Grain and oilseed markets closed lower on March 4, 2025, driven by escalating tariff concerns and retaliatory measures from key trading partners like China, Canada, and Mexico. Corn, soybeans, and wheat futures all faced downward pressure, with soybeans dipping just shy of $10 and wheat hitting new lows amid a bearish global supply outlook. Livestock markets showed mixed results, with cattle posting gains while hogs declined, reflecting varied responses to the broader economic and trade uncertainties.
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In this edition:
Harvest Headlines: Events impacting crop prices.
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Market Overview
Harvest Headlines
Corn Prices Events
Tariff Tensions Weigh on Prices: New U.S. tariffs against Canada, Mexico, and China, coupled with retaliatory measures, have rattled corn markets, pushing May futures down 4¾ cents to $4.51½ per bushel. Mexico, the top buyer of U.S. corn, faces potential disruptions, while China's limited purchases this year add psychological pressure despite not being a major current market.
Improved South American Weather: Better weather in Argentina and Brazil has eased supply concerns, contributing to a 65-cent drop in CK futures since mid-February. Brazil’s Safrinha corn crop planting progresses smoothly, reducing the risk premium that had supported prices earlier.
Strong U.S. Export Sales: USDA announced a sale of 114,000 metric tons of U.S. corn to Mexico, signaling sustained demand despite tariff threats. U.S. corn exports are up 32% year-over-year, providing some counterbalance to the bearish tariff narrative.
Farmer Selling Pressure: U.S. farmers have sold an estimated 80-85% of their 2024 corn crop, limiting new supply pressure for now. However, minimal forward sales for 2025 suggest cautious optimism or awaiting better price signals amid current volatility.
Technical and Fund Activity: Corn futures are testing key support near $4.50, with spreads widening as funds engage in net selling of 21,000 contracts. The market’s oversold condition could trigger a short-covering rally if bullish catalysts emerge, though tariff fears dominate sentiment for now.
Soybean Prices Events
China’s Retaliatory Tariffs: China’s suspension of soybean imports from three U.S. firms (CHS Inc., Louis Dreyfus, EGT LLC) and a 10% tariff on U.S. soybeans have hammered prices, with May futures dropping 12½ cents to $9.99. This move, in response to doubled U.S. tariffs on Chinese goods to 20%, exacerbates an already bearish outlook as China shifts to South American supplies.
South American Harvest Progress: Brazil’s soybean harvest reaching the halfway mark and Argentina’s wet conditions supporting crops have increased global supply expectations, pressuring SK futures near $10.01. StoneX raised its Brazilian crop estimate, adding to the oversupply narrative.
Weak Soyoil Demand: Soyoil futures fell to 42.27 cents, down 63 points, amid concerns that the Trump administration’s tariff stance may dampen biofuel support. This weakens the protein complex, with U.S. crush rates potentially outpacing demand forecasts.
U.S. Farmer Sales: Similar to corn, U.S. farmers have sold 80-85% of their 2024 soybean crop, reducing immediate selling pressure. Yet, with little 2025 crop sold, producers are holding off, possibly anticipating a rebound or further clarity on trade impacts.
Export Sales Bright Spot: USDA reported a 20,000-metric-ton soyoil sale to unknown destinations, offering a minor lift to sentiment. Despite this, soybean exports to China, valued at $12.8 billion in 2024, face significant risks from ongoing trade disputes.
Wheat Prices Events
Tariff Anxiety Hits Hard: Wheat futures fell sharply, with May CBOT wheat down 11 cents to $5.36¾, K.C. wheat down 13½ cents to $5.48½, and Minneapolis wheat down 11¼ cents to $5.80, driven by tariff-related uncertainty. Mexico, a key U.S. wheat buyer, and Canada, a supplier of spring wheat, face trade disruptions that could alter export flows.
Global Supply Pressure: Lower Russian export prices and larger Australian wheat crop estimates (34.1 million metric tons) have kept world import demand soft, dragging WK futures down 90 cents since mid-February. The USDA is expected to raise global exporter stocks in upcoming reports, reinforcing bearish sentiment.
U.S. Export Sales: A sale of 130,000 metric tons of U.S. white wheat to South Korea provided a brief positive note amid the downturn. U.S. wheat exports are up 20% year-over-year, aligning with USDA projections, though tariff fallout could jeopardize this momentum.
Weather Watch Begins: Dry conditions in the U.S. Plains and Russia are starting to draw attention, though current forecasts of moderating temperatures and some precipitation limit bullish impact. Any prolonged dryness could shift market focus as planting season nears.
Fund Selling Continues: Funds were net sellers of 5,000 CBOT wheat contracts, contributing to technical selling pressure as prices test new lows. The market’s negative mood, compounded by slow exports and ample supplies, suggests further downside risk unless trade tensions ease.
Extended Commentary
Escalating trade tensions have intensified market volatility, pushing grain and oilseed prices lower. The U.S. decision to impose new tariffs on Canada, Mexico, and China has triggered retaliatory measures, notably China’s suspension of soybean imports from key U.S. suppliers and a new 10% tariff on U.S. soybeans. This has compounded existing pressures from a strong South American harvest, which has increased global supply and shifted China’s purchasing focus away from the U.S. Meanwhile, Mexico, the largest buyer of U.S. corn, faces potential trade disruptions, adding uncertainty to an already fragile market. Despite these headwinds, U.S. export sales remain relatively strong, with USDA reporting notable purchases of corn and wheat by Mexico and South Korea, offering limited support to prices.
In the wheat market, global supply pressures continue to weigh on prices. Larger-than-expected Australian wheat production and lower Russian export prices have softened global demand for U.S. wheat, dragging futures to new lows. The U.S. Plains and Russia are beginning to experience drier conditions, but forecasts of moderate precipitation have yet to shift market sentiment. While U.S. wheat exports are up 20% year-over-year, ongoing trade disputes and fund-driven selling continue to overshadow any potential recovery. Without a resolution to tariff conflicts, bearish fundamentals are likely to persist, keeping grain and oilseed markets under pressure in the near term.
