Agri- Commodities: 3-7/3/25

Monday The week opened with a continuation of last week’s bearish trend, as grain markets faced significant headwinds. Wheat was particularly weak due to an upward revision in Australia’s crop estimate. Market sentiment deteriorated further on confirmation that the U.S. has implemented tariffs on China, Mexico, and Canada—25% on Canada and Mexico, and 20% on China. In response, China imposed retaliatory tariffs of 15% on key U.S. agricultural imports, including wheat, corn, and soybeans, effective March 10. Canada followed with 25% tariffs on U.S. goods worth $155 billion. Meanwhile, Russian wheat prices declined by $3 per ton to $248 FOB, adding to the bearish tone. Australian production estimates surged, with wheat up to 34.1 MMT (+31% y/y) and barley to 13.3 MMT (+23% y/y). Weekly U.S. export inspections showed solid corn movement at 1.35 MMT, while the USDA confirmed a 114k-ton corn sale to Mexico.

Tuesday Grain prices remained under pressure, with CBOT wheat hitting new contract lows before a late-session recovery. EU wheat exports rose to 13.93 MMT as of March 2, although line-up data suggests actual figures could be much higher. The USDA reported a 130k-ton white wheat sale to South Korea, indicating a potential competitiveness shift for U.S. wheat. Additionally, 20k tons of soybean oil were sold to unknown buyers. Weakness in crude oil continued for a third session after OPEC+ announced an April production increase, raising concerns about global demand amid escalating tariff conflicts. The euro strengthened, buoyed by Germany’s major debt overhaul and infrastructure fund approval.

Wednesday CBOT grain markets rebounded from oversold conditions on Wednesday, largely due to speculation that President Trump might delay tariff implementation. However, MATIF wheat continued its decline as the euro strengthened further. Trump granted a one-month tariff reprieve for U.S. automakers, urging them to shift production from Mexico and Canada to the U.S. Russia’s chief meteorologist reported that winter crops in the European part of Russia are in good condition despite lower precipitation. Syria issued a tender for 100k tons of soft wheat, while Jordan purchased 100k tons of barley at $230.50/ton C&F. Speculative positioning showed aggressive selling in MATIF wheat futures, with non-commercial traders increasing their net short position by 63.2k contracts.

Thursday CBOT grains extended gains for a second day, supported by bargain buying and delays in tariff implementation for Mexico and Canada. However, financial markets remained jittery, with investors awaiting the April 2 tariff deadline. Trump confirmed a postponement of the 25% tariffs on USMCA imports, following discussions with Mexican and Canadian leaders. The ECB cut interest rates to 2.5%, but signaled that its easing cycle is nearing an end. In exports, U.S. sales for the week totaled 416k tons of wheat, 961k tons of corn, and 408k tons of soybeans, with Mexico accounting for 36% of all U.S. corn commitments. Tunisia issued a tender for 25k tons of corn, with offers due Friday. Crop condition updates highlighted concerns in Eastern Europe and Ukraine due to persistent dryness, raising doubts about winter wheat yield potential.

Friday Markets ended the week mostly in the red, except for corn, which managed to eke out gains. The focus shifted to the upcoming USDA WASDE report, expected to deliver only minor adjustments to U.S. and global ending stocks. French wheat conditions improved slightly, with 74% of the crop rated good/excellent. Fund activity showed aggressive liquidation, with net long positions in CBOT corn shrinking by a third to 219.8k contracts, the steepest weekly decline in two years. Funds also extended net short positions in wheat and flipped to a net short in soybeans. Trade tensions escalated as China imposed 100% tariffs on Canadian canola oil and pea products, along with 25% tariffs on pork and seafood, in response to Canada’s tariffs on Chinese electric vehicles and metals. The USDA report, due over the weekend, is unlikely to provide major surprises, though South American production estimates remain a wildcard.