Geopolitical and Regional Highlights

Ukraine’s grain trade position weakened significantly in April, as exports dropped by 60% year-over-year, totaling just 2.27 million metric tons. This includes a 56% drop in wheat exports and 61% in corn, according to Ukraine’s Agriculture Ministry. These figures underscore how deeply the ongoing war continues to undermine Ukraine’s logistics, storage, and export capabilities. The reduction of carryover stocks and logistical disruptions are tightening European and global feed grain supply, forcing major buyers to increasingly turn to the EU and South America to meet demand.

Argentina’s market continues to be shaped by currency instability, government policy, and inconsistent weather. The country posted its largest single-day soybean sale of the year on Tuesday (230,000 MT), a promising signal. However, the overall soybean harvest pace remains slow, reaching just 24%, well below last year’s 36% for the same time. This delayed supply poses short-term risks for global crushers and exporters relying on Argentine soy products, especially with early wheat sowing already facing dry soil conditions. Argentina’s importance as a soymeal and vegoil exporter means these disruptions have significant knock-on effects globally.

Russia remains a stabilizing force in global wheat flows—for now. SovEcon increased its 2025–26 wheat export forecast to 39.7 million tons, citing better crop conditions. Yet, the country continues to face climate risks in the south (drought and cold snaps) and policy restrictions, including export quotas and duties that discourage expanded planting. Trade with Turkey has slowed, and competition from EU exporters in markets like Algeria is intensifying. These dynamics indicate that while Russia holds volume capacity, its geopolitical and regulatory environment could quickly shift export behavior.

Romania continued to solidify its lead as the EU’s top grain exporter this season. With over 7.1 million tons shipped by late April and more than 4.7 million tons of wheat delivered to key markets like Egypt and Saudi Arabia, Romania’s Black Sea ports are becoming crucial export hubs. Romania’s logistical efficiency, paired with softer forward wheat prices, makes it a key competitor in the global wheat arena, particularly as Ukrainian supply becomes less predictable.

Bulgaria’s role is evolving amid shifting trade dynamics. The country has lost market share in Indonesia and other traditional destinations due to stronger competition and persistent drought worries. However, Bulgaria is poised for renewed relevance through the upcoming launch of CME’s Black Sea wheat contract, which will be linked to export prices in Constanta (Romania) and Varna/Burgas (Bulgaria). This marks a strategic shift in price discovery for the region, potentially decreasing reliance on Russian benchmarks and increasing regional pricing transparency and risk hedging capacity.

Turkey’s temporary tariff policy also came into sharp focus this week. Authorities implemented a zero-tariff import quota of 1 million tons of corn, valid until July 31, to stabilize feed supply and contain food inflation. Once expired, the import duty will revert to 130%. This policy has implications for global corn trade routes, particularly for exporters like the U.S., Ukraine, and Brazil.

India's shifting vegetable oil import patterns continued to influence global oilseed trade. With palm oil imports dropping 24% in April—the fifth consecutive monthly decline—buyers shifted demand toward soyoil (up 2%). However, as palm oil now trades at a discount again, this preference may reverse in May. These swings affect pricing and allocation decisions in Malaysia, Indonesia, and the Americas.

Canada is preparing for a stronger wheat season, with USDA’s foreign post in Ottawa projecting a 2% production increase and a 2.6% rise in planted area for 2025–26. Early sowing is underway in the southern Prairies, with full-scale planting expected by mid-May. Canada’s performance will be critical to balancing any losses from Black Sea exporters or weather-impacted U.S. production later in the year.

Together, these geopolitical and regional developments are reshaping both the supply reliability and price discovery mechanisms across major grain and oilseed markets. As tensions persist in Eastern Europe and weather risk rises across the Americas and Central Asia, regional shifts are quickly becoming global realities, requiring careful monitoring by exporters, importers, and market analysts alike.

Weather Disruptions and Crop Conditions

The weather narrative was central to price action throughout the week. In the U.S. Central and Southern Plains, heavy rainfall improved moisture conditions but delayed spring wheat and corn planting. This duality—better crop prospects versus slower fieldwork—kept markets indecisive. The western Midwest and northern Plains, by contrast, saw drier conditions conducive to planting, helping offset delays elsewhere.

Persistent flooding along the Mississippi River south of Memphis further stressed grain logistics. Although river barge shipments surged to 670,000 tons (up from 469,000 tons the prior week), high barge rates and waterway disruptions continued to strain delivery efficiency across U.S. corridors.

In Argentina, weather remained favorable for soybean and corn harvests, with dry spells accelerating progress. Yet, some areas are now reportedly too dry for early wheat planting, which could impair 2025/26 crop prospects. Soybean harvest stood at just 24% complete, behind last year’s 36% at the same time, contributing to international supply concerns.

Brazil approached the end of its wet season with sufficient moisture for winter wheat sowing and corn filling. However, dry pockets in southern areas could impact yield potentials. Planting schedules remain on track for now.

