Agri- Commodities: 13-17/04/26

Monday

Wheat prices started the week strong, supported by renewed US-Iran escalation and disappointing precipitation in the US Plains, as parts of Kansas missed recent rains and forecasts offered little additional relief. US wheat futures led the rally, while MATIF followed more cautiously, and soybeans declined amid concerns that rising geopolitical tensions could negatively affect US-China trade relations. Oil markets reacted only modestly to the US blockade of Iranian ports, suggesting expectations of a potential deal remained in place.

US fundamentals were mixed, with winter wheat conditions falling to 34% G/E, well below last year, while planting progress for corn, spring wheat, and soybeans advanced. Export inspections showed steady soybean demand but weaker figures for corn and wheat. Russia saw wheat prices decline, with FOB values lower week-on-week, while a strengthening ruble continued to pressure exporter margins. At the same time, a stronger EUR/USD added pressure on MATIF prices.

Tuesday

Kansas wheat extended its rally on continued concerns over poor US crop conditions, pulling Chicago wheat higher and further decoupling price direction from oil. Corn remained relatively stable despite signs of renewed demand, while oilseeds weakened alongside a correction in energy markets.

Global supply updates pointed to generally comfortable conditions. Russia reported stable winter crop conditions, while France showed strong wheat ratings and a modest increase in planted area. In South America, Brazil’s CONAB raised both corn and soybean production estimates, reinforcing expectations of ample supply. Export activity remained active, with US corn sales to Mexico and unknown destinations, while EU wheat exports continued to outpace last year. At the macro level, the IMF warned that the Middle East conflict could weaken global growth and raise inflation risks.

Wednesday

Corn led gains midweek, supported by concerns over dryness in Brazil and planting risks, while soybeans found support from improved sentiment following more positive US-China rhetoric. Wheat markets were mixed, with US futures slightly higher and MATIF under pressure, while broader financial markets showed increased risk appetite as equities reached record highs.

European data highlighted mixed developments, with Germany projecting slightly higher wheat area but lower production, while rapeseed output is expected to increase. France adjusted its export outlook marginally and trimmed ending stocks. At the same time, expectations of reduced corn planting in France due to high input costs pointed to potential structural shifts in cropping decisions. Positioning data showed heavy liquidation of speculative long positions in MATIF wheat, contributing to recent price pressure.

Thursday

The focus remained firmly on US HRW wheat, with Kansas futures extending gains for a fifth consecutive session as drought concerns persisted. While Chicago and MATIF wheat followed, the divergence suggested that the issue remained largely regional. The US Drought Monitor confirmed that a significant share of winter wheat areas remained affected, with little improvement from recent rainfall.

Elsewhere, supply prospects remained strong. Argentina raised its corn production forecast following improved crop conditions and expanded plantings, pointing to increased export availability. Western Australia signaled a shift away from wheat toward other crops due to cost pressures. US export sales were mixed, with weaker wheat demand but solid corn performance. In Algeria, durum wheat purchases highlighted continued import demand, while oil markets softened slightly on renewed hopes of de-escalation in the Middle East.

Friday

A sharp decline in oil prices weighed on wheat at the end of the week, while corn and soybeans remained relatively stable as their correlation with energy markets appeared weaker. However, geopolitical uncertainty quickly resurfaced, with conflicting signals around access to the Strait of Hormuz driving renewed volatility.

European crop conditions remained stable, with French wheat ratings holding steady and maize planting progressing. In the US, concerns increased over potential frost in drought-affected winter wheat areas, with no improvement expected in upcoming condition reports. On the demand side, Turkey announced a temporary reduction in corn import tariffs to support domestic supply. Positioning data showed managed money reducing long exposure in corn and soybeans, while wheat positions remained largely unchanged.