Wheat futures opened Monay’s session with the May 2025 CBOT contract at $5.55 ¾ per bushel, showing limited overnight changes after a challenging week. The wheat market has been hit by strong competition from Russia and Ukraine, sluggish U.S. export sales, and ongoing trade tensions. Market participants are closely monitoring weather conditions in key growing areas, particularly in the U.S. Plains, where dryness persists in some regions.
Corn futures began the day with the May 2025 contract trading at $4.69 ½ per bushel, down slightly after a steep decline earlier in the previous week. Lower demand from China, a weaker ethanol market, and steady South American supplies have pressured prices. Market focus remains on U.S. planting prospects and ongoing logistical issues that may affect trade flows in the coming months.
Soybean futures started Monay’s session at $10.25 ¾ per bushel, continuing their recent slide. Increased global supply, aggressive farmer selling in Brazil, and concerns over future Chinese demand have contributed to the bearish tone in the market. Traders are also keeping a close eye on developments surrounding the Biden administration’s biofuel policies and potential tariff escalations between the U.S. and China.
Across the global grain market, several key developments have influenced prices and sentiment. One of the biggest concerns is the escalating U.S.-China trade dispute, with Beijing considering retaliatory measures against U.S. agricultural products. President Trump’s move to raise tariffs on China, Canada, and Mexico is set to take effect on March 4, prompting fears that China may restrict purchases of American wheat, corn, and soybeans. Historically, similar trade conflicts have led to sharp declines in U.S. grain exports and increased reliance on Brazilian and Argentine suppliers.
Meanwhile, Russia’s wheat export forecast has been lowered by 500,000 metric tons to 42.5 million metric tons, reflecting logistical challenges and fluctuating currency values. Ukraine’s grain exports remain steady but have slightly declined year-over-year, further impacting global trade flows. With wheat supply from the Black Sea region remaining strong, U.S. exports have struggled to gain traction in international markets.
Weather conditions continue to play a crucial role in market dynamics. In the United States, above-normal temperatures and periodic rainfall are expected in the Midwest, benefiting early planting. However, drought conditions persist in parts of the Northern and Central Plains, raising concerns about winter wheat development. Argentina is facing potential flooding risks that could delay its corn and soybean harvest, while Brazil continues to grapple with extreme drought conditions in key growing regions. The latest forecast suggests that Brazil’s dryness could persist into mid-March, heightening concerns over second-crop corn production.
Supply chain disruptions remain a major factor influencing market volatility. U.S. barge shipments along the Mississippi River have slowed significantly, with corn shipments down 41% and soybean shipments dropping 38.2% week-over-week. In South America, Argentina’s main oilseed workers' union is threatening to strike, which could impact soymeal and soyoil exports. Additionally, logistical challenges in China are leading to delays in grain imports, adding uncertainty to the global supply outlook.
The ethanol and biofuel sectors also continue to impact grain markets. U.S. ethanol stocks have risen by 5.2% to 27.57 million barrels, increasing concerns about oversupply. Meanwhile, the Biden administration is expected to review its biofuel mandates, a decision that could significantly impact demand for corn-based ethanol and soybean oil for biodiesel production. Brazil is also considering reducing its import tax on corn ethanol, a move aimed at improving relations with the U.S. while addressing domestic fuel price concerns.
Macroeconomic conditions are adding further complexity to grain markets. The U.S. Dollar Index has been weakening, making American grain exports more competitive on the global stage. However, inflation concerns persist, with the Federal Reserve indicating that interest rates may remain elevated for an extended period. Crude oil prices have stabilized around $70 per barrel, impacting transportation and biofuel production costs.
Looking at the broader export landscape, U.S. wheat shipments remain weak, with commitments reaching only 87% of USDA’s export forecast. French wheat exports have shown modest improvements, but competition from Black Sea suppliers continues to weigh on prices. In contrast, China’s demand for U.S. corn and soybeans has slowed considerably, with Brazil emerging as the dominant supplier.
Investor sentiment in grain markets has also shifted, with managed money funds reducing long positions in wheat, corn, and soybeans. Traders remain cautious amid ongoing trade uncertainties, fluctuating South American weather conditions, and sluggish global demand. Market participants are now turning their attention to the upcoming USDA WASDE report and Prospective Plantings report, both of which could provide further direction for grain prices.
The past week has been marked by continued challenges for the global grain market, with downward price pressure across wheat, corn, and soybeans. As geopolitical risks, weather uncertainties, and macroeconomic factors continue to evolve, traders and analysts alike remain on high alert for any shifts that could alter market momentum in the weeks ahead.