Market News

Grains, oilseeds fall on tariff concerns

Soybeans were lower on fund and technical selling. There’s more rain in the forecast for parts of Argentina and Brazil’s harvest has hit the halfway point. The USDA’s next supply, demand, and production numbers and CONAB’s updated projections for Brazil are both out next week. New tariffs against key U.S. trading partners are now in effect. China has responded by suspending soybean imports from three U.S. firms. Beijing has largely switched its soybean purchases to Brazil because of price, seasonal availability, and geopolitics, but psychologically, this is a hit to beans. Soybean meal and oil moved lower on the tariff tensions. Unknown destinations did purchase 20,000 tons of 2024/25 U.S. bean oil ahead of the open, the second day in a row with an announced sale for a running total of 40,000 tons. The U.S. imports canola oil from Canada, while Mexico is a notable customer of soybeans and soybean products.

Corn was lower on fund and technical selling. Corn is watching weather in Argentina, second crop planting in Brazil, and the tariff situation. China and Canada have announced retaliatory measures, and Mexico could soon. China really hasn’t purchased that much U.S. corn this marketing year, but Mexico is the leading buyer of U.S. corn and Canada is the top ethanol customer, while picking up minor amounts of corn. The U.S. Energy Information Administration’s weekly ethanol production, stocks, and export numbers are out Wednesday. Last week’s numbers had the domestic supply surging to multi-year highs. There’s some talk of negotiations with Brazil on their ethanol import tariff, but nothing firm. Stateside, the trade’s monitoring conditions ahead of widespread U.S. planting.

The wheat complex was lower on fund and technical selling. Some U.S. winter wheat growing areas will see another round of rain and snow this week. The USDA’s monthly crop condition update saw another round of mixed changes for U.S. ratings, with parts of the winter wheat crop in great shape and other areas looking comparatively poor. The trade also has an eye on weather in Europe, India, and the Black Sea region, while waiting to see what happens in negotiations to end Russia’s war on Ukraine. South Korea did buy 130,000 tons of U.S. 2024/25 white wheat ahead of the open. Mexico’s a key buyer of U.S. wheat and while the U.S. imports spring and durum wheat from Canada, it also exports a lot of bakery goods north of the border.