Wheat futures opened today’s session with the May 2025 CBOT contract at $5.36 ¾ per bushel, reflecting ongoing weakness in the market. The wheat sector continues to struggle against strong global competition, particularly from Russia and Ukraine, which dominate export flows. China’s 15% tariff on U.S. wheat imports further complicates the outlook, as Chinese buyers have nearly eliminated purchases of American wheat. Meanwhile, EU wheat exports dropped 37% year-over-year, totaling 13.93 million metric tons for the season to date, down from 22.04 million metric tons the previous year. Japan issued a tender for 94,282 metric tons of wheat from the U.S., Canada, and Australia, but competitive Black Sea wheat remains a challenge for U.S. exporters.

Corn futures began the session with the May 2025 contract trading at $4.51 ½ per bushel, after falling 4 ¾ cents in the previous session. The market remains under pressure from new tariffs, as China imposed a 15% import duty on U.S. corn, further limiting export demand. At the same time, Mexico and Canada have responded to President Trump’s 25% tariffs with countermeasures, adding more uncertainty to North American trade. Open interest in corn futures dropped by 13,760 contracts, signaling liquidation of long positions amid ongoing trade uncertainty. The U.S. Energy Information Administration (EIA) is set to release weekly ethanol production data, which could provide further direction for the market.

Soybean futures opened Wednesday’s session with the May 2025 contract at $9.99 per bushel, showing signs of stabilization after falling 12 ½ cents in the prior session. The market remains under pressure as China suspended imports from three major U.S. soybean exporters while imposing a 10% tariff on U.S. soybeans. These measures follow Beijing’s broader trade retaliation against the U.S. amid escalating tensions. Brazil’s soybean harvest is now 50% complete, further increasing global supply and pressuring U.S. export demand. Additionally, USDA reported a private export sale of 20,000 metric tons of soybean oil to an unknown destination, but overall sentiment remains bearish due to China shifting its purchases to South America.

Key Market Developments and Global Trade Trends

The ongoing U.S.-China trade war continues to weigh on global grain markets. Beijing’s new 10%-15% tariffs on American crops, including wheat, corn, and soybeans, have significantly reduced U.S. export potential. At the same time, China has raised its domestic grain production target for 2025, aiming for 700 million metric tons, a move intended to enhance food security and reduce reliance on U.S. imports.

Russia’s wheat export forecast remains at 42.5 million metric tons, despite logistical challenges and currency fluctuations. However, soil moisture levels in key Russian wheat regions are at a six-year low, raising concerns over yield potential for the upcoming harvest. Meanwhile, Ukraine’s grain exports have slightly declined year-over-year, but the country remains a strong competitor in global markets.

Weather conditions remain a critical factor in grain price movements. Argentina is experiencing heavy rainfall and potential flooding, which could delay corn and soybean harvesting, adding uncertainty to global supply chains. In contrast, Brazil continues to face extreme drought conditions, particularly in southeastern regions, raising concerns over safrinha corn production.

In North America, the Northern Plains remain dry, increasing early-season drought concerns for spring wheat and corn planting. The Midwest is bracing for a strong storm system that could bring widespread precipitation, including heavy snow in northwestern areas. The Central and Southern Plains received much-needed rainfall, helping to improve winter wheat conditions.

Global supply chain disruptions are further influencing market trends. U.S. barge shipments on the Mississippi River have slowed significantly, with corn shipments down 41% and soybean shipments down 38.2% week-over-week. In Argentina, the country’s oilseed workers' union is threatening to strike, potentially disrupting soymeal and soyoil exports.

The biofuel sector remains a major factor in grain markets. CME Group announced a new soybean oilshare futures contract, set to launch on March 31, reflecting growing demand for biofuels. U.S. ethanol stocks rose 5.2% to 27.57 million barrels, adding to supply concerns. Meanwhile, Brazil is considering reducing import taxes on corn ethanol, a move designed to improve trade relations with the U.S. while stabilizing domestic fuel prices.

Macroeconomic conditions also continue to impact grain markets. The U.S. Dollar Index remains weak, making U.S. grain exports more competitive internationally. However, inflation concerns persist, with the Federal Reserve maintaining a cautious approach on interest rates. Crude oil prices have stabilized at $70 per barrel, affecting biofuel margins and transportation costs.

Export dynamics remain a key focus. U.S. wheat shipments showed slight improvements, but continue to struggle against strong competition from Black Sea and Australian suppliers. Meanwhile, France’s wheat exports have strengthened, though overall global competition continues to weigh on prices. China’s demand for U.S. corn and soybeans has slowed, with Brazil emerging as the dominant supplier for both commodities.

Investor sentiment remains cautious, with managed money funds reducing long positions in wheat, corn, and soybeans. Market participants are closely watching the upcoming USDA WASDE report and Prospective Plantings report, both of which could provide further direction for grain prices in the coming weeks.

The global grain market continues to navigate a highly volatile environment, driven by escalating trade disputes, shifting weather conditions, and ongoing supply chain disruptions. With China imposing new tariffs on U.S. agricultural goods, South American production expanding, and global demand patterns shifting, uncertainty remains high. Traders and analysts will be closely monitoring U.S. trade policies, South American harvest progress, and key government reports as they assess future price movements in the weeks ahead.