Wheat futures opened Thursday’s session with the May 2025 CBOT contract at $5.48 ¼ per bushel, reflecting modest overnight gains. The wheat market has been under pressure from strong export competition, particularly from Russia and Ukraine, as well as uncertainty surrounding U.S. trade policy. South Korea’s purchase of 98,200 metric tons of wheat from the U.S. and Canada provided some support, but global wheat supplies remain abundant, limiting upside potential. Weather patterns in key wheat-producing regions, including the U.S. Plains, are being closely monitored for potential cold risks later in March.
Corn futures started the day with the May 2025 contract at $4.55 ¾ per bushel, showing slight overnight losses. The market has been reacting to continued concerns over U.S. export competitiveness, particularly as China maintains its tariffs on American corn. President Trump’s decision to delay some of the tariffs on Mexico and Canada for a month provided temporary relief, but trade uncertainty remains a major market driver. Meanwhile, ethanol production showed slight improvement, with weekly output rising by 12,000 barrels per day to 1.093 million barrels per day. However, U.S. ethanol stocks declined by 1% to 27.289 million barrels, reflecting shifting biofuel demand trends.
Soybean futures opened at $10.11 ¾ per bushel for the May 2025 contract, extending recent gains. The market received support from adjustments to Brazil’s soybean production estimates, with Celeres lowering its forecast by 2.4 million metric tons to 171.6 million metric tons due to hot and dry conditions in key states. However, China’s shifting import preferences, favoring South American soybeans over U.S. supplies, continued to weigh on sentiment. U.S. soybean export sales were expected to range between 300,000 and 550,000 metric tons in the latest USDA report, providing some insight into demand trends.
Key Market Developments and Global Trade Trends
The ongoing U.S.-China trade dispute continues to shape global grain markets. President Trump is considering exempting certain agricultural products from tariffs imposed on Mexico and Canada, signaling potential relief for some sectors. However, China’s retaliatory tariffs on U.S. wheat, corn, and soybeans remain in place, keeping American grain at a competitive disadvantage in global markets.
Russia’s wheat export forecast has been revised down by 1.5 million metric tons to 40.5 million metric tons for the current season, reflecting lower-than-expected shipments. February wheat exports from Russia totaled just 1.95 million metric tons, the lowest level for the month in five years. Analysts suggest that the decline in Russian wheat exports could tighten global supply in the coming months, particularly as the European Union faces reduced export capacity.
Weather remains a crucial factor affecting global grain production. Argentina’s soybean production has been slightly reduced to 49.5 million metric tons, with recent heavy rains in key regions causing localized flooding. Meanwhile, Brazil continues to experience prolonged dry conditions, raising concerns about second-crop safrinha corn production. Weather forecasts indicate that the dry pattern in Brazil could persist into mid-March, adding further stress to developing crops.
North American weather patterns also remain mixed. The U.S. Northern Plains are expected to remain warm and dry, increasing concerns about early-season drought conditions. The Midwest is preparing for a major storm system that could bring widespread precipitation, including heavy snow in some areas. The Central and Southern Plains received beneficial rainfall, which should help support winter wheat development.
Supply chain disruptions continue to challenge global grain trade. U.S. barge shipments along the Mississippi River have slowed, with corn shipments down 41% and soybean shipments down 38.2% week-over-week. Additionally, Argentina’s oilseed workers' union is threatening to strike, which could disrupt soymeal and soyoil exports, further complicating global supply chains.
The ethanol and biofuel sector remains a key driver in grain markets. U.S. ethanol production increased slightly, but stocks declined as demand remained steady. Brazil is considering lowering import taxes on corn ethanol, a move designed to improve trade relations with the U.S. while addressing domestic fuel price concerns. The Biden administration is also reviewing biofuel mandates, which could impact demand for corn-based ethanol and soybean oil for biodiesel production.
Macroeconomic conditions are adding further complexity to global grain markets. The U.S. Dollar Index remains weak, making American grain exports more competitive internationally. However, inflation concerns persist, with the Federal Reserve signaling that interest rates may remain elevated in the near term. Crude oil prices stabilized around $70 per barrel, impacting biofuel margins and transportation costs for agricultural commodities.
Export dynamics remain a focal point for traders. U.S. wheat shipments have improved slightly, but Black Sea and Australian supplies continue to limit American export potential. Meanwhile, French wheat exports have strengthened, but global competition remains intense. China’s demand for U.S. corn and soybeans has slowed, with Brazil emerging as the dominant supplier for both commodities.
Investor sentiment in grain markets remains cautious, with managed money funds continuing to reduce 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 remains highly volatile, with trade policy uncertainty, adverse weather conditions, and logistical disruptions contributing to ongoing price fluctuations. As China maintains tariffs on U.S. agricultural products, South American production faces weather challenges, and global demand patterns shift, traders are bracing for continued market turbulence. In the weeks ahead, market attention will focus on U.S. trade decisions, South American harvest updates, and key USDA reports, which are expected to influence price movements significantly.