Agricultural markets closed the last week of February in the red, with corn, soybeans, and wheat experiencing notable declines amid fund and technical selling pressures. Improved weather in South America has boosted harvest expectations, adding more supply to the global market, while looming U.S. tariffs on key trading partners like Mexico, Canada, and China—set to begin March 4—introduce uncertainty for demand. Prices for May contracts saw corn drop to $4.69½, soybeans to $10.25¾, and wheat varying across exchanges, with CBOT at $5.55¾, reflecting a bearish outlook as the marketing year progresses.
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In this edition:
Harvest Headlines: Events impacting crop prices.
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Market Overview
Harvest Headlines
Corn Prices: Key Events and Insights
Fund Selling and Technical Pressure: Corn prices fell sharply, with May corn closing at $4.69½, down 11½ cents, driven by significant fund selling and technical pressures as speculators shed long positions at month-end. Reports indicate funds were big sellers following the USDA’s 2025/26 outlook, which raised carryout estimates to 1,965 million bushels, pressuring prices further.
USDA 2025/26 Projections: The USDA estimates U.S. 2025 corn acres at 94.0 million, up from 90.6 million last year, with a projected crop of 15,585 million bushels compared to 14,867 million last year. Despite solid export commitments (up 28% year-over-year), the increased supply forecast and a carryout of 1,965 million bushels contributed to the bearish sentiment.
South American Weather Impact: Heavy rains in southern Argentina and north-central Brazil are supporting corn production, while dry conditions in south-central Brazil favor planting but may soon stress soils. These developments suggest a robust South American supply, which could compete with U.S. exports and keep prices under pressure.
Tariff Uncertainty: Proposed U.S. tariffs of 25% on Canada and Mexico and an additional 10% on China, effective March 4, are raising concerns about export demand. Mexico, a top buyer of U.S. corn with 379,000 tons purchased last week, could shift sourcing if tariffs disrupt trade, adding downside risk to prices.
Ethanol Use Steady: USDA estimates corn used for ethanol in 2025/26 at 5,500 million bushels, unchanged from this year, with January estimates at 465.8 million bushels, up 5.6% year-over-year. This steady demand provides some support, but it’s not enough to offset supply-side pressures, keeping prices soft.
Global Supply Competition: South Africa’s 2025 corn crop is projected at 13.9 million metric tons, up 8.3% from 12.85 million last year, despite a smaller planting area. Combined with Argentina’s harvest progress (5.4% complete) and Ukraine’s 14.4 million metric tons exported (down 9% year-over-year), global supply abundance continues to weigh on U.S. corn prices.
Soybean Prices: Key Events and Insights
Decline Amid Fund Selling: May soybeans dropped to $10.25¾, down 11½ cents, pressured by fund and technical selling as prices hit a seven-week low, breaching both 50- and 100-day moving averages. This reflects a broader liquidation trend as the market adjusts to month-end dynamics and bearish fundamentals.
South American Harvest Progress: Improved rainfall in Argentina has boosted soybean conditions to 24% good/excellent (up from 17%), with production steady at 49.6 million metric tons, while Brazil’s harvest nears 50% complete. This influx of South American supply is cutting into exportable volumes, challenging U.S. soybean competitiveness despite a 14% rise in export commitments year-over-year.
Tariff Threats Impacting Demand: Upcoming U.S. tariffs on Mexico (25%), Canada (25%), and China (10% additional) threaten demand from key buyers like China (202,000 tons last week) and Mexico. China’s negative crush margins and potential delays in new buying, alongside geopolitical tensions, further cloud the demand outlook for U.S. soybeans.
Domestic Crush Expectations: The USDA’s upcoming January crush report, due March 3, is expected to show 211 million bushels processed, down from December’s 217.7 million, with oil stocks rising to 1.757 billion pounds. Despite a 7.6% year-over-year increase in bean oil usage (3.516 billion pounds), falling bean oil as a feedstock percentage (33.6%) signals softening biodiesel demand, pressuring prices.
Weather and Production Stress: Dry conditions persist in northern Argentina and southern Brazil, raising late-season crop stress concerns, though normal rains elsewhere in Argentina support development. This mixed weather pattern could limit upside potential unless significant losses emerge, keeping soybean prices vulnerable to downside risks.
Wheat Prices: Key Events and Insights
Broad Declines Across Exchanges: Wheat prices fell across all three U.S. classes, with May CBOT at $5.55¾ (down 6¾ cents), KC at $5.73 (down 12¼ cents), and Minneapolis at $5.97¾ (down 7 cents), reflecting fund and technical selling amid monthly losses nearing 50 cents. The market shrugged off geopolitical noise, focusing instead on supply and demand dynamics.
USDA Acreage and Carryout Outlook: USDA projects 2025 wheat acres at 47.0 million (up from 46.1 million) and a 2025/26 carryout of 826 million bushels (up from 793 million), despite export commitments up 10% year-over-year. This increased supply expectation, paired with a 20% USDA export forecast rise, has yet to halt the bearish price trend.
Global Competition Intensifies: Russia’s wheat export tax dropped 21% to 2,178 roubles per metric ton, while IKAR cut its 2024/25 export forecast to 42.5 million tonnes due to currency fluctuations and farmer pessimism. Ukraine’s exports at 11.9 million metric tons (up 3% year-over-year) and competitive U.S. SRW and HRW pricing struggle against Russia’s dominance, pressuring prices.
Weather Patterns Mixed: Dryness in the U.S. southwestern Plains could stress winter wheat, but expected rains next week in central and eastern areas offer relief; the Black Sea region’s cold snap is unlikely to harm crops, though dryness persists into late March. These conditions maintain a neutral weather impact, with focus shifting to demand and currency strength.
Tariff and Demand Concerns: Impending U.S. tariffs on Mexico (a key wheat buyer) and Canada (a spring wheat supplier) add uncertainty, while a stronger U.S. dollar hampers export competitiveness against cheaper Russian wheat. Slow global demand and a stalled Russia-Ukraine peace deal further dim prospects, keeping wheat prices on a downward trajectory
Extended Commentary
Agricultural markets posted broad losses last week as fund-driven selling, technical pressures, and global supply concerns weighed on prices. May corn settled at $4.69½, soybeans at $10.25¾, and CBOT wheat at $5.55¾, with bearish sentiment fueled by improving South American weather and upcoming U.S. tariffs on Canada, Mexico, and China set to take effect March 4. The USDA’s outlook raised 2025/26 corn carryout estimates to 1,965 million bushels, while South American crops remain competitive, challenging U.S. exports. Meanwhile, soybean prices fell to a seven-week low, pressured by strong harvest progress in Brazil and Argentina, weakening biodiesel demand, and tariff-related uncertainty surrounding Chinese and Mexican purchases.
Wheat markets declined as increasing U.S. acreage projections, a stronger dollar, and aggressive Russian export pricing offset any supply concerns. Russia’s lower wheat export tax and Ukraine’s steady shipments continue to pressure U.S. competitiveness, while dryness in the southwestern Plains could stress winter wheat despite potential relief from upcoming rains. The tariff situation adds another layer of uncertainty, particularly for U.S. wheat exports to Mexico and spring wheat trade with Canada. With strong global supply weighing on prices across corn, soybeans, and wheat, the market remains in a vulnerable position heading into March.