Market Performance: Price Developments in U.S. Futures

Wheat (July 25 CBOT) began the week at $5.31 and climbed steadily, closing Friday’s session at $5.41 ¾, reflecting a weekly gain of over 10 cents. The gains were driven by steady export demand, strong sales to South Korea and Nigeria, and persistent weather-induced delays in U.S. HRW and SRW regions that supported speculative positioning.

Corn (July 25 CBOT) started the week around $4.72 ¼, slipping initially on weaker ethanol data, but ended Friday at $4.74 ¾. This slight recovery came despite March corn-for-ethanol use showing a 3.79% drop year-on-year. Still, demand from Mexico and stable export flows helped buffer deeper losses.

Soybeans (July 25 CBOT) posted a solid weekly performance, starting at $10.50 ¼ on Monday and closing Friday at $10.53 ½, gaining nearly 3 ¼ cents. Bullish export data, strong crush numbers, and slow Argentine harvesting supported gains, despite continued weakness in biodiesel-related soybean oil demand.

Black Sea Region Update

Ukraine continues to defy wartime constraints with strong export flows, particularly for corn and oilseeds, despite tightening domestic supplies caused by aggressive early-season sales. Grain prices have surged nearly 1.5 times since the start of the 2024/25 season, supported by a dry summer and strong EU demand. However, planting concerns loom as sunflower sowing trails the five-year average by nearly 30%, raising the risk of supply shortfalls should rainfall remain scarce into May.

Romania has taken the lead in EU grain exports, shipping over 7.1 million tons by late April, including 4.7 million tons of wheat. Strategic Black Sea port access and efficient logistics have enabled Romania to outpace France, Germany, and Poland. Meanwhile, Russia’s wheat outlook remains strong at 39.7 million tons for 2025/26, but challenges such as export duties, high domestic prices, and drought threats persist. The upcoming launch of the CME’s Black Sea wheat futures—based on Romanian and Bulgarian port prices—marks a significant structural shift aimed at improving price transparency and reducing reliance on disrupted Russian benchmarks.

Amid these shifts, Bulgaria’s role has softened slightly, especially in export destinations like Indonesia, though it remains integral to regional corn trade. Ukraine’s expanding oilseed processing capacity and dominance in Turkey’s sunflower oil market add resilience to its trade strategy, even as it faces growing competition in Asia. The region overall enters the new season balancing strong export credentials with acute weather risks and evolving geopolitical realities.

Export Trends and Trade Dynamics

USDA weekly export figures offered a clear bright spot, buoying U.S. futures markets midweek. The net export sales of corn reached 1.26 million metric tons, net export sales of soybeans hit 478k tons, and net export sales of wheat recorded 310k tons, helping ease concerns about domestic stock burdens. Mexico remained a top buyer of U.S. corn, while China accounted for roughly one-third of soybean sales. Nigerian wheat purchases added weight to the wheat complex.

Notably, Mexico may surpass Canada as the top destination for U.S. agricultural exports, according to a CoBank projection. However, a 15% depreciation in the peso and signs of macroeconomic deceleration present potential headwinds for future trade expansion.

Policy and Market Structure Developments

A series of important policy- and trade-related developments also shaped market sentiment:

• The FAO reduced its 2024–25 global grain stockpile forecast to 868.2 million tons, the lowest in three years. Although the stock-to-use ratio is still within safe thresholds, the decline signals tightening global availability amid weakened trade volumes.
• The UN food price index rose 1% in April, reaching its highest level since March 2023. This surge was driven by tariff uncertainty, currency instability, and increasing prices across grain, meat, and dairy sectors—signaling potential inflationary spillovers for end consumers.
• India’s palm oil imports dropped 24% in April, the fifth monthly decline. This shift has driven buyers toward cheaper soyoil alternatives, although recent pricing adjustments may restore palm oil’s competitive advantage. Meanwhile, Malaysia reported a 5.1% monthly rise in palm oil exports, helping ease concerns over global edible oil supplies.

Oilseeds and Biofuel Trends

Despite strong soybean crush data from the USDA—206.6 million bushels crushed in March, up 1.5% year-over-year—concerns lingered in the oilseed complex. Soybean oil sales dropped to just 8,200 metric tons, marking a multi-week low, and U.S. soybean oil use for biofuel fell 33%, reaching its lowest point since early 2021. This reflects the dual impact of weak demand from China and changing biodiesel market structures.

On the export side, soymeal sales surged to 328,219 MT, the highest in 11 weeks. The divergence between soyoil and soymeal signals continued resilience in feed demand but a shifting dynamic in industrial and energy-linked oilseed use.

Strategic Outlook

As the grain markets head into mid-May, traders will continue to monitor rainfall developments in the U.S. Plains and Argentina, logistics conditions along the Mississippi River, and evolving trade sentiment in key markets like Mexico, China, and India. While bullish export flows and tightening stocks provided support this week, lingering questions around biofuel demand, planting pace, and global trade disruptions are likely to keep volatility elevated.

In summary, the week ending May 2 reflected a grain market in transition—one navigating between strength in trade flows and stress in supply chains. With the weather outlook remaining mixed and macroeconomic signals uncertain, risk management and strategic forecasting will be key for stakeholders moving into the next phase of the 2025 crop year.