Wheat futures ended Tuesday’s session lower, reversing some of Monday’s gains. The May 25 CBOT Wheat contract closed at $5.65 per bushel, down 3 ½ cents. Kansas City Hard Red Winter (HRW) wheat remained resilient, posting fractional to 2-cent gains, while Minneapolis Spring Wheat (HRS) ended steady to a penny lower in front-month contracts. The wheat market remains sensitive to U.S. crop conditions, with the latest USDA data showing that Kansas winter wheat was rated 48% good-to-excellent, down 2% from last week, while Texas and Oklahoma held steady at 28% and 46%, respectively. Meanwhile, Japan announced a tender for 122,456 metric tons (MT) of wheat from the U.S., Canada, and Australia, with 70,676 MT specifically from the U.S. European Union wheat exports reached 14.92 million MT as of March 16, still lagging behind last year’s 22.92 million MT for the same period.

Corn futures faced mixed movement on Tuesday, with near-term contracts slipping 2 to 3 cents, while new crop December futures managed a slight ¼ cent gain. The May 25 CBOT Corn contract settled at $4.58 ¾ per bushel, down 2 ¼ cents. The market is reacting to expectations for increased U.S. corn acreage, with S&P Global forecasting 94.3 million acres planted this spring, an increase of 800,000 acres from previous estimates. Meanwhile, U.S. ethanol production remains under scrutiny as traders await the latest petroleum status report from the EIA, with concerns over a potential production decline following last week’s drop in output.

Soybean futures posted losses on Tuesday, with contracts declining by 2 to 3 cents. The May 25 CBOT Soybean contract closed at $10.12 ¾ per bushel, down 2 ¾ cents. Soymeal futures exerted additional pressure, falling between $1.70 and $4.40 per ton, while soy oil futures attempted to lift the complex, gaining 38 to 46 points. The latest soybean-to-corn ratio stands at 2.24, indicating a continued shift toward corn acreage in the upcoming U.S. planting season. Meanwhile, Brazilian soybean exports for March are estimated to reach 15.56 million MT, according to ANEC, a slight increase from prior estimates. European soybean imports have totaled 9.6 million MT in the marketing year, up from 8.98 million MT last year, highlighting sustained demand for South American soybeans.

Key Global Market Developments Impacting Grain Prices

Trade tensions between the U.S., China, and the European Union continue to dominate the global grain outlook. President Donald Trump reiterated plans to impose sector-wide tariffs on April 2, which will include levies on agricultural goods, steel, aluminum, and automobiles. In response, China has already halted soybean imports from three major U.S. agricultural entities, shifting its reliance toward Brazilian soybeans. This has led to a 70% surge in Brazilian soybean export premiums as Chinese crushers scramble for supplies.

The European Union has also escalated trade measures, announcing plans to impose tariffs on $28.2 billion worth of U.S. goods, including soybeans, corn, and beef. European feed industry leaders have raised concerns over the potential disruption to livestock feed supply chains, as increased costs may lead to higher demand for alternative protein sources such as rapeseed meal and sunflower seed meal.

China’s corn import strategy continues to favor Brazilian supplies, with shipments surging 84% year-over-year. Analysts fear this shift could have lasting consequences for U.S. corn exporters, particularly as the Biden administration considers additional trade restrictions on Chinese technology. Meanwhile, logistical disruptions in Ukraine persist as Russian attacks on agricultural infrastructure raise concerns over Black Sea grain exports.

Dry weather in southwestern Russia remains a critical issue for wheat traders. While recent precipitation provided some relief, it is unlikely to offset prolonged drought conditions. In the U.S., Kansas wheat crop ratings declined, reflecting ongoing moisture deficits, while Texas and Oklahoma’s ratings remained unchanged. The Southern Plains have been hit by strong winds and wildfires, further stressing soil moisture levels.

In South America, Brazil’s soybean harvest has reached 70% completion, ahead of last year’s pace. However, Brazilian soybean exports have declined 30.4% year-over-year due to logistical constraints. Concerns remain over whether Brazil will achieve the latest production estimate of 167.37 million MT, as excessive moisture in some regions continues to impact harvest quality.

The latest U.S. soybean crush report from the National Oilseed Processors Association (NOPA) revealed a significant decline, with February crush volumes dropping 11.13% from January to 177.87 million bushels. This was well below market expectations and represented the lowest volume in five months. Soybean oil stocks, however, rose by 8.8% from January, reaching 1.503 billion pounds.

Brazil’s corn stocks remain at historically low levels, with beginning inventories for the 2024/25 season at just 2.04 million metric tons, down from 7.2 million tons in the previous season. The tight supply situation has pushed domestic corn prices close to BRL 90 per 60-kilo bag, a level last seen in April 2022.

Palm oil markets saw notable movement, as Indonesia’s February palm oil exports surged by 62.2%, reaching a four-month high after Jakarta cut export taxes to outcompete Malaysian suppliers. However, the Malaysian palm oil market suffered a setback, reaching a four-year low as China and India shifted toward cheaper Indonesian supplies.

Fertilizer markets are experiencing increased volatility, with potash prices at New Orleans (NOLA) rising to $310-$315 per short ton, while Corn Belt prices climbed to $345-$360. Demand for fertilizers remains strong as spring planting preparations accelerate in key growing regions.

Market Outlook for Today’s Trading Session

With global trade tensions escalating and weather conditions remaining uncertain, the grain markets are expected to experience heightened volatility during today’s session. Traders will be closely monitoring U.S.-China trade negotiations, EU tariff decisions, and South American crop developments. The upcoming USDA export sales report and updated production estimates will be key in shaping short-term price movements. Given the geopolitical risks and shifting trade dynamics, traders should expect continued price swings across wheat, corn, and soybean markets in the sessions ahead.