Wheat futures ended the session lower, with the May 2025 CBOT contract closing at $5.47 ¾ per bushel, down 8 cents. The wheat market struggled under the weight of strong global competition, particularly from Russia and Ukraine, which continue to dominate export flows. USDA's weekly export inspections report showed 389,593 metric tons of wheat were shipped, a slight improvement from the prior week but still facing stiff competition from Black Sea origins. Meanwhile, ABARES increased its forecast for Australia’s 2024/25 wheat crop to 34.1 million metric tons, up 31% from the previous year, reinforcing expectations of ample global wheat supplies.

Corn futures continued their decline, with the May 2025 contract settling at $4.56 ¼ per bushel, down 13 ¼ cents. Funds continued to liquidate positions ahead of the March 4 implementation of tariffs on China, Canada, and Mexico, raising concerns about potential retaliatory measures. U.S. export inspections showed 1.351 million metric tons of corn were shipped, an improvement from last year but still not enough to support prices. Additionally, the latest USDA report showed that 457.389 million bushels of corn were used for ethanol production in January, a decline of 4.6% from December, reflecting weaker ethanol demand.

Soybeans also faced losses, with the May 2025 contract closing at $10.11 ½ per bushel, down 14 ¼ cents. The market struggled with weak U.S. export sales and an abundant South American harvest. Weekly export inspections showed 695,158 metric tons of soybeans were shipped, a sharp decline from the previous week and 40% lower than the same week last year. Brazil’s soybean harvest is now 50% complete, ahead of last year’s pace, adding to global supply pressures. Meanwhile, concerns over Chinese demand persist, with reports suggesting potential retaliatory tariffs on U.S. agricultural goods in response to upcoming trade measures from the U.S. administration.

Beyond futures markets, several key developments shaped global grain trends. The U.S.-China trade dispute intensified, with Beijing considering tariffs and non-tariff barriers on U.S. agricultural goods in response to Trump's planned tariff increases set to take effect on March 4. The uncertainty surrounding these measures has weighed heavily on market sentiment, particularly in the soybean and corn sectors.

In the wheat market, Russia’s wheat export forecast was revised down by 500,000 metric tons to 42.5 million metric tons due to logistical issues and currency fluctuations, though overall supply from the Black Sea remains strong. Meanwhile, Ukraine’s grain exports remain steady but have declined slightly year-over-year, impacting global trade flows.

Weather remains a crucial market factor, with South America facing varied conditions. While Argentina is experiencing heat risks and heavy rainfall, which could delay harvesting and create mixed impacts on crops, Brazil continues to endure historic drought conditions, particularly in southeastern regions. The ongoing dryness raises concerns for second-crop corn production, further adding uncertainty to supply projections.

In North America, weather conditions varied across key agricultural regions. The Northern Plains remained warm and dry over the weekend, with limited precipitation expected, raising concerns about drought persistence. The Midwest is bracing for a strong storm system, which could bring widespread precipitation, including heavy snow in northwestern areas. Meanwhile, the Central and Southern Plains saw some much-needed rainfall, helping alleviate dry conditions in certain areas.

Logistical and supply chain disruptions continue to impact grain markets. U.S. barge shipments on the Mississippi River have slowed significantly, with corn shipments down 41% and soybean shipments dropping 38.2% week-over-week. In Argentina, the country’s main oilseed workers' union is threatening to strike, potentially disrupting soymeal and soyoil exports. China is also facing logistical bottlenecks, leading to delays in grain imports, further clouding the global supply outlook.

Ethanol and biofuel markets also played a role in recent price movements. U.S. ethanol stocks rose 5.2% to 27.57 million barrels, raising concerns of oversupply. The Biden administration is set to review biofuel mandates, which could impact corn-based ethanol and soybean oil demand. Additionally, Brazil is considering reducing its import tax on corn ethanol, a move aimed at strengthening trade relations with the U.S. while addressing domestic fuel price concerns.

In macroeconomic developments, the U.S. Dollar Index continued to weaken, making American grain exports more competitive globally. However, inflation concerns persist, with the Federal Reserve signaling that interest rates may remain elevated. Crude oil prices stabilized around $70 per barrel, affecting biofuel margins and transportation costs.

Export dynamics remained a key focus, with U.S. wheat shipments showing modest improvements but still struggling to compete with Black Sea suppliers. France’s wheat exports have strengthened slightly, though global competition continues to weigh on prices. Meanwhile, China’s demand for U.S. corn and soybeans has slowed, with Brazil emerging as the primary supplier for both commodities.

Investor sentiment in the grain market remains cautious, with managed money funds reducing long positions in wheat, corn, and soybeans. Uncertainty surrounding U.S. trade policies, South American weather conditions, and sluggish global demand is keeping volatility high. The upcoming USDA WASDE report and Prospective Plantings report at the end of March will be closely watched for further direction.

The global grain market continues to navigate a complex environment of trade uncertainty, weather risks, and shifting demand dynamics. As geopolitical tensions evolve and key market reports approach, traders remain on high alert for any developments that could shift market momentum in the weeks ahead.