Wheat futures in Chicago for the March 2025 contract started Friday at $5.87 ¾ per bushel but ended the session lower at $5.82 ¾, down 5 cents. Kansas City HRW and Minneapolis spring wheat followed a similar trajectory, with small losses across the board. Despite the pullback, wheat markets saw a solid week, with March CBOT wheat posting a 23 ¼-cent gain. Managed money traders trimmed their net short positions in wheat, suggesting some short covering, while USDA export sales showed total commitments at 18.768 MMT, an 8% year-over-year increase. However, wheat stocks in Canada were reported higher than expected at 24.481 MMT, putting additional pressure on the market.
Corn futures opened the session at $4.95 ¼ per bushel for March 2025 but dropped throughout the day to settle at $4.87 ½, down 7 ¾ cents. Despite Friday’s losses, corn maintained weekly gains of 5 ½ cents. Traders took a cautious stance ahead of President Trump’s expected announcement on reciprocal tariffs, fueling risk-off sentiment. The CFTC’s Commitment of Traders report showed large managed money speculators increasing their net long position to 364,217 contracts, the largest in nearly three years, with total outright longs hitting a record 447,897 contracts. Argentine corn conditions deteriorated, with the Buenos Aires Grain Exchange (BAGE) lowering good-to-excellent ratings by 3 percentage points to 25%, while poor ratings increased to 26%. Meanwhile, Brazil’s Agriculture Ministry reported that January corn exports reached 3.59 MMT, down 26% from a year earlier.
Soybeans for the March 2025 contract began the session at $10.58 ¾ per bushel before declining to close at $10.50, down 8 to 12 cents across the complex. Soybean meal fell $5 to $6, while soybean oil managed slight gains of 40 to 60 points, drawing support from palm oil’s 2% overnight increase. Weakness in soybeans came as traders digested a mixed fundamental backdrop. Argentina’s soybean ratings declined, with only 17% of the crop in good-to-excellent condition, while 32% was rated poor, up from last week. In contrast, Safras & Mercado raised Brazil’s 2024/25 soybean production forecast by over 1 MMT to 174.9 MMT, far above the USDA’s 169 MMT projection. However, export flow struggled, with Brazil’s soybean exports for January reaching just 1.07 MMT, significantly below the 2.85 MMT shipped in January 2024.
Geopolitical developments and trade policy remain key factors driving the grain markets. President Trump’s announcement of reciprocal tariffs next week created uncertainty, leading traders to take a more defensive position ahead of the weekend. Markets are particularly focused on how U.S. agricultural exports might be affected, with China’s retaliatory tariffs on American goods raising concerns over future demand. Additionally, Russia’s Agriculture Ministry has raised its wheat export tax by 1% to 3,984.20 roubles/MT, adding another layer of complexity to global wheat trade.
The latest Commitment of Traders report indicated continued shifts in speculative positioning. While managed money traders trimmed their net short in wheat, they expanded their already massive long position in corn to over 470,000 contracts, marking the largest bullish stance in nearly three years. This imbalance between corn and wheat positioning has led to a widening spread between the two markets, further reinforcing speculative-driven price movements.
Weather continues to be a dominant factor influencing grain markets. In South America, Argentina is experiencing extreme heat and dryness across its central and northern regions, with the Buenos Aires Grain Exchange lowering crop ratings for both corn and soybeans. Relief is expected by midweek with cooler temperatures and rain, but long-term forecasts remain uncertain. Meanwhile, in Brazil, reduced shower activity in key soybean-growing regions is expected to facilitate faster harvest progress, aiding both the soybean and second-crop corn planting efforts in the second half of February.
The supply picture is also shifting. Stats Canada reported wheat stocks at 24.48 MMT as of December 31, exceeding expectations of 23 MMT and significantly higher than last year’s 20.68 MMT. Meanwhile, Canadian canola stocks were reported at 11.38 MMT, below market expectations of 11.9 MMT and sharply lower than the 12.85 MMT recorded a year ago. This tightening supply helped support vegetable oil markets, with soybean oil futures finding some strength from lower canola availability.
Export trends continue to shape market sentiment. USDA data showed total U.S. wheat export commitments at 18.768 MMT, marking an 8% increase from last year. Corn exports for the marketing year stood at 44.767 MMT, up 28% year-over-year and now at 72% of USDA’s estimate, slightly ahead of the historical pace. However, soybean exports lagged, with Brazil’s January shipments notably below last year’s levels, raising concerns about global soybean demand trends.
Cold weather forecasts are adding another layer of uncertainty to the wheat market. Much colder temperatures are expected to hit the Black Sea region and the U.S. Southern Plains next week. Snow cover will be critical in protecting winter wheat crops from potential winterkill, as much of the region currently lacks adequate protection. Any further disruptions to Russian wheat production could have ripple effects across the global wheat supply chain.
As markets head into the new trading week, traders will closely monitor trade policy developments, South American weather conditions, and speculative fund movements. With geopolitical uncertainty, shifting demand dynamics, and evolving weather patterns, the global grain markets remain highly volatile, with potential for significant price swings in the coming sessions.