The past week saw mixed movements in global financial and commodity markets. The EUR/USD currency pair rose by 0.0164 to 1.0492, reflecting broader market shifts. U.S. WTI light crude oil prices dropped by 0.26 USD/barrel, settling at 70.74 USD/barrel by week’s end.

On Friday, crude oil prices fell as global economic concerns pressured demand expectations. Meanwhile, political uncertainty increased as discussions around potential U.S. trade tariffs intensified. Reports indicated that President Trump is considering new tariff measures, which could significantly impact global trade flows, especially in the agricultural and energy sectors. Market participants remain wary of potential retaliatory actions from key trade partners, including China, Mexico, and Canada.

Over the past week, CBOT March SRW wheat futures rose by 17 1/4 cents, closing at $6.00 per bushel. The rally was fueled by strong export sales, with U.S. weekly wheat commitments reaching a seven-week high of 569,561 metric tons. Strategie Grains also raised its European wheat production estimate, providing additional price support.

Chicago March corn futures gained 8 3/4 cents over the week, ending at $4.96 1/4 per bushel. Brazil's corn production estimate was revised upward by CONAB to 122.01 MMT, increasing expectations of global supply growth. Meanwhile, U.S. corn export sales reached 1.649 MMT for the week, signaling continued strong demand from international buyers.

March soybean futures in Chicago declined by 13 1/2 cents over the week, closing at $10.36 per bushel. While Brazilian soybean production estimates were trimmed slightly, expectations remain high for a record harvest. U.S. export sales for soybeans, however, were at their second-lowest level of the marketing year, contributing to price fluctuations.

Accumulated US export sales for the week ending February 06.

*Source: USDA

Weather:

The past week's weather was a crucial factor for global crop conditions. In the United States, winter wheat-growing regions faced cold temperatures with limited snow cover, increasing the risk of winterkill. The Corn Belt experienced intermittent snow and freezing rain, which could disrupt logistics.

In South America, Brazil's soybean harvest continued at a slow pace, hampered by excessive moisture in key growing regions. However, forecasts for the coming weeks suggest drier conditions, which could accelerate harvesting efforts. Argentina received scattered rainfall, but the overall soil moisture profile remains below optimal levels, posing risks to corn and soybean yields.

Looking ahead, the 10-day forecast suggests continued cold across the U.S. Northern Plains, while the Central and Southern Plains may experience warmer-than-average conditions. Western Europe is expected to remain dry with moderate temperatures, while Russia is set for colder conditions with sporadic snowfall. In South America, Brazil's rainfall is expected to diminish but remain active in key agricultural zones.

GRAIN EXPORTS:

* US (September- August)  /  * Russia, Ukraine and the EU (July- June)

U.S. wheat and corn export demand remained firm, while soybean shipments struggled. EU wheat exports continue to lag behind last year’s pace, with a widening gap of 7.2 million tons. Russian wheat exports averaged around 500,000 metric tons per week, a level considered weak for the country’s usual export activity. Ukrainian wheat exports also slowed, dropping below 200,000 metric tons per week.

Corn exports from the U.S. remained robust, with total commitments reaching 75% of the USDA’s annual forecast. Meanwhile, Argentine corn crop conditions showed further deterioration, with only 28% rated as good-to-excellent, while 22% were classified as poor. The Buenos Aires Grain Exchange projects Argentina's corn production at 46 MMT, down 4% from previous estimates.

USDA  -  February 2024

Wheat – USDA

In its February report, the USDA left global wheat production largely unchanged. Consumption in Iran was reduced, while overall growth was driven by smaller wheat-consuming countries. China's ending stocks are projected at 130.60 million tons (previously 133.10 and 134.50), while Russia’s stocks are expected at 9.74 million tons (9.24 and 10.67). Russian wheat exports are forecast at 45.5 million tons (previously 46 and 55.50), while the EU is projected to export 28 million tons (29 and 37.97). Ukraine’s exports are expected to reach 15.5 million tons (16 and 18.58), and Turkey’s at 7 million tons (7.5 and 10). The EU is expected to import 11 million tons (11.5 and 12.65), while China’s wheat imports are forecasted at 8 million tons (10.5 and 13.64).

