Overview

The global grain market experienced significant volatility over the past week, driven by shifting macroeconomic conditions, trade policy developments, supply chain disruptions, and weather-related risks. Wheat and corn futures struggled with weak export demand, while soybeans faced pressure from a record South American harvest. Geopolitical tensions, tariff policies, and logistical bottlenecks further shaped market movements, influencing price trends across key global markets.

Grain Price Movements

Wheat

Wheat futures ended the week lower, with the May 2025 CBOT wheat contract closing at $5.55 ¾ per bushel, down 6 ¾ cents on the day. The market faced pressure from a strong U.S. dollar, poor export sales, and increased competition from Russia and Ukraine. Weekly losses were significant, with Chicago SRW contracts dropping 8.98%, Kansas City HRW falling 8.37%, and Minneapolis spring wheat declining 7.84%. FranceAgriMer reported a slight deterioration in French soft wheat crop conditions, now rated 73% good-to-excellent.

Corn

Corn futures followed a downward trend, with the May 2025 contract closing at $4.69 ½ per bushel, down 11 ½ cents. Weak demand from China, lower ethanol production, and favorable South American weather contributed to the price decline. Managed money funds liquidated 16,079 long positions, reflecting bearish sentiment. U.S. export commitments for the 2024/25 crop year reached 78% of USDA’s annual projection, slightly ahead of the 76% five-year average.

Soybeans

Soybean futures saw declines, with the May 2025 contract settling at $10.25 ¾ per bushel, down 11 ½ cents. Heavy selling pressure from Brazilian farmers and increasing global supply kept prices under pressure. USDA reported a private export sale of 20,000 metric tons of soybean oil, but overall soybean export sales were weak. U.S. marketing year commitments reached 44.147 million metric tons (89% of USDA’s forecast), with actual shipments at 37.009 million metric tons (75% of the projection).

Trade & Policy Developments

The U.S. agricultural trade deficit widened to a record $49 billion, reflecting declining exports in wheat, corn, and soybeans. The market is closely watching President Trump’s proposed 25% tariffs on Mexico and Canada, which are set to take effect on March 4. The uncertainty surrounding these tariffs has caused grain traders to hesitate on long-term commitments, contributing to weaker weekly corn and soybean export sales.

Russia’s wheat exports remain a focal point, with IKAR lowering its export forecast by 500,000 metric tons to 42.5 million metric tons. The 2025 Russian wheat harvest outlook was also revised downward to 77-81 million metric tons, citing logistical challenges and currency fluctuations. Meanwhile, Ukraine's total grain exports reached 29 million metric tons, a 1% year-over-year decline.

Weather & Crop Conditions

Weather remains a critical market driver, influencing both current crop conditions and planting progress in key production regions.

United States: The U.S. Midwest is expected to see above-normal temperatures and consistent rainfall in March, benefiting spring planting.

Argentina: Flood risks have emerged, raising concerns about harvest delays for corn and soybeans.

Brazil: Persistent dryness in central Brazil threatens second-crop corn yields, while recent rains in southern Brazil have helped late-season soybeans.

Black Sea Region: Ukraine and Russia face dry conditions, raising concerns about winter wheat yield potential.

India: Forecasted heatwaves in March could impact wheat production, prompting speculation about potential import tariff adjustments.

Supply Chain & Logistics

U.S. barge shipments on the Mississippi River dropped, with corn shipments down 41% week-over-week and soybean shipments declining 38.2% due to logistical disruptions.

Indonesian palm oil exports fell 10.95% in February as weak global demand weighed on prices.

Argentina’s main oilseed union is threatening strikes, raising concerns over disruptions in soymeal and soyoil exports.

Ethanol & Biofuel Impact

Ethanol demand remains a key factor for the U.S. corn market, while soybean oil demand for biodiesel is also under scrutiny.

U.S. ethanol stocks rose 5.2% to 27.57 million barrels, increasing supply concerns.

The Trump administration is expected to review biofuel mandates, which could influence corn and soybean oil prices.

Macroeconomic Factors

The U.S. Dollar Index continued to weaken, making U.S. grains more competitive in global markets.

Inflation remains a concern, with the Federal Reserve signaling potentially prolonged high interest rates.

Crude oil prices hovered around $70 per barrel, affecting biofuel margins and grain transport costs.

Export & Demand Outlook

U.S. wheat exports remain sluggish, with commitments reaching only 87% of USDA’s export forecast.

French wheat export prospects improved slightly, but competition from the Black Sea region remains strong.

Chinese demand for U.S. corn and soybeans has slowed, with Brazil emerging as the dominant supplier.

Market Sentiment & Outlook

Managed money funds continue to reduce long positions, reflecting cautious sentiment in wheat, corn, and soybeans.

Uncertainty over U.S. tariffs, South American crop conditions, and export demand will keep volatility high.

The March USDA WASDE report and USDA’s Prospective Plantings Report (end of March) will be key market movers in the coming weeks.

Conclusion

The past week has seen significant weakness across wheat, corn, and soybean markets, primarily driven by poor export demand, strong global competition, and macroeconomic uncertainties. South American weather risks, Russia’s wheat market dominance, and logistical disruptions remain key factors shaping price action. With upcoming USDA reports, trade negotiations, and seasonal weather trends, traders are bracing for further volatility in the weeks ahead.