Weekly Recaps

U.S. wheat futures opened the week on a strong note, led by Kansas wheat, as traders reacted to deteriorating crop conditions in key HRW states. The rally coincided with Algeria’s milling wheat tender, though MATIF wheat showed a more hesitant response. Meanwhile, soybeans faced pressure as China’s tariffs on U.S. agricultural goods took effect. Export inspections indicated solid corn shipments but disappointing wheat figures. India projected record wheat production at 115.3 million metric tons, signaling ample supply ahead.

The Panamax market saw further gains, supported by increased Atlantic activity, particularly in trans-Atlantic business from the U.S. Fresh cargo flows and tightening vessel availability contributed to sizable rate improvements. In South America, activity picked up for March and April positions, reinforcing positive sentiment. Owners met improved bids with some resistance, further bolstering rates. While uncertainty persists regarding U.S. trade policy impacts, the expected second grain wave from ECSA added to market optimism.

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.

The Panamax market experienced a mixed performance, with little overall movement and continued uncertainty.

The week opened on a weak note, with grain prices under pressure. Weather conditions improved in key regions, as the cold spell in the U.S. receded, and heavy rains in Argentina provided relief. Russian wheat FOB prices edged higher, surpassing the second-nearest MATIF contract for the first time in nearly a year. Meanwhile, Brazil’s soybean production estimate was revised lower by AgRural, signaling a potential end to the recent trend of upward adjustments. The EU crop monitoring committee reported generally stable conditions but noted irreversible losses in parts of Ukraine, Morocco, and Algeria. On the demand front, Algeria and Iran issued tenders for corn, barley, and soymeal.

The Panamax market faced downward pressure, with a lack of fresh inquiries in the North Atlantic and softer conditions in the South Atlantic. Tonnage availability increased due to reduced demand, particularly for fronthaul cargoes. Some owners sought to resist lower rates, but the overall sentiment remained weak, with limited fixtures reported.

Monday saw a quiet session with CBOT closed for a U.S. holiday, leading to lower trading volumes in Euronext futures. Despite Friday’s rally in U.S. wheat, MATIF milling wheat futures ended weaker. The Saudi wheat tender was a key highlight, with the country purchasing 920k tons—well above the initial 595k ton target—while Russian wheat prices firmed slightly at $247 per ton FOB. Meanwhile, Brazil’s soybean harvest remained behind schedule, at 23% complete, compared to 32% last year.

The Panamax market maintained its positive momentum, following typical seasonal trends. The North Atlantic remained steady, with limited vessel availability supporting owners’ expectations. In contrast, the South Atlantic saw a more dynamic market, with increasing demand driving improved sentiment and stronger negotiations.

Wheat prices diverged as Euronext gained while CBOT declined. MATIF wheat found support from Algeria’s tender, lower Russian wheat crop projections, and a weaker euro. IKAR lowered its 2024/2025 Russian wheat export estimate to 43.0 mmt and production estimate to 77–87 mmt. Meanwhile, Russian wheat prices rose to $245/ton FOB for March delivery. Algeria sought 50k tons of soft milling wheat for April shipment. U.S. weekly export inspections showed strong wheat volumes, while President Trump’s new 25% tariffs on steel and aluminum heightened trade tensions. Despite this, Mexico’s corn purchases remained active, with the USDA reporting private sales of 365k tons for 2024/2025 delivery.

Atlantic: The market remained under pressure with weak demand and an oversupply of tonnage, particularly in the North Atlantic. Limited fresh cargo made it difficult for owners to secure strong rates, with charterers holding the upper hand in negotiations. In the South Atlantic, sentiment remained negative, with further corrections for forward positions, particularly for vessels ballasting to East Coast South America.

Grain markets opened on the defensive but rebounded after news broke that Mexico would delay imposing tariffs, following a last-minute agreement with Canada. This pause suggests tariffs are being used as a negotiation tactic rather than an end goal. President Claudia Sheinbaum announced that Trump agreed to suspend tariffs for a month in exchange for Mexico reinforcing its northern border. Similarly, the U.S. and Canada suspended tariffs temporarily, contingent on strengthened Canadian border security. However, China retaliated with new tariffs on U.S. coal, LNG, crude oil, and agricultural equipment, escalating trade tensions. Ukraine’s grain exports rose to 25.77 mmt, reflecting increased wheat and barley shipments, though corn exports declined. U.S. export inspections showed solid corn and soybean figures, but wheat lagged. Russian wheat prices continued their upward trajectory, while Eurozone inflation unexpectedly rose, reinforcing the European Central Bank's cautious stance on rate cuts.

Atlantic: Strong demand from South America pushed rates higher, with fronthaul routes tightening tonnage. The market remained firm for February-March arrivals, though long-term gains may be capped by weaker coal demand and slower economic growth.

The week began on a bearish note as grain prices extended their previous session’s losses. Argentina’s move to lower export taxes, coupled with favorable weekend rains, added downward pressure. Trade tensions between the U.S. and Colombia heightened concerns about potential disruptions in grain exports, particularly for corn, as Colombia had been the third-largest importer of U.S. corn in 2024.