Corn – USDA

Brazil's corn harvest is projected at 126 million tons (127 and 122), while Argentina’s is estimated at 50 million tons (51 and 50). China’s ending stocks are expected at 203.18 million tons (206.18 and 211.29). Brazil’s corn exports are forecasted at 43 million tons (44 and 46.47), while Ukraine is expected to export 22 million tons (23 and 29.49). Vietnam’s corn imports are projected at 12.8 million tons (12.2 and 11.30), with China’s corn imports forecast at 10 million tons (13 and 23.41).

Wheat and corn imports into China have dropped sharply from the previous season to long-term lows, with a significant decline in corn imports in particular.

Soybeans – USDA

Argentina’s soybean production is projected at 49 million tons (52 and 48.21), while Paraguay’s is estimated at 10.7 million tons (11.2 and 11). Argentina’s ending soybean stocks are forecast at 25.95 million tons (28.95 and 24.05).

As expected, South American crop estimates were lowered. Recent rainfall in Argentina is expected to keep current projections stable in the USDA’s March report. It is still too early to adjust forecasts for Brazil’s second corn production.

Wheat Market Performance

On Friday, wheat futures in Chicago and Paris rose. The market assessed the approaching cold weather in the United States as a risk factor, particularly for areas with little snow cover. Dry and cold weather in the Black Sea region also contributed to price increases. In France, 73% of soft wheat crops were rated in good-to-excellent condition, up 5% from last year. Western Australia’s grain harvest reached 22.4 million tons, the third-largest on record (compared to 19.9 million tons in December). Wheat production was 12.5 million tons (+1.6), barley 5.9 million tons (+0.8), and canola 2.87 million tons (+0.040).

Cold weather in the United States was expected, but the anticipated snow cover did not materialize. Conditions remain highly variable even within wheat-growing regions, making it difficult to assess the situation. A period of extreme cold is set to last for several days. Drought conditions persist across many U.S. wheat-growing areas, while Russia also faced drought with limited snow cover, fueling the wheat rally. Russia’s winter wheat crop conditions are the worst in a decade.

Wheat export supplies are declining, and Russian wheat exports have fallen below 600,000 tons per week, forcing the market to reassess the situation. Any peace negotiations in the Black Sea region, regardless of their outcome, would stabilize the market and remove the risk premium on Ukrainian grain. A year from now, Ukraine’s agricultural sector is expected to recover in previously war-affected areas, increasing global grain supply.

For now, however, this remains speculative. Declining global wheat stocks and weather risks could push prices up by 15–20 USD/ton in April. Currently, wheat prices are moderately high. An unusual situation unfolded during the week, where current wheat contracts in Paris fell slightly, while prices for the next crop rose sharply, indicating anticipated supply issues in the next season. Problems in the Black Sea region remain unresolved, and potential issues in the U.S. could emerge.

Russian analysts now state that cheap Russian wheat will no longer be available on global markets. Russian farmers can no longer afford to sell at low prices due to rising costs. Wheat stocks in Russia and Ukraine are expected to be too low to support exports, even if production remains weak. After several years of stock growth, supplies are now tight, eliminating the possibility of low prices.

Corn Market Performance

On Friday, corn futures in Chicago and Paris rose, except for the March contract in Paris, which remained unchanged. The USDA reported a private export sale of 100,000 tons of corn to Colombia.

On Friday, the Buenos Aires Grain Exchange reported that only 16% of Argentina’s corn crops were rated good-to-excellent (-9% from the previous week), while 33% were rated in poor condition (up from 26%). Despite recent rainfall, crop ratings continue to deteriorate rapidly.

South American Harvest Outlook

Brazil’s soybean harvesting campaign is progressing at an average pace, supported by drier weather. Initial concerns about planting delays for Brazil’s second corn crop have now subsided. In Argentina, conditions initially caused concern, but rainfall over the past two weeks has eased fears.

However, some early-planted corn fields suffered significant damage from prolonged drought. The total corn production is expected to fall below 50 million tons, but as long as production does not decline below 45 million tons, the impact on prices will be limited.

Corn has been the leading grain in global markets in recent months. However, wheat prices have now declined enough to become more attractive for feed use. Traders in Chicago hold relatively low wheat contracts, and the coming weeks will be crucial in shaping market trends.

Key Factors Impacting Corn Prices

Is there anything that could push corn prices higher? The most likely factor is the South American production.

The USDA’s current outlook for Brazil is optimistic, yet prices remain firm. Even the large U.S. corn production did not cause a price collapse. Over the past few months, U.S. corn stocks were reduced by 13 million tons to 39 million tons, which is not an excessive level given consumption rates.

