Core Market Drivers

Wheat is leading the downside early Tuesday, with Chicago contracts trading sharply lower following Friday’s weakness. Although March was still higher on a weekly basis last week, renewed selling pressure reflects fund-driven momentum and positioning after recent profit-taking. Spec funds increased their net short exposure in both CBOT and Kansas City wheat, reinforcing bearish technical sentiment despite solid export commitments.

Export fundamentals remain constructive for wheat, with USDA data showing total export commitments at 22.467 MMT, up 16% from last year and already reaching 92% of USDA’s annual projection. However, markets appear focused on supply-side developments, including IKAR’s upward revision of Russia’s 2026 wheat crop to 91 MMT and favorable French crop ratings at 91% good/excellent.

Russian logistics and geopolitical risk remain in focus after reported drone strikes near the Black Sea port of Taman, a major export facility handling grains and energy cargo. While physical export flows continue, shipping difficulties and new export quotas introduce near-term uncertainty, which can lend episodic support but have not yet reversed broader selling pressure.

India added another variable to global wheat trade by partially relaxing export restrictions, permitting 2.5 MMT of wheat exports. With record domestic production and rising reserves, India’s re-entry into global markets could ease tightness in import-dependent regions and weigh on global price sentiment over time.

Corn futures are also down early Tuesday, pressured by broad commodity softness despite strong export commitments. USDA data shows corn commitments at 60.805 MMT, 31% above last year and aligned with the average pace at 73% of USDA’s projection. However, managed money has recently trimmed short exposure, reducing immediate short-covering fuel.

Brazil’s first corn crop is 22% harvested, lagging last year’s pace, while second-crop planting sits at 31%, also behind 2025. Although progress is slower, production projections remain large at 138 MMT, limiting upside momentum for U.S. corn. Domestic consumption in Brazil is projected higher, but export potential remains substantial.

Soybeans are trading 2 to 4 cents lower this morning as markets await today’s NOPA January crush report. Analysts expect crush at 218.5 mbu, which would mark the largest January crush on record despite winter weather disruptions. Soybean oil stocks are projected to rise to a 20-month high at 1.71 billion lbs, tempering bullish oil enthusiasm.

Brazil’s soybean harvest is 21% complete, slightly behind last year, as heavy rains in Mato Grosso and the center-north slow fieldwork. While rains support late crop development, persistent subsoil moisture deficits raise concern for the upcoming safrinha corn crop. Argentine crop areas continue to experience scattered storms with uneven benefits, keeping production risk elevated.

Vegetable oil markets add mixed signals. Malaysian palm oil exports fell 11.24% month-over-month in early February, while India’s evolving trade stance on GM soybean oil and feed imports introduces demand uncertainty. Biofuel policy remains a background driver, especially as crush margins and ethanol blending debates continue to shape grain usage expectations.

Wheat:
Mar ’26 CBOT wheat closed at $5.48 3/4, down 3 3/4 cents, and is currently down 9 1/4 cents this morning. Early weakness reflects increased fund short exposure, improved Russian crop projections and softer technical momentum despite strong export commitments.

Corn:
Mar ’26 CBOT corn settled at $4.31 3/4, up 1/2 cent Friday, but is down 2 3/4 cents in early Tuesday trade. Strong export commitments and firm domestic demand are offset by large Brazilian supply projections and cautious positioning.

Soybeans:
Mar ’26 CBOT soybeans closed at $11.33, down 4 1/4 cents, and are down 3 3/4 cents early Tuesday. Traders are focused on today’s NOPA crush data, rising oil stocks and weather-driven harvest delays in Brazil for direction.