Agri- Commodities: 23-27/02/26

Monday

Financial markets started the week under pressure amid uncertainty over US tariff policy. Ag markets closed mixed but mostly lower. Corn managed small gains on strong US exports, while wheat paused after its recent rally. Attention centered on Algeria’s tender, with results expected later in the day. The EU warned that Trump’s new global tariff could push duties on some EU exports above the 15% cap agreed in the trade deal, prompting the European Parliament to pause approval pending clarification from Washington.

US winter wheat ratings in Texas and Oklahoma remained below last year despite slight improvements, and little precipitation is forecast for the Plains. Weekly US export inspections showed corn and wheat exceeding expectations, while soybeans disappointed. Additional support for corn came from a USDA flash sale to Colombia. Meanwhile, MATIF futures in USD have risen toward Russian export levels, narrowing the spread with Black Sea offers on an FOB basis.

Tuesday

Markets lacked clear direction and closed mixed. MATIF wheat briefly retested recent highs before pulling back, while traders monitored fund positioning data for signs of short covering. Algeria purchased soft wheat for H2 April–May shipment at higher prices than its January tender, while Jordan made no purchase. EU soft wheat exports continued to advance, with official data at 15.38 mmt, though lineup indications suggest volumes are already significantly higher.

China returned from Lunar New Year holidays, and rumors of renewed PNW soybean interest lifted prices. Weather models introduced potential relief for the US Plains in the 8–16 day window. Meanwhile, confusion persisted around Trump’s new global tariff rate, which took effect at 10% despite earlier references to 15%, as China signaled it would assess its response ahead of further trade talks.

Wednesday

Wheat remained under pressure but only surrendered part of last week’s rally, while soybeans pushed to new highs. Market drivers continued to revolve around US-Iran tensions, tariff developments, potential Chinese buying, and intermittent weather concerns. Algeria reportedly secured around 600k tons of soft wheat, likely sourced from the Black Sea region.

Fund positioning confirmed heavy short covering in MATIF milling wheat, while non-commercial participants expanded their rapeseed net long. Attention also shifted to energy markets, as OPEC+ signaled it may raise output in April. The correlation between Brent crude and Chicago wheat has strengthened notably in recent months, reinforcing the cross-market influence of geopolitical risk.

Thursday

Another volatile session saw Chicago and MATIF wheat break a three-day losing streak, while Kansas wheat extended its decline. Soybeans were choppy but ended with limited losses. Support stemmed from Saudi Arabia’s GFSA tender for May–July arrival, which will offer an early indication of new-crop pricing. India also faces an unusually hot March, raising risks for wheat and rapeseed yields.

US export sales disappointed across wheat, corn, and soybeans, with old-crop wheat sales notably weak. Corn found partial support from a USDA flash sale to Japan. Indirect US-Iran nuclear talks in Geneva showed progress but no agreement, while preparations for a potential Trump–Xi summit appear delayed, adding another layer of uncertainty to trade relations.

Friday

Grains moved higher, led by US wheat, as geopolitical tensions rather than fundamentals drove sentiment. The US and Israel attacked Iran, killing its supreme leader, prompting retaliatory strikes and severe disruption to traffic through the Strait of Hormuz. Tanker flows slowed sharply as shippers paused routes through Hormuz and the Red Sea, intensifying volatility across oil and grain markets.

OPEC+ agreed to raise output more than previously expected, while French wheat ratings declined for a second week but remained above last year’s levels. USDA reported additional corn flash sales, and US insurance price averages now show soybeans offering relatively stronger planting incentives than corn. Managed money executed massive short covering in Chicago wheat, reducing the net short to its smallest level since 2022, while soybean net longs approached a five-year seasonal extreme. Rising Brent prices have provided continued momentum for grains, with Chicago wheat recently matching soybeans as one of the stronger performers year-to-date.