Key Policy Developments and Trade Shifts

This past week, several key policy and trade developments reshaped expectations for global grain flows and introduced new uncertainties into the outlook. The geopolitical and trade policy landscape was particularly active, reflecting tensions, strategic realignments, and institutional changes that are poised to influence market access and price dynamics through the remainder of 2025.

One of the most closely watched events was the anticipation surrounding the upcoming USDA WASDE report, which has already influenced pre-positioning among traders. This report is expected to revise old crop carryout figures for U.S. corn and wheat, and update acreage and yield estimates that could set the tone for summer pricing. Its significance extends beyond U.S. borders, as global buyers and competitors react to revised U.S. exportable surplus projections.

The 125% retaliatory tariff on U.S. soybean exports to China, imposed during the earlier phase of trade tensions, continues to disrupt traditional supply chains. U.S. sales to China for the 2024/25 marketing year remain negligible. This tariff has prompted Chinese state buyers to pivot more aggressively toward South American suppliers, especially Brazil and, more recently, Argentina. If no breakthrough is reached during the U.S.–China agricultural trade meeting in Geneva this weekend, analysts warn the tariff could persist, stifling U.S. market access through year-end.

In a strategic shift, China signed a non-binding $900 million agreement with Argentina covering soybean, corn, and vegetable oil exports. This comes after Argentina had not shipped soybeans to China in 2024, signaling Beijing’s intention to diversify imports away from the U.S. and reinforce supply resilience through infrastructure investments, including proposed enhancements to Argentine corn-processing capacity.

On the U.S. legislative front, the bipartisan Ag BIO Act was reintroduced and is gaining traction. It aims to support innovation and long-term demand for corn-based bioproducts and renewable energy inputs, including sustainable aviation fuel and bioplastics. The act’s passage could enhance domestic corn demand structurally, adding a layer of resilience to ethanol demand in a policy environment that remains uncertain following the expiration of the Biodiesel Blenders' Tax Credit (BTC) and lack of clarity around the new 45Z carbon intensity credit.

In Europe, France and Romania are lobbying for stricter alignment of Ukrainian grain trade terms with EU standards, as concerns over customs pressures, logistics bottlenecks, and environmental regulations mount. The EU–Ukraine agricultural trade corridor continues to evolve, and potential revisions to tariff-free access or inspection protocols could directly impact volumes flowing through the Black Sea and Danube gateways.

At the logistical level, improved waterway traffic in the U.S. heartland offered positive signs. Mississippi River grain shipments increased to 780,000 tons, up from 670,000 the previous week. A 28.6% jump in corn shipments and a moderate rise in barge rates point to increasing activity and support for U.S. interior grain flows, which may help absorb some of the pressure from lower international sales.

The reopening of fertilizer plants such as Azomureș in Romania and tighter margins on UAN fertilizer in Ukraine also reflect a regional policy push toward agricultural input independence. These shifts are aimed at stabilizing input costs and reducing reliance on Russian-origin products, which remain politically and commercially sensitive.

Finally, Brazil resumed soybean exports to China from five previously suspended exporters following the easing of phytosanitary restrictions. Although port congestion and logistic delays continue to cap short-term volumes, the move reaffirms Brazil’s strategic dominance in Chinese soy sourcing—a dynamic further solidified by the drop in U.S. competitiveness.

These developments collectively highlight a fragmented and evolving trade environment. Structural shifts in trade partnerships, policy uncertainty in renewable fuels, and supply chain recalibrations in response to geopolitical risks are now central forces shaping global grain market outcomes—perhaps more so than crop fundamentals alone.

Weather Trends and Crop Outlook

Weather remained one of the dominant themes impacting grain market sentiment this week. In the United States, planting advanced rapidly under warm and dry conditions. By May 9, soybean and corn sowings had reached 30% and 40% respectively—both ahead of the five-year averages. However, continued dryness across the Corn Belt raised alarms over soil moisture reserves. Should rains fail to return by mid-to-late May, emergence and yield expectations could be compromised.

The U.S. Plains experienced contrasting patterns. Heavy rainfall provided relief to drought-stricken areas in Kansas and Colorado, but also complicated fieldwork and harvest preparations in Oklahoma and the Texas Panhandle. Winter wheat benefited from these conditions, yet analysts noted localized flood damage and lodging concerns that could affect quality at harvest.

