After a turbulent start to the week, global grain markets react to mounting geopolitical tensions, shifting trade routes, and volatile weather patterns across major producing regions.

Wheat

Chicago September 2025 wheat futures closed Monday at $5.41 1/2 per bushel, down 3 1/2 cents on the day. Kansas City HRW contracts also saw slight declines, while Minneapolis spring wheat dropped more sharply by 10–11 cents. The U.S. Winter Wheat harvest reached 63%, slightly behind the five-year average, while Spring Wheat conditions improved with 78% heading and a 4-point rise in the Brugler500 index. Export inspections, however, painted a bearish picture—weekly wheat exports dropped 15.8% from the previous week and nearly 30% below the same week in 2024. Adding further pressure, President Trump announced a 30% tariff on EU and Mexico wheat imports starting August 1, and threatened secondary tariffs on Russian trade partners, escalating market tensions.

Corn

Corn futures on Monday closed at $4.00 per bushel, gaining 4 cents despite a weak overnight opening. USDA data showed 34% of the corn crop is silking, with 7% entering the dough stage, and condition ratings remained strong at 74% good-to-excellent. Export inspections came in at 1.287 MMT, down from the prior week but up year-over-year. While Mexico, Japan, and Brazil remained top destinations, rainfall forecasts of 1–3 inches across the Corn Belt are expected to support crop health. In Brazil, harvest progress remains sluggish—only 40% of the second corn crop has been harvested versus 74% at this time last year. Domestically, corn also felt the effects of broader trade fears amid U.S. tariff threats and market uncertainty.

Soybeans

Soybeans slipped slightly on Monday, with August 2025 contracts closing at $10.01 per bushel, down 3 1/4 cents. USDA reported that 47% of the U.S. soybean crop is blooming, with condition ratings improving to 70% good-to-excellent. However, exports fell sharply—weekly inspections dropped 63.2% from the previous week. Meanwhile, China imported a record 12.26 MMT of soybeans in June, primarily from Brazil, further widening the gap between Chinese and U.S. soybean trade. Strong U.S. demand for soybean oil—especially for biofuels—was also in focus, with the USDA projecting over half of all U.S. soyoil production will go to domestic biofuel use next season. This shift is likely to reduce exports and tighten the domestic oil market.

Key Global Market Influences

Global grain markets are adjusting to a cascade of policy shifts, logistical pressures, and supply-demand imbalances:

China’s record soybean imports in June, totaling 12.26 million metric tons, were primarily sourced from Brazil and came amid ongoing China–U.S. trade tensions. Shipments from the U.S. were just 724,000 tons. Traders expect July and August arrivals to remain strong.

In Brazil, soybean acreage is projected to grow by 1.2% in the 2025/26 season, reaching a record 179.88 million metric tons in production, according to Safras & Mercado. However, their second corn crop harvest lags well behind last year, creating internal pricing pressure.

The U.S. biofuels sector is poised to consume more than half of all domestic soyoil production next year due to higher federal mandates and state incentives. The USDA raised its biofuel use forecast to 15.5 billion pounds, up 26.5% from the current year.

India’s palm oil imports surged 60% month-over-month in June, reaching an 11-month high of 955,683 tons due to price discounts. Meanwhile, soyoil and sunflower oil imports fluctuated, and the government continues to adjust tax policy to stabilize domestic food costs.

Ukraine’s grain exports plunged 76% year-over-year as the new season begins, severely impacting wheat and corn volumes. The sharp drop in Ukrainian supply is tied to infrastructure bottlenecks and geopolitical instability in the Black Sea region.

Russia announced it will not renew the grain export memorandum with the United Nations, eliminating a key corridor for global shipments of wheat and fertilizers. This decision, combined with Trump's latest tariff threats, is fueling significant market anxiety.

In Argentina, soybean meal prices have dropped to their lowest in 15 years due to oversupply and the surging production of vegetable oils for biofuels. While demand remains steady, the glut has weakened both domestic and international meal prices.

Europe’s grain output is expected to rise by 6.9% this season, according to Copa-Cogeca, as weather improves in eastern areas. However, Western Europe remains under stress due to heat and dryness, especially affecting wheat and corn during critical development stages.