Wheat, Corn, and Soybeans

Wheat

Wheat futures saw gains across all three U.S. exchanges, with Chicago SRW up 10-11 cents, Kansas City HRW increasing by 6-9 cents, and Minneapolis spring wheat rising 5-6 cents. Japan issued a tender for 96,725 MT of wheat, including 62,545 MT from the U.S., while South Korea purchased 85,000 MT. SovEcon raised its 2025/26 Russian wheat export forecast to 38.3 MMT, reflecting tighter global supplies. However, EU wheat exports remain sluggish, totaling 12.5 MMT as of February 2, compared to 19.76 MMT in the previous year. Weather forecasts show minimal precipitation for the Plains, but heavier rainfall (1-2 inches) is expected in soft red winter wheat regions, potentially influencing market trends.

Corn

Corn futures extended their rally, with March contracts rising 2¼ cents in early Wednesday trading after closing 5¾ cents higher on Tuesday. Easing trade tensions following the U.S. decision to postpone tariffs on Mexican and Canadian imports provided market support. USDA confirmed a private export sale of 132,000 MT of corn to South Korea, while South Korean and Algerian buyers issued tenders for 140,000 MT and 240,000 MT of corn, respectively. The national average cash corn price climbed 9 cents to $4.54 ¼, and March futures settled at $4.94 ½. Traders now await the latest EIA ethanol production data, with recent reports signaling rising inventories amid declining production levels.

Soybeans

Soybean futures declined 6-8 cents early Wednesday after rebounding 10-17 cents on Tuesday, as China left soybeans off its latest retaliatory tariff list. Cash soybean prices increased 16 cents to $10.13 ¼, while soymeal futures surged $10.30 per ton. Soy oil, however, fell 75 points. Argentina’s persistent drought remains a key concern, with satellite data showing worsening soil moisture conditions. March soybean futures closed at $10.75, up 16¾ cents, as traders closely monitor South American crop developments.

Global Corn and Soybean Trends

Brazil’s corn prices are firming, with sellers reluctant to release supplies, while China continues expanding its domestic stockpiling. Soybean markets remain pressured as Brazil’s harvest progress lags at 7.6%-10.32%, coupled with falling prices due to Argentina’s export tax cuts and currency fluctuations. Argentina’s severe drought conditions, highlighted by satellite imagery, further amplify concerns over yield potential.

Global Wheat Trends

Ukraine’s grain exports increased by 10% year-over-year but declined in January, while Russia’s wheat exports in February are expected to halve compared to last year due to reduced profitability and supply constraints. Weather remains a critical factor, with adverse conditions impacting wheat crops across the European and Black Sea regions, as well as Australia, where dry spells threaten production.

Key Global Market Influences

Trade tensions continue to drive market uncertainty, as the U.S. imposed a 10% tariff on Chinese goods, prompting China to retaliate with new tariffs, including 15% on coal and LNG and 10% on crude oil, agricultural machinery, and automobiles. U.S. tariffs on Canada and Mexico were delayed by another month, mitigating immediate disruptions in North American agricultural trade.

U.S. export activity remains robust, with USDA reporting inspections for the week ending January 30 at 1.252M tons of corn, 1.013M tons of soybeans, and 253K tons of wheat. South Korea and Japan continue to increase wheat purchases, supporting global demand. Additionally, a USDA-confirmed private sale of 132,000 MT of corn to South Korea highlights sustained interest in U.S. supplies.

South America’s weather remains a dominant factor, with Argentina’s drought conditions worsening, jeopardizing both soybean and corn yields. Brazil’s soybean harvest remains behind schedule, while StoneX revised its production forecast downward to 170.9 MMT, citing dry weather risks. Celeres, however, raised its estimate to 174 MMT, reflecting a mixed outlook for production. Meanwhile, Brazil’s corn ethanol industry is expanding, offsetting lower sugarcane crushing rates.

Russian and Ukrainian grain exports are facing disruptions, with SovEcon reducing its Russian wheat export forecast due to tightening supplies. Ukraine’s exports, while up year-over-year, showed a decline in January. Additionally, Russian drone attacks on Ukrainian grain storage facilities near the Danube have raised concerns over regional supply chains.

The U.S. livestock and processing sector also posted significant updates, with the national cattle herd shrinking to its lowest level since 1951, a trend that may impact feed demand. Meanwhile, U.S. soybean crush in December reached a record high of 217.7M bushels, up 6.6% from last year, while corn usage for ethanol declined by 2.3% year-over-year to 473.2M bushels.

Export demand remains dynamic, with Argentina’s grain exports surging 36% year-over-year in January. Malaysia’s palm oil exports, however, dropped 12.3% month-over-month, reflecting shifting global vegetable oil demand. China strengthened its agricultural ties with Brazil, with COFCO securing a deal to ship 1.5M tons of certified sustainable Brazilian soy to Chinese dairy firms.

Weather concerns continue to influence global grain markets, as dry conditions persist in Australia, impacting cotton and sorghum crops. The European and Black Sea regions are also experiencing winter wheat challenges, while the U.S. faces regional weather impacts on water levels and transportation logistics, raising concerns over potential flooding risks.

Macroeconomic and financial markets are playing a role in commodity pricing, with U.S. grain futures declining while vegetable oil prices rose in response to new tariffs on Mexico, Canada, and China. The U.S. Dollar Index currently stands at 109.12, while crude oil is trading up 84 cents. Broader financial market movements, including a 92-point drop in March S&P 500 futures and a 514-point decline in Dow futures, suggest continued investor caution amid global trade uncertainties.