Wheat
The global wheat market is experiencing supply-side shifts due to China's recent decision to delay or redirect up to 600,000 metric tons of wheat imports, predominantly from Australia and Canada. This move follows a bumper wheat and corn harvest in China, reducing the need for imported grain and pressuring global wheat prices, which have struggled to maintain levels above $6 per bushel. Additionally, European wheat exports have declined significantly, with EU soft wheat exports dropping 37% year-over-year to 12.5 million tons as of February 2. Major destinations for EU wheat include Nigeria, Morocco, and the UK, though overall shipments remain sluggish compared to last season.

Corn

Corn markets remain in flux due to shifting global trade flows and domestic stockpiling efforts. China has continued to expand its domestic corn stockpiling program in northeastern regions, signaling a potential reduction in import demand. Meanwhile, Brazil’s corn prices are rising as sellers hold back supplies despite firm demand, while U.S. corn used for ethanol production declined 2.3% year-over-year to 473.2 million bushels in December. These developments, along with fluctuating export sales data, create an uncertain outlook for global corn trade.

Soybeans

Soybean markets are facing headwinds due to geopolitical trade tensions and evolving production estimates. China’s latest retaliatory tariffs against the U.S. exclude soybeans, temporarily boosting market confidence. However, Brazil’s ongoing harvest, with completion at around 9% as of January 30, is creating bearish pressure. Forecasts for Brazil’s 2024/25 soybean crop vary, with Celeres raising its estimate to 174 million metric tons while StoneX revised its forecast downward to 170.9 million metric tons, citing dry weather risks. Additionally, Argentina’s soybean and corn crops are under strain from worse-than-expected drought conditions, adding further uncertainty to global supply expectations.

China’s Wheat Import Delays Could Weigh on Global Prices

China has postponed or redirected 600,000 metric tons of wheat imports, predominantly from Australia and Canada, citing ample domestic supplies following a strong local harvest. The move is expected to pressure wheat prices globally, with traders in Southeast Asia receiving redirected shipments.

EU Wheat Exports Plummet Amid Competitive Pressures

EU soft wheat exports have fallen 37% year-over-year, totaling 12.5 million tons as of February 2, compared to 19.8 million tons in the same period last year. Key buyers include Nigeria, Morocco, and the UK, but overall shipments lag behind last year’s pace, signaling increased competition from Black Sea and U.S. wheat suppliers.

Brazil’s Soybean Harvest Delays Raise Supply Concerns

The 2024/25 soybean harvest in Brazil remains behind last year’s pace, with completion at just 9% as of January 30. Weather issues continue to impact yields, prompting varying production forecasts. Celeres raised its estimate to 174 million metric tons, while StoneX revised its estimate downward to 170.9 million metric tons.

U.S. Corn and Ethanol Market Sees Demand Shifts

U.S. corn used for ethanol production declined 2.3% year-over-year to 473.2 million bushels in December. Meanwhile, China is expanding domestic corn stockpiling, potentially reducing import demand. These factors contribute to uncertainty in the U.S. corn export outlook.

Argentina Faces Severe Drought Conditions

Argentina’s soybean and corn crops are under increasing stress due to drought, with satellite imagery indicating worse-than-expected moisture levels. This has led to speculation that yields may decline further, affecting global soybean and corn supply expectations.

Russia Lowers Wheat Export Duty Amid Supply Adjustments

Russia has reduced its wheat export duty by 11% to 3,941.6 rubles per ton, alongside reductions in duties on barley and corn. This adjustment follows fluctuating domestic and global grain prices, as Russia remains a key supplier to international markets.

Ukraine Aims to Expand Grain Processing in Egypt

Ukraine is seeking to establish a grain processing hub in Egypt’s Suez Canal Economic Zone, enabling it to export processed grain products such as flour and pasta to countries with free trade agreements with Egypt. This move could reshape trade flows and add value to Ukraine’s grain exports.

New U.S. Tariffs to Influence Grain and Input Costs

The U.S. has imposed new tariffs, including a 25% levy on Mexican and Canadian imports and additional 10% tariffs on Chinese goods. This policy shift is expected to influence agricultural trade, potentially raising input costs for U.S. farmers and impacting global grain markets.