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Grain markets showed mixed performance this week, with corn and wheat posting gains, while soybeans struggled to hold ground. Corn prices were supported by strong demand and technical buying, reaching nine-month highs. Wheat surged on weather concerns and a weaker U.S. dollar, with winterkill fears in the U.S. and Black Sea regions adding upward pressure. Soybeans saw moderate gains but closed lower for the week, weighed down by Brazil’s record harvest and competitive pricing.
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In this edition:
Harvest Headlines: Events impacting crop prices.
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Market Overview
Harvest Headlines
Corn Market Highlights:
Strong Demand and Technical Buying: Corn prices rallied to nine-month highs, with March futures nearing $5.00. Strong demand, particularly from export sales, and technical buying fueled the rally. The USDA announced a sale of 100,000 metric tons of corn to Colombia, highlighting robust international demand.
Brazilian Planting Progress: Dry weather in central Brazil is expected to accelerate safrinha corn planting, which is behind schedule. However, heavy rains in southern Brazil could delay fieldwork, adding some uncertainty to the planting window.
Argentine Crop Stress: Argentina’s corn conditions worsened, with only 16% rated good/excellent and 33% poor/very poor. The Buenos Aires Grain Exchange held its production forecast at 49 MMT, but concerns over heat and insufficient rains persist.
Ethanol Policy Support: A bipartisan bill was reintroduced in the U.S. Senate to allow year-round E15 sales nationwide. This could boost ethanol demand and provide additional support for corn prices.
Reciprocal Tariffs: The White House announced reciprocal tariffs on key trading partners, including Brazil, which could impact ethanol trade. However, these tariffs are not expected to take effect until April, leaving room for negotiations.
Soybeans Market Highlights:
Brazil’s Record Harvest: Brazil’s soybean harvest is in full swing, with record production estimates weighing on U.S. prices. Brazil’s beans are priced competitively, limiting U.S. export opportunities.
Argentine Crop Concerns: Argentina’s soybean conditions declined, with 36% of the crop rated poor/very poor due to heat stress. The Buenos Aires Grain Exchange maintained its production forecast at 49.6 MMT, but further cuts are possible if dry conditions persist.
NOPA Crush Report: The National Oilseed Processors Association (NOPA) is expected to report a January crush of 204.5 million bushels, down from December’s record but still up 10% year-over-year. Soybean oil stocks are projected to rise slightly but remain below last year’s levels.
China’s Potential Purchases: There is speculation that China may buy soybeans from Argentina, which could shift global trade flows and impact U.S. export demand.
Reciprocal Tariffs: The White House’s reciprocal tariff plan, targeting countries like Brazil, could disrupt soybean trade. However, implementation is delayed until April, allowing time for negotiations.
Wheat Market Highlights:
Winterkill Concerns: Wheat prices surged on fears of winterkill in the U.S. Plains and Midwest, with temperatures expected to plunge well below zero. Snow cover is melting, leaving crops vulnerable to damage.
Black Sea Weather Risks: Cold weather in the Black Sea region, particularly in Russia and Ukraine, added to global supply concerns. Russia’s grain export cap, effective February 15, also contributed to market volatility.
French Crop Conditions: France reported 73% of its soft wheat crop in good/excellent condition, up from 68% last year. This contrasts with concerns in other regions, providing some stability to European markets.
Saudi Tender: Saudi Arabia’s wheat tender, with results expected Monday, added to market activity. The tender highlights strong international demand for milling wheat.
Technical Buying and Weaker Dollar: Wheat prices were supported by technical buying and a weaker U.S. dollar, which made U.S. exports more competitive. Chicago SRW wheat futures traded above $6.00 for the first time in four months.
Extended Commentary
Wheat futures surged as winterkill concerns in the U.S. Plains and Black Sea regions fueled supply uncertainty. With temperatures dropping below zero and minimal snow cover, traders anticipated potential crop damage. Russia’s newly implemented grain export cap added to global volatility, while strong international demand, including Saudi Arabia’s wheat tender, provided further support. A weaker U.S. dollar also bolstered U.S. wheat export competitiveness, helping Chicago SRW wheat futures surpass $6.00 for the first time in four months. Meanwhile, French wheat conditions remained strong, contrasting with weather-driven risks elsewhere.
Corn prices reached nine-month highs, driven by strong export demand and technical buying. The USDA reported significant sales to Colombia, while ethanol policy developments and reciprocal tariff concerns added to market dynamics. Brazil’s safrinha corn planting gained pace despite regional delays, while Argentina’s worsening crop conditions raised further supply concerns. Soybeans faced pressure from Brazil’s record harvest, limiting U.S. export prospects. However, Argentine crop stress and potential Chinese purchases from Argentina created uncertainty. With U.S. reciprocal tariffs looming, market participants remain cautious about the potential trade disruptions ahead.
