Wheat futures extended losses on Thursday following bearish export sales data and pressure from a strong U.S. dollar. The May 25 CBOT Wheat contract closed at $5.57 ¼ per bushel, down 6 ¼ cents. Kansas City HRW futures also weakened, falling 7 to 9 cents, while Minneapolis Spring Wheat dipped 7 cents in front-month contracts. USDA's export sales report delivered a negative surprise, revealing net reductions of 248,849 metric tons, a marketing year low. Cancellations by Panama and unknown destinations outweighed new purchases, though new crop bookings were stronger than expected at 491,092 metric tons. Meanwhile, the International Grains Council (IGC) raised its 2024/25 global wheat production forecast to 799 million tons, but projected tighter stocks for the 2025/26 season due to increased consumption.

Corn futures closed higher across front-month contracts on Thursday, supported by robust export demand and bullish ethanol production data. The May 25 CBOT Corn contract ended the day at $4.69 per bushel, up 7 cents. USDA's report showed 1.497 million metric tons in old crop sales, at the high end of expectations, with Japan, South Korea, and Mexico being the top buyers. The International Grains Council raised its 2024/25 world corn production outlook by 1 million tons, while trimming ending stocks by the same amount. The first projection for 2025/26 sees a substantial 52 million ton increase in global output. In Argentina, corn harvest is 14% completed, with improved weather allowing progress.

Soybeans regained some ground Thursday after recent losses. The May 25 CBOT Soybean contract closed at $10.13 per bushel, up 4 ¾ cents. Soybean meal futures fell between $0.60 and $1.60/ton, while soy oil gained 35 to 39 points. USDA’s weekly export sales report showed 352,580 metric tons in old crop soybean sales—below expectations and a 5-week low. China remained the largest buyer, though the figure was weighed down by cancellations. New crop sales were negligible. The Buenos Aires Grain Exchange revised Argentina’s soybean crop down to 48.6 million tons, citing earlier excessive rainfall, though crop quality ratings improved. IGC kept its 2024/25 global soybean ending stocks steady at 82 million tons, with a projected increase to 83 million tons next year.

Key Global Market Developments Impacting Grain Prices

Uncertainty surrounding global trade policy continues to loom large. The Trump administration is considering new restrictions on Chinese imports, including agricultural products, while Trump's proposed tariffs on China-built ships threaten to escalate costs for U.S. grain exporters. Industry groups warn this could disrupt ocean freight access and add up to $930 million annually in shipping costs, affecting U.S. competitiveness.

Brazil's agricultural sector is under financial strain. So far, 45 agricultural input firms have filed for bankruptcy in 2024, an 80% increase from the previous year. Agrogalaxy alone reported $1.58 billion in debt, as the combination of lower grain prices and rising costs cripples the industry.

Weather remains a major source of volatility. Torrential rains in Argentina’s Pampas have started to ease, allowing soybean and corn harvests to resume. Argentina’s corn production was slightly revised up to 48 million tons, while soybean output was trimmed to 48.6 million tons. Meanwhile, cooler U.S. Midwest weather is being monitored for its impact on winter wheat, though conditions have remained favorable so far.

China’s corn imports have slowed dramatically, reaching their lowest level in seven seasons. Only 1.07 million tons have been imported so far this marketing year, well below expectations, due to weak demand and retaliatory tariffs on U.S. corn. Meanwhile, China's soybean imports from the U.S. surged 84.1% in January-February compared to last year, filling a supply gap caused by delayed planting in Brazil. However, retaliatory duties and geopolitical tensions may pivot demand back toward Brazilian supplies.

The USDA's latest attaché report forecasts 106 million tons of soybean imports by China in the 2025/26 marketing year, a 2% year-over-year increase, while projecting slower demand growth as Chinese consumers shift to more efficient protein sources like poultry and fish.

The ethanol sector provided a lift to corn markets this week. U.S. ethanol production increased to 1.105 million barrels per day, while stockpiles dropped by 2.9%, indicating solid demand. This comes despite concerns about the broader energy export outlook due to port fee disputes.

Indonesia's government has injected $487 million into Agrinas Palma Nusantara to manage confiscated palm oil plantations. This may shake up the global palm oil market, especially for Malaysia, which has already set its April crude palm oil export tax at 10%. Malaysian palm oil prices rose overnight, signaling firm global demand.

The USDA is reinstating several reports suspended last year due to budget cuts, including the July cattle inventory and county crop estimates for corn, soybeans, and more. This move is expected to improve transparency and market predictability.

Lastly, Louis Dreyfus Company confirmed it will proceed with oilseed expansion plans in North America despite ongoing trade tensions. The global merchant expects U.S. vegetable oil deficits to maintain strong import demand and emphasized its broad geographic footprint as a buffer against future disruptions.