Global Trade and Policy Trends: Realignment and Risks

Throughout the week, global grain markets remained under the heavy influence of shifting trade dynamics, emerging protectionist policies, and structural realignments in sourcing patterns—each creating ripples far beyond regional borders.

One of the most impactful developments was the continued recalibration of grain sourcing by China, which is rapidly deepening its agricultural partnership with Brazil. China’s state-owned trading giant, Cofco International, intensified its presence in Brazil by advancing construction on what is expected to become the world’s largest grain terminal at the port of Santos. With its handling capacity set to triple from 4.5 to 14 million metric tons by 2026, the terminal marks a long-term strategic pivot toward South American suppliers. This expansion sharply contrasts with the global retrenchment seen among U.S. agribusiness giants such as ADM and Cargill, underscoring the growing divide in trade flows due to sustained U.S.–China tensions. The move also reflects China's broader agenda to secure supply chains through direct infrastructure investment abroad.

Meanwhile, trade frictions between the United States and China escalated further. The U.S. announced new tariff increases targeting select imports from China—reaching up to 245% in some categories. Although China's official response remained muted during the week, the lack of immediate retaliation did little to ease underlying market uncertainty. Exporters continue to price in risk premiums for potential disruptions or policy reversals that could hit grain flows, particularly soybeans.

Within the European Union, grain traders faced discouraging news as FranceAgriMer slashed its 2024/25 non-EU soft wheat export forecast to just 3.1 million tons—an astonishing 70% decline from the prior season. EU wheat exports as a whole have fallen 35% year-over-year, totaling only 16.7 million tons to date. This stark underperformance has implications for global supply availability and is triggering internal rebalancing across the bloc. France, Poland, and Spain are expected to receive rainfall that may aid domestic yields, but the export lag remains a pressing concern.

Algeria played a prominent role in global demand, issuing a significant wheat tender and purchasing between 600,000 and 630,000 metric tons. The move not only reflected strong North African demand amid tightening food security budgets, but also served to stabilize global prices momentarily during the week. However, as Algeria continues to diversify sourcing—eyeing Black Sea and European suppliers over U.S. wheat—the implications for U.S. exporters could be negative over the longer term.

In South America, Argentina maintained an aggressive export posture despite domestic challenges. With the peso now floating freely between 1,000 and 1,400 per U.S. dollar, Argentine farmers have increased shipments to capitalize on currency devaluation. The temporary reduction of export taxes—from 12% to 9.5%—is also helping incentivize overseas sales. However, policy continuity remains in question as the June expiration of the tax reduction nears. Market watchers are closely monitoring whether President Javier Milei’s administration will extend these incentives to sustain competitiveness, especially as Brazil continues to dominate regional soybean trade.

Another critical policy narrative emerged in the renewable fuel space. The U.S. biofuel industry, especially renewable diesel producers, is pushing for a dramatic expansion in blending mandates under the Trump administration. Groups like Montana Renewables are lobbying for the national quota to double to 7.3 billion gallons. While still at the discussion stage, such policy shifts could significantly alter domestic corn and soy oil demand trajectories, adding a bullish undertone to longer-term price expectations—especially if aligned with rising global decarbonization goals.

Indonesia also came into the spotlight with biofuel policy developments. The government is considering raising its palm oil blending mandate beyond the current 40%, a move that would reduce exportable volumes and tighten global vegetable oil markets. With palm oil already under pressure from fluctuating output and rival oils like sunflower and soy trading at competitive levels, any Indonesian policy shift could have far-reaching effects on price dynamics across Asia and beyond.

Collectively, these developments paint a complex picture of fragmentation and realignment. Trade policies are increasingly being shaped by strategic energy agendas, domestic political pressures, and long-term food security concerns. For traders and analysts alike, the takeaway is clear: understanding grain markets in 2025 requires not just tracking weather and crop conditions, but also decoding an ever-shifting geopolitical and economic landscape where policy signals often outweigh agronomic fundamentals.

Weather: A Critical and Shifting Variable

Weather played a central role in shaping market sentiment this week. In the U.S., cooler-than-normal temperatures in the Northern Plains delayed spring sowing efforts, while rains in the Southern Plains brought much-needed relief to dry soils in Kansas and Texas. However, overly saturated fields across parts of the Corn Belt, from Iowa to Missouri, created uncertainty around planting schedules for corn and soybeans.

Europe also faced weather variability. France, Germany, and Poland were forecast to receive beneficial rains, which could alleviate drought stress for rapeseed crops. Still, persistent soil moisture deficits in parts of Germany and Poland continued to pose risks to both oilseed and grain yields. Meanwhile, Bulgaria reported improving conditions, supporting its inclusion in favorable harvest outlooks.

In South America, conditions were mixed. Argentina saw slower-than-normal harvest activity due to intermittent rainfall, but weather forecasts suggest a more favorable harvest window ahead. In Brazil, rain is still desperately needed in central regions to support Safrinha corn development. While long-term forecasts offer some hope, concerns over water availability and yield stability remain widespread.

