Wheat futures continued their downward trajectory, with May 2025 CBOT contracts starting the session at $5.93 1/2 per bushel, down 6 1/4 cents. Market sentiment remains bearish amid sluggish export demand and expectations of higher U.S. wheat acreage. Kansas City HRW and Minneapolis HRS contracts also opened lower, reflecting broad-based weakness across all wheat classes.

Corn markets faced headwinds early in the session, with May 2025 contracts opening at $4.97 per bushel, down 3 3/4 cents. Weak export inspections and concerns over rising U.S. acreage projections weighed on prices. However, ongoing dryness in South America remains a key factor that could limit further losses.

Soybean futures struggled to find direction, opening the session at $10.47 1/2 per bushel, down 1/2 cent. Weaker Brazilian harvest pace and shifting trade flows to China have provided some underlying support, but an overall slowdown in demand and expectations of higher U.S. soybean stock levels continue to put pressure on prices.

Key Global Market Developments:

Uncertainty surrounding U.S. exports remains a significant driver in wheat markets. The latest export inspections data showed 375,546 metric tons of wheat were shipped last week, up 50.14% from the previous week but still 22.09% below last year’s pace. Mexico and South Korea were the top buyers. U.S. wheat exports remain on track for a 20.71% increase year-over-year, but global competition, particularly from Russia and the EU, continues to challenge U.S. pricing power.

Corn export demand showed signs of slowing, with total weekly shipments at 1.134 million metric tons, down 30.11% from the previous week and nearly 12% lower than the same week in 2024. Mexico, Colombia, and Japan remained the largest buyers. Meanwhile, U.S. analysts are projecting 93.5 million acres of corn to be planted this year, roughly 3 million acres more than last year, which could lead to a record-high production of 391 million metric tons if weather conditions remain favorable.

Soybean shipments were reported at 858,679 metric tons, showing an 18.2% increase from the previous week but still 19% below last year's numbers. China continues to dominate purchases, accounting for more than half of the weekly exports. Meanwhile, Brazil’s soybean harvest has reached 36.4% completion, lagging last year’s pace, which could affect global supply availability in the short term.

Palm oil markets remain under pressure as India's imports shift toward alternative vegetable oils. Palm oil's premium over soyoil and sunflower oil has pushed Indian refiners to seek cheaper alternatives. Analysts expect India’s 2024/25 palm oil imports to fall to their lowest level in five years, which could weigh on Malaysian palm oil futures while supporting U.S. soyoil prices.

Weather conditions continue to shape market trends. The latest outlook for March forecasts above-average warmth across the U.S. Midwest, while frequent cyclones could bring beneficial moisture to key winter wheat-growing regions. In South America, dryness persists in Southeast Brazil, potentially affecting soybean and corn crops, while Argentina has received much-needed rainfall, improving crop conditions there.

Brazil’s second corn crop (safrinha) is 53.6% planted, trailing last year’s 59% pace. The slower progress could impact yield potential, which remains a key focus for global corn supplies.

The Trump administration's decision to maintain a Biden-era ethanol policy supporting E15 gasoline is expected to boost domestic corn demand. The policy ensures a wider market for ethanol-blended fuels, despite concerns from oil refiners about potential supply disruptions and price volatility.

China’s agricultural policy continues to evolve, with a new directive aimed at increasing farmers’ incomes and rural financing. The government is planning major investments in rural infrastructure and has pledged to support domestic corn and soybean production to reduce reliance on imports.

Argentina remains a growing force in agricultural exports, with Vietnam emerging as a key buyer of corn and soybean meal. The country is expected to account for 7% of global corn imports and 9% of soybean meal imports by 2034, further strengthening South America’s role in global grain trade.

Meanwhile, Malaysia’s palm oil production faces continued disruptions due to heavy flooding. Industry officials predict that tightened supplies will keep palm oil prices elevated in the short term, adding further uncertainty to vegetable oil markets.

In the livestock sector, U.S. cattle placements on feedlots rose 1.7% in January, though total feedlot numbers remain 0.7% lower year-over-year. Pork production has also declined, down 5.2% from last year, reflecting weaker consumer demand and supply chain constraints.

With U.S. crop acreage projections set for release next week and ongoing geopolitical uncertainties, grain markets will continue to face volatility in the weeks ahead.