The U.S. government backed down from imposing a 25% tariff on Colombian goods after securing an agreement on migrant deportations. Meanwhile, Russian wheat prices saw a slight increase, with 12.5% protein wheat quoted at $236.5 per ton FOB for February shipment. USDA reported private sales of 139,000 tons of corn to Mexico, while wheat export inspections reached a four-month high. Broader financial markets also weighed on sentiment, with oil prices falling 2% and natural gas plunging 6%.

PANAMAX

Atlantic: The Panamax market continued to struggle, with limited fresh demand across the region. The North Atlantic saw some fronthaul inquiries, but these had little impact on overall sentiment. The South Atlantic remained under pressure, with a slight indication of stabilization for P6 index dates, though nearby positions continued to weaken. Rates for trans-Atlantic trades remained subdued as tonnage availability exceeded requirements, leading to further rate softening.

The week began on a mixed note as MATIF milling wheat closed marginally lower, primarily due to a stronger EUR/USD exchange rate. Despite the subdued trading volumes, market participants turned their attention to the inauguration of Donald Trump as the 47th President of the United States. His administration hinted at delaying tariffs on China while adopting a more strategic trade stance. However, Trump’s announcement of potential 25% tariffs on Mexico and Canada by February 1 raised concerns about trade disruptions. Russian wheat prices softened slightly, with IKAR reporting a $3 decline to $234/ton FOB for February shipment. Meanwhile, Algeria and Iran issued tenders for corn, soymeal, and barley.

Atlantic: The Atlantic market remained sluggish with limited fresh demand and an oversupply of tonnage. Transatlantic and fronthaul routes saw muted activity, and rates continued to soften. South American volumes offered some promise but failed to impact rates meaningfully, while the US Gulf remained quiet.

Corn and soybeans carried over Friday's bullish momentum, supported by a favorable USDA report, while CBOT wheat also strengthened, likely driven by short covering by funds. Robust U.S. export inspections added to the optimism, with corn volumes exceeding expectations at 1.44 million tons. However, concerns over Argentina's crops emerged as heat waves and inadequate rains threatened yields. Meanwhile, funds extended their net long positions in corn while trimming shorts in soybeans, signaling a bullish stance on the complex.

The Atlantic market began with initial strength due to limited New Year tonnage, but rates flattened as more vessels entered the region. In the south, oversupply led to discounted rates, and forward fixing remained cautious. Spot vessels maintained premiums, but lack of fresh demand in the north and a long tonnage list saw rates ease, favoring charterers. EC South America faced additional pressure from long ballast lists and sub-index equivalent fixtures for early February.

Monday: Grain markets rebounded from Friday's losses, bolstered by a weaker dollar and pre-USDA report positioning. CBOT-denominated prices gained, though MATIF milling wheat remained an outlier. U.S. weekly export inspections showed mixed results, with wheat exceeding expectations while corn and soybeans remained within range. In Argentina, persistent hot and dry conditions continued to pose risks, while Brazil benefited from favorable weather. Kansas winter wheat conditions declined, adding concerns over the domestic crop.

Monday began with divergent price directions between European and CBOT futures, driven in part by EUR/USD volatility. European wheat found some support, countering pressure from news of Russia's expanded wheat export agreement with Morocco, which could challenge French exports. In Australia, ABARES raised wheat production forecasts to 31.9 mmt for 2024/25 (+23% y/y), while Russian winter crop conditions revealed alarming statistics, with only 32% rated good/excellent compared to 74% last year. U.S. weekly export inspections showed moderate volumes across soybeans, corn, and wheat but did little to bolster prices as analysts projected a record-breaking Brazilian soybean crop exceeding 170 mmt.

Panamax transatlantic activity saw a modest boost as charterers sought coverage ahead of the holiday season, but an oversupply of tonnage in the East Mediterranean kept pressure on rates. Fronthaul routes remained lackluster due to weak demand from the Black Sea and continued ballasting toward Gibraltar, leaving the market constrained.

Monday: US wheat futures began the week on a positive note but struggled to maintain gains as MATIF wheat remained unresponsive. Corn saw slight upward movement, while soybeans softened ahead of Tuesday’s USDA report. The Russian wheat market showed resilience, with FOB prices for 12.5% protein wheat climbing to $228/ton, up $2 from the previous week. Concerns about the poor condition of Russian winter grains were tempered by IKAR analysts suggesting the reality may be less dire. Meanwhile, China’s Politburo announced aggressive economic stimulus measures, signaling a shift in fiscal and monetary policies, but these had minimal impact on grains. U.S. export inspections highlighted weak performance in wheat, with only 227k tons inspected, significantly below the previous week’s 299k tons.

The Atlantic market faced persistent challenges, with limited grain and coal demand, an oversupply of tonnage, and a lack of fresh cargo keeping rates subdued. Some support came from South African coal activity, but overall tonnage imbalances continued to pressure owners. Rates in ECSA held relatively stable as South Africa absorbed some spot vessels, but charterers still managed to secure lower bids, leaving owners struggling to maintain previous levels.