Black Sea Region Spotlight: Trade Uncertainty and Weather Delays Shape Regional Outlook

The Black Sea and Danube regions remained a critical focus in global grain markets this week, facing layered pressures from political developments, weather disruptions, and shifting trade routes. Political rhetoric from Romanian presidential candidate Victor Ponta—who pledged to block Ukrainian grain transit through Constanța if elected—introduced a major risk to what has become a crucial export corridor for Kyiv. Since 2022, over 29 million tons of Ukrainian grain have flowed through Romanian ports, and any disruption could significantly impact both regional logistics and global supply chains. Meanwhile, ongoing uncertainty around U.S.–EU tariffs continues to stall trade sentiment across Ukraine, Russia, and Romania.

Spring planting across the region is lagging, with wet soils and machinery delays hampering sowing activities for sunflower and soybean crops. While winter crops are reported in stable condition, the narrow window for spring planting raises questions about full yield potential, especially if unfavorable weather persists. In terms of cropping trends, a 17% increase in rapeseed area and a 4% decline in sunflower plantings are projected, as cereals like wheat and barley attract renewed interest from growers. Bulgaria’s growing biodiesel industry gained attention with the arrival of a Panamax-class vessel carrying 58,000 tons of Canadian rapeseed for domestic processing—underscoring the country's pivot toward high-value oilseed products.

Despite relatively abundant sunflower seed stocks in Ukraine and Russia, regional sunflower oil prices are under pressure due to subdued demand and stronger competition from Argentina. Argentinian sunflower oil is now priced $20/ton below Black Sea offers to Turkey, adding to concerns as Turkey’s reduced-duty import window closes on April 30. Currency appreciation in Russia and Poland is also weakening competitiveness in export markets, just as global vegetable oil markets face renewed softness. As the region prepares for early harvest season, the combination of trade risks, delayed planting, and fluctuating demand will keep the Black Sea firmly in the spotlight.

Futures Market Performance: May 2025 Contracts in Focus

Wheat futures posted modest gains over the course of the week, supported by fresh export activity and weather-related concerns in key growing areas. The May 2025 CBOT wheat contract began the week at $5.47½ per bushel and closed slightly higher at $5.48¾ on Thursday, reflecting cautious optimism. Kansas City HRW wheat futures remained steady to slightly lower, reflecting continued concerns over winter wheat conditions in the U.S. Midwest and Plains. Meanwhile, Minneapolis HRS futures gained between 1 and 3 cents by week’s end, showing resilience amid poor crop condition reports.

Corn futures showed mixed performance throughout the week. The May 2025 contract started at $4.85 per bushel and ended at $4.82¼, down 2 cents on the day and 8 cents for the week. While solid weekly export sales helped anchor sentiment—topping 1.5 million tons—weather delays in the U.S. corn belt weighed on trader confidence. Despite Brazil raising its ethanol output forecast and Argentina’s harvest advancing beyond the five-year average, persistent rain forecasts and slow planting progress in the U.S. capped upward momentum.

Soybeans ended the week on a slightly weaker note. The May 2025 futures contract opened at $10.41¾ and closed at $10.36½ per bushel on Thursday, shedding 6¼ cents over the week. Export activity remained robust, with weekly sales reaching a five-week high of 554,806 tons. However, bearish pressure from slow harvest progress in Argentina and subdued Chinese buying interest, combined with a stronger-than-expected U.S. tariff hike on China, limited price support. Soymeal and soy oil markets also reflected the cautious tone, with soymeal softening and soy oil showing marginal gains.

Biofuel and Energy: Supporting the Grain Complex

Biofuel markets were an important source of support for grain prices this week. In the U.S., weekly DOE data showed a 0.8% decline in ethanol stocks to 26.814 million barrels, while daily production dipped slightly to 1.012 million barrels. Although modest, these figures were viewed as steady, helping to underpin corn prices amid broader uncertainty.

Brazil’s CONAB raised its ethanol production forecast to 37.19 billion liters, with much of the increase driven by sugarcane. In Argentina, bioethanol production reached a record 1.21 million cubic meters in 2024. Corn-based ethanol comprised 60% of the total, but the country still lags behind Brazil and the U.S. in conversion rates. However, with E17 and E70 fuel blends under pilot testing in provinces like Córdoba, the sector’s growth potential is significant. Such developments may enhance demand for corn and bolster long-term sustainability objectives.

Mixed Signals, Strategic Realignments, and Continued Caution

This past week’s grain market performance reflected a complex blend of supply-side optimism and demand-side hesitancy. Futures markets displayed resilience but stopped short of a sustained rally as traders balanced improved export figures with trade friction, weather delays, and shifting macroeconomic fundamentals.

Looking ahead, key areas of focus will include planting progress across the U.S. and Ukraine, weather developments in South America, and policy updates concerning biofuel quotas and international trade relations. As we move deeper into the second half of April, the grain market is likely to remain sensitive to even minor shifts in weather forecasts, export numbers, and geopolitical rhetoric.

The cautious tone set this week is likely to persist as global players continue to adapt to the fluid dynamics of a market in transition. For now, resilience, flexibility, and vigilance remain the key watchwords for producers, traders, and policymakers alike.