Agri- Commodities: 2-6/6/25

Monday Grain markets opened June on a mixed footing, with wheat futures initially rallying on renewed geopolitical fears following escalations between Ukraine and Russia. However, the rally soon fizzled as U.S. crop progress data turned sentiment more bearish. Spring and winter wheat condition ratings exceeded expectations, with plantings and harvests advancing steadily. Meanwhile, USDA export inspections showed strong corn loadings, but soybeans and wheat lagged.

Tuesday Tuesday brought a modest recovery for corn and soybeans, driven in part by expectations of renewed dialogue between U.S. and Chinese leaders. Wheat futures remained volatile as market participants reacted to developments in the Black Sea region. Ukraine’s Agriculture Ministry forecast a 10% drop in grain production for 2025, adding supply-side uncertainty. Globally, the OECD projected slowing economic growth through 2026, while inflation pressures persist. Meanwhile, a covert attack on the Kerch Bridge underscored the persistent risk premium in Black Sea logistics.

Wednesday Midweek trading was defined by choppy action and short-covering in European wheat markets. MATIF wheat once again hovered above the key €200 level, supported by an increasingly dangerous net short held by funds and mounting war tensions. Notably, Putin reportedly warned Trump of retaliatory measures after Ukrainian drone strikes. On the policy front, traders awaited the ECB’s decision with expectations of a 25 bp rate cut, signaling a potential easing bias amid sluggish eurozone growth.

Thursday Thursday saw broad-based gains, with soybeans lifted by positive sentiment following a phone call between Presidents Trump and Xi. The ECB’s dovish stance further supported the complex, although MATIF wheat underperformed. Weekly U.S. export sales landed within expectations, and USDA data confirmed solid early wheat commitments for the new marketing year. Algeria’s wheat import forecast was trimmed due to shipment delays, while the ECB signaled it may be nearing the end of its easing cycle, softening the euro’s bounce against the dollar. Friday On Friday, wheat led a week-ending rally, bolstered by pre-weekend short-covering and lingering geopolitical risk in the Black Sea. French wheat conditions slipped slightly, reflecting spring dryness, with implications for final yields. The U.S. dollar strengthened after a robust jobs report, tempering expectations for near-term Fed rate cuts. Meanwhile, grain traders turned their attention to next week’s key events: U.S.–China trade talks, CPI data, and dual USDA and CONAB updates. Speculative positioning revealed increased bearishness in corn and soybeans, while wheat shorts remained broadly unchanged.