In South America, Argentina’s weather played a dual role. Frequent rains slowed soybean harvest, which was only 45% complete by week’s end, but simultaneously improved moisture for winter wheat planting. The Buenos Aires Grain Exchange raised its soybean output forecast to 50 MMT from 48.6 MMT, citing strong yields across the Pampas.

Australia’s outlook turned drier. The Grain Industry Association trimmed its wheat acreage projections for Western Australia to 4.07 million hectares as drought spread eastward. In Canada, conditions remained mixed—southern Prairies were dry, while models forecast rain next week, potentially aiding crop establishment.

In the Black Sea region, spring grain sowing in Ukraine reached 76% of projected area. Meteorologists flagged concerns over the impact of April frost and heatwaves, with low soil moisture in key oblasts threatening early vegetative stages. Moisture recovery is crucial as market participants monitor for any impact on export potential.

Price Movements and Futures Performance

Futures performance varied across the week as traders adjusted positions ahead of the upcoming WASDE report. Chicago wheat (July 25 contract) started the week at $5.31¼ and closed on Friday at the same level it opened—$5.29¼—after dropping midweek due to weak U.S. export demand and tepid global interest. Technical pressure and better weather in the U.S. Plains kept rallies in check, though new crop sales provided some optimism.

Corn (July 25 contract) opened at $4.54¼ and ended the week at $4.47½. Despite midweek recovery driven by export sales and private bookings to Mexico and unknown destinations, the market was weighed down by falling ethanol production and persistently weak stock drawdowns. While old crop sales reached a 19-week high, traders remained cautious ahead of the WASDE, which is expected to slightly reduce carryout.

Soybeans (July 25 contract) showed the strongest performance, rising from a weekly low of $10.39¼ on Wednesday to a close of $10.45 on Thursday and opening Friday at the same level. Strong demand from Mexico and Pakistan, alongside speculative support driven by soyoil’s rally, helped offset bearish signals from China, where April imports fell to a decade low of 6.08 MMT. Analysts anticipate a rebound in May and June but caution that ongoing port delays and logistical bottlenecks may persist.

Export Trends and Logistical Dynamics

Export trends were mixed this week. The net export sales of U.S. corn surged to 1.662 MMT, a 19-week high, with Japan, Taiwan, and Spain as key destinations. The net export sales of soybeans totaled 376,653 MT, led by Mexico and Pakistan. The net export sales of wheat struggled, with old crop sales of just 69,659 MT, although new crop bookings reached a seasonal peak of 493,000 MT. Taiwan’s purchase of 99,200 MT U.S. wheat also added a minor bullish note.

Inland logistics saw a positive trend, with Mississippi River grain shipments rising to 780,000 tons for the week ending May 3. Corn shipments surged 28.6% week-on-week, while soybeans declined 14.3%. Barge rates increased, indicating stronger logistical activity as the market heads into peak demand season.

In Canada, wheat stocks fell to 15.42 MMT, down 1.2% from last year, while canola inventories plunged 39% to 5.87 MMT. Rapeseed and wheat outlooks remain cautiously optimistic, supported by improved export conditions and potential rainfall in the Prairies next week.

Vegetable Oils and Oilseeds Market

Oilseed markets remained highly sensitive to global crush dynamics and China’s volatile demand. Soybean meal prices in China remained under pressure due to sluggish crushing and high port backlogs. Several crushers in the northeast suspended operations, contributing to near-term tightness in soymeal availability.

Soyoil futures rallied midweek, helping stabilize the broader soy complex, especially amid weak April crush data in China. Malaysian palm oil gained nearly 2% by Thursday, reaching 3,801 ringgit, buoyed by improved sentiment despite high inventories and lukewarm export flows.

Brazil’s oilseed export calendar was adjusted downward as logistical delays impacted May shipments. ANEC projected May soybean exports at 12.6 MMT, down from April’s record pace of 15.3 MMT. China resumed purchases from five Brazilian exporters previously suspended, helping stabilize market expectations.

The week of May 5–9 marked a complex yet pivotal moment for the global grain market. With export data diverging across crops, weather conditions remaining a wildcard, and major trade policy decisions looming, traders approached the end of the week cautiously. The upcoming USDA WASDE report will likely provide clearer direction for both old and new crop balance sheets.

From the Midwest to the Pampas, and from the Black Sea to the Yangtze, the interplay of local agronomic conditions and global strategic alignments is set to intensify. As markets transition toward summer, fundamentals—not just forecasts—will dictate the next leg in grain and oilseed pricing.