Wheat futures strengthened on Wednesday, with the May 2025 CBOT wheat contract closing at $5.48 ¼ per bushel, up 11 ½ cents. Prices were supported by strength across all three U.S. wheat exchanges, with Chicago SRW futures leading the gains. Kansas City HRW futures rose between 6 to 9 cents, while Minneapolis spring wheat also posted gains. The market found support from improved global demand expectations and short covering by speculative traders. Meanwhile, President Trump announced a one-month delay in the planned tariffs on Mexico and Canada, reducing immediate concerns about retaliatory trade measures. Weather conditions in U.S. wheat-growing regions turned drier, particularly in Kansas, Oklahoma, and southern Texas, after a wetter start to the week, offering mixed prospects for crop development.

Corn futures also finished the day higher, with the May 2025 contract closing at $4.55 ¾ per bushel, up 4 ¼ cents. The corn market benefited from gains in the ethanol sector, with the latest EIA report showing a rise in ethanol production to 1.093 million barrels per day, up 12,000 barrels per day from the previous week. Ethanol stocks saw a drawdown of 282,000 barrels to 27.289 million barrels, indicating stronger demand. Additionally, U.S. export demand remains a key focus, with analysts expecting weekly corn export sales between 0.7 and 1 million metric tons in the latest USDA report. The delay in U.S. tariffs on North American trade partners also provided some stability, as Mexico remains a key importer of U.S. corn.

Soybean futures saw a recovery, with the May 2025 contract settling at $10.11 ¾ per bushel, up 12 ¾ cents. The front-month contracts led the gains, with national average cash soybean prices rising by 13 cents to $9.46. Soymeal futures also moved higher by $4.50 to $7.10 per ton, while soy oil futures gained 13 to 17 points. Export sales expectations for soybeans ranged between 300,000 and 550,000 metric tons for the previous week, while traders also anticipated 150,000-420,000 metric tons of soymeal sales. Meanwhile, Brazil’s soybean production outlook was trimmed by 2.4 million metric tons to 171.6 million metric tons, reflecting the impact of recent adverse weather conditions.

Key Market Developments and Global Trade Trends

The global grain market remains highly sensitive to trade policy shifts, with China’s recent imposition of 10%-15% tariffs on U.S. agricultural goods adding another layer of uncertainty. Despite diplomatic calls for dialogue, China has halted imports from three major U.S. soybean exporters—CHS Inc, Louis Dreyfus Company, and EGT LLC—citing quality concerns. This move intensifies pressure on the U.S. soybean market, as Brazil’s soybean harvest is now 50% complete, boosting competition in global markets.

In the wheat sector, Russia’s wheat exports have slowed, hitting a five-year seasonal low in February at 1.9 million metric tons. Export projections for March range between 1.5 million and 1.7 million metric tons, as logistical constraints and negative export margins limit shipments. However, Black Sea wheat supply remains robust overall, continuing to challenge U.S. wheat competitiveness. Similarly, Ukraine’s grain exports have slightly declined year-over-year, but trade flows remain steady.

Weather conditions continue to impact global supply prospects. In South America, Argentina is experiencing heavy rainfall, which could delay corn and soybean harvesting in key production areas. Conversely, Brazil continues to battle severe drought conditions in southeastern regions, raising concerns over second-crop safrinha corn production. Forecasters suggest that dry conditions could persist into mid-March, exacerbating supply risks.

In North America, the Northern Plains remain dry, raising early-season drought concerns for spring wheat and corn planting. Meanwhile, the Midwest is preparing for a major storm system, expected to bring widespread precipitation and heavy snow in northwestern regions. The Central and Southern Plains received beneficial rainfall, offering some relief to winter wheat crops, though moisture conditions remain closely monitored.

Global supply chain disruptions continue to add volatility to grain markets. 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 South America, Argentina’s oilseed workers' union is threatening to strike, potentially disrupting soymeal and soyoil exports, while logistical bottlenecks in China are delaying grain imports.

The biofuel sector remains a key driver of grain demand. U.S. ethanol stocks increased by 5.2% to 27.57 million barrels, raising concerns about oversupply. The Biden administration is reviewing biofuel mandates, which could impact corn-based ethanol demand and soybean oil usage for biodiesel production. Meanwhile, Brazil is considering lowering import taxes on corn ethanol, a move aimed at improving trade relations with the U.S. and addressing domestic fuel price concerns.

Macroeconomic factors are also shaping grain markets. The U.S. Dollar Index remains weak, enhancing American grain export competitiveness. However, persistent inflation concerns and high interest rates set by the Federal Reserve continue to influence market sentiment. Crude oil prices have stabilized around $70 per barrel, affecting biofuel margins and transportation costs for agricultural goods.

Export trends highlight continued challenges for U.S. agricultural trade. While U.S. wheat shipments have shown minor improvements, they still struggle against competition from Black Sea and Australian supplies. France’s wheat exports have slightly strengthened, but global price pressures remain high. Meanwhile, China’s demand for U.S. corn and soybeans has slowed, with Brazil emerging as the dominant supplier for both crops, further pressuring U.S. export prospects.

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

The global grain market remains volatile amid shifting trade policies, weather-related supply risks, and logistical challenges. While a delay in U.S. tariffs on Mexico and Canada provided temporary relief, China’s aggressive trade measures against U.S. agriculture continue to disrupt markets. With South American crop production ramping up, and demand uncertainties persisting, volatility is expected to remain high. Traders will closely monitor developments in U.S. trade policies, South American harvest progress, and key government reports as they assess the future direction of the market.