Brazil is now planting its second corn crop. Could a weaker-than-expected harvest impact global prices? The margin for error this time is very small.

The USDA forecasts Brazil's total corn production at 126 million tons, with the first production at 32 million tons and the second crop at 94 million tons. Domestic consumption is projected at 87.5 million tons, including 64 million tons for feed use. Brazil’s corn exports are expected to reach 43 million tons, while imports are forecasted at 1.4 million tons.

If production falls to 119–122 million tons, Brazil’s ending stocks could be wiped out, forcing prices to curb domestic consumption. Argentina’s stocks are also tight at 2.79 million tons, with production forecast at 50 million tons and exports at 36 million tons.

Drought conditions could lower Argentina’s production to 45–46 million tons, which would reduce exports. Even with a strong U.S. corn crop, stocks have not grown and have actually decreased by 5 million tons compared to last season.

With this tight global corn balance, feed wheat consumption has risen. However, wheat prices have also climbed.

The 2025/26 season is likely to start with high prices, as indicated by rising wheat contracts in Paris. However, StoneX analysts project Brazil’s second corn production at 101.7 million tons, which could ease the global supply outlook.

Considering that European and Ukrainian corn crops were weak in 2024 but unlikely to decline further in 2025, some relief in the balance could emerge in the next season, especially if U.S. farmers increase corn acreage to 95 million acres.

Soybean Market Performance

On Friday, soybean and soymeal futures in Chicago rose, while soyoil futures declined. Rapeseed futures in Paris and canola futures in Canada increased.

U.S. soybean processing in January is expected to reach 5.56 million tons (+10.1% year-on-year). South Korea purchased 60,000 tons of soymeal.

China is accelerating the development of genetically modified crop varieties with a 2028 target, aiming to boost domestic production. The Buenos Aires Grain Exchange rated 15% of Argentina’s soybean crops in good-to-excellent condition (-2% for the week), while 36% were in poor condition (up from 32%).

Trade & Policy Developments

Trade tensions remain at the forefront of market considerations. The U.S. is reportedly evaluating new tariffs on imports from China, Mexico, and Canada. If implemented, these measures could significantly disrupt global trade flows, impacting both agricultural exports and input costs for U.S. farmers.

In Europe, the EU has announced new tariffs on fertilizers and agricultural imports from Russia and Belarus. These measures are intended to counteract the economic impact of the war in Ukraine but are expected to raise production costs for European farmers.

Argentina’s government voided a major river dredging auction for the Parana River, citing concerns over corruption in the bidding process. This could lead to logistical disruptions for Argentina’s grain exports, as the Parana River serves as the main export route for its agricultural products.

The past week highlighted key market dynamics across the grain complex, with strong wheat export sales, stable corn demand, and fluctuating soybean market fundamentals. Weather remains a critical factor, particularly in South America, where harvest delays in Brazil and deteriorating conditions in Argentina are shaping price movements.

With geopolitical uncertainty looming and potential trade disruptions on the horizon, the global grain market remains highly sensitive to policy developments. As market participants look ahead, weather patterns, trade policies, and export demand will continue to drive price action in the weeks to come.

Changes in FOB prices of major exporters in recent days:

During the week, FOB prices for agricultural commodities increased with a few exceptions.

Wheat – FOB wheat prices rose for the fourth consecutive week. The FOB price of Bulgarian wheat reached 246 USD/ton (+$2/ton for the week and +$3/ton the previous week). The FOB price of Australian milling wheat stood at 237 USD/ton (+$4 for the week and +$6 the previous week), while 10% protein wheat was priced at 233 USD/ton (+$5 for the week and +$6 the previous week). Australian feed wheat was priced at 204 USD/ton ($200 the previous week). Wheat prices from Australia increased for the second consecutive week, signaling that the global uptrend remains stable.

Corn – FOB corn prices increased, except in Ukraine. During the week, the FOB price of Brazilian corn rose by 4 USD/ton to 238 USD/ton (+$2 the previous week).

Soybeans – FOB soybean prices in the United States and Argentina declined, while Brazilian prices remained stable. The FOB price of Brazilian soybeans remained unchanged (+$12 the previous week) at 388 USD/ton. The price gap between U.S. and Brazilian soybeans narrowed sharply to 23 USD/ton (compared to $25 the previous week and $41 two weeks ago).

Over the past week, global vegetable oil prices increased.

Export prices Black Sea, USD/mt (compared to the previous week):