Wheat futures saw fluctuations in the latest session, with May 2025 CBOT wheat opening at $5.87 3/4 per bushel after closing down 5 3/4 cents in the previous session. The market remains focused on Russian export trends, with SovEcon lowering its 2024/25 Russian wheat export forecast to 42.2 million metric tons (MMT) due to slow shipments and unfavorable margins. Meanwhile, EU soft wheat exports have reached 13.65 MMT since July 1, down significantly from 21.31 MMT during the same period last year.
Corn futures posted mild gains early Friday, with May 2025 contracts opening at $4.94 1/4 per bushel, rebounding after closing down 2 3/4 cents. Ethanol market dynamics continue to influence corn prices, as the EIA data suggests steady-to-slightly-lower production due to tighter margins. Meanwhile, Brazil's February corn exports are estimated at 1.29 MMT, a slight increase from previous projections. The U.S. market remains cautious amid uncertainty over President Trump’s planned tariffs on Mexico and Canada, which could disrupt trade flows.
Soybeans opened the session lower, with May 2025 contracts starting at $10.48 3/4 per bushel, after closing up 1 1/4 cents in the prior session. Brazil's February soybean export estimates have been revised down to 9.35 MMT, a reduction from the previous 9.72 MMT projection. In the European market, EU soybean imports have reached 8.95 MMT since July 1, up from 8.03 MMT last year. The market remains under pressure as South American harvests progress, adding to global supply expectations.
Key Market Drivers and Global Trends
The wheat market continues to grapple with tightening Russian export volumes. SovEcon’s downward revision of Russia’s 2024/25 wheat exports reflects the economic difficulties faced by exporters, including a strengthening ruble and weak margins. Despite these challenges, SovEcon has increased its 2025/26 Russian wheat export forecast to 38.9 MMT, reflecting expected carryover stocks from the slower export pace this season. The European wheat market remains subdued, with EU soft wheat exports significantly behind last year’s levels.
U.S. weather trends favor winter wheat development, with a widespread warming trend settling over major crop areas. Temperatures are forecasted to remain 9-18°F (5-10°C) above normal across the country, particularly benefiting wheat-growing regions in the Northern and Central Plains. However, an active storm track could bring sporadic rainfall to some areas, influencing soil moisture levels ahead of the growing season.
Corn traders are closely watching ethanol production levels, as market expectations suggest a slight decline in output due to weaker margins. Additionally, South Korea's latest tender secured 68,000 MT of U.S. corn, signaling strong demand from key international buyers. However, uncertainty lingers over U.S. trade policies, as President Trump reaffirmed that tariffs on Mexican and Canadian imports will take effect on March 4.
South America’s weather remains a crucial factor for soybean and corn markets. In Argentina, very heavy precipitation is expected across the Pampas region over the next 10 days, with rainfall surpluses of 35-150+ mm above normal in some areas. This should provide relief for crops still in development stages. Conversely, Brazil is facing persistent dryness, particularly in the Southeast and Central-West regions, where rainfall deficits are projected to reach 20-65 mm below normal over the next two weeks. While favorable for harvest progress, the dry outlook raises concerns for late-developing crops.
Palm oil markets remain in focus, with production forecasts influencing global vegetable oil trends. Indonesia's 2025 palm oil output is projected to increase by 2.2 MMT, while Malaysia’s output is expected to decline slightly. Industry analysts suggest that high palm oil prices relative to soybean oil could shift demand patterns, particularly in key importers such as India and China.
Brazil’s grain sector is also seeing tax policy shifts. The governor of Para state announced plans to revoke a controversial state tax on grain production, which had faced opposition from farmers. Meanwhile, Hidrovias do Brasil SA, a major grain transport operator, reported financial losses due to drought-related disruptions in Amazon river transportation. Improved river navigation conditions in the second half of the year are expected to aid Brazilian export flows.
On the global trade front, Mexico’s lower house has approved a ban on GMO corn cultivation, reflecting ongoing policy shifts in key agricultural markets. Additionally, the European Union has imported 8.95 MMT of soybeans and 4.23 MMT of rapeseed so far in the 2024/25 season, highlighting continued demand for oilseeds despite shifting trade dynamics.
The combination of evolving export conditions, South American weather variability, and geopolitical trade uncertainties continues to shape the grain markets. With wheat exports slowing, corn trade holding firm, and soybean demand fluctuating, market participants are bracing for further volatility in the weeks ahead.