseed meal — four times its entire imports from India in 2024. This sudden demand surge is supporting India’s local prices and reshaping global protein meal trade flows.

In South America, Brazilian indigenous protesters have lifted a blockade on the vital BR-230 Trans-Amazonian Highway, restoring access to the Miritituba port, which handles more than 10% of the country’s grain exports. The interruption previously delayed 70,000 tons of grain daily. The resolution comes ahead of a scheduled meeting between indigenous leaders and Brazil’s Supreme Court, though poor infrastructure still poses risks for future disruptions.

Weather remains a double-edged sword globally. In the U.S., widespread dryness is expected over the next 10 days, helping to dry out flooded fields in the Midwest while worsening soil moisture deficits in the Plains. Argentina remains cool and dry, while Brazil faces warm and wet conditions — both factors affecting corn and soybean development during critical stages.

US-China trade tensions continue to escalate. After reciprocal tariffs reached 34% last week, new levies of 50% were added by both sides this week, bringing the total to 104% on Chinese goods and 84% on U.S. goods. These developments are expected to severely affect U.S. soybean exports. Despite recent strong shipments to China, purchases are expected to stall post-April 10 when the tariffs fully take effect. U.S. soybean stocks may surge in 2025/26 if reduced Chinese demand persists.

Brazilian soybean exports are off to a record-breaking start in 2024/25, hitting 21.1 million tons in February and March combined. Despite weather-related reductions in output estimates, Brazil remains the dominant global supplier, further strengthening its position amid the U.S.-China trade dispute.

In the EU, soft wheat exports have plunged 34% year-on-year, totaling just 16.4 million tons so far this season. Nigeria, Morocco, and Algeria are leading importers, while barley exports are also down by 19%. Corn imports, on the other hand, have increased by 13%, highlighting shifting dynamics in European grain markets.

Russia’s corn exports are poised for expansion, with estimates suggesting shipments could reach 4 million tons in the 2025/26 season, up from 2.6 million this year. This growth is part of a broader increase in Russian grain output, which may reach 129.5 million tons, excluding newly incorporated regions.

Ukraine's wheat production outlook remains steady at 19.9 million tons for the 2025/26 season. While recent rainfall has improved soil moisture levels, reserves in core wheat-producing regions remain at a six-year low. Continued monitoring of weather and satellite data will determine if revisions are necessary in the weeks ahead.

In the biofuel sector, U.S. Senators and industry leaders are pushing the EPA for higher biodiesel blending mandates. A recommendation was submitted for 5.25 billion gallons for 2026, significantly up from the current 3.35 billion, although slightly below initial expectations. The move aims to boost rural economies and support farm income, especially as crop demand for feedstocks grows.

The U.S. ethanol industry awaits new production and stockpile data later today, with expectations that weekly output has declined. The energy sector's role in grain demand remains critical, particularly for corn, as the ethanol market directly influences consumption patterns.

China’s agriculture ministry has granted preliminary approval for 97 genetically modified corn varieties and 2 soybean types, potentially paving the way for future commercial cultivation. While full certification is still pending, this marks a significant shift in China’s approach to biotechnology and could affect long-term import needs if domestic output increases.

As Wednesday's trading session unfolds, markets remain focused on U.S. stock estimates, weather conditions, and the shifting geopolitical trade landscape. With the USDA’s monthly WASDE report due tomorrow, volatility is likely to increase, and all eyes are on the potential revisions to global supply and demand projections.