Agriculture Futures Mixed

Wheat

Speculators anticipate bullish movement in 2025 for wheat

• Wheat futures (May contracts) traded just above $6.0 per bushel as cold weather threatened crops in the Black Sea and US Plains region, raising concerns about tightening supplies.
• Additionally, there was some relief that President Donald Trump had not yet announced tariffs on agricultural trade.
• In February, the USDA unexpectedly cut domestic ending stocks for 2024/25 by 4 million bushels to 794 million, while global stocks fell by 1.3 million tons to 257.6 million, primarily due to downward revisions for China.
• On the demand side, the USDA’s latest report showed that wheat export sales surged 45% from the prior four-week average to 569,600 tons in the week ending February 6.

Corn front month contract soars on amplified US exports

• May corn futures retreated from a 1-year high, trading close to $5.05 per bushel, as tightening global supply and strong demand offset trade-related uncertainty.
• Argentina’s drought-driven yield cuts and Brazil’s delayed planting are expected to lower global ending stocks by 3 million tons.
• US ethanol production continues to exceed expectations, reinforcing domestic demand for corn feedstocks, while robust US exports, driven by strong foreign buying, have added further support.
• However, downside risks remain, including the potential for increased Argentinian exports and uncertainty over President Trump’s tariff policies, which could disrupt global trade flows.

Soybean prices hover between 10-10.5 range amid lower sales

• May soybean futures hovered around $10.5 per bushel, nearing the one-month low of $10.3, amid a stronger USD and expectations of higher supply and decline in demand.
• In Brazil, harvest progress continued, with 23% of the country’s massive soybean crop collected as of last week.
• On the demand side, the latest USDA weekly report revealed a sharp 74% drop in soybean sales from the previous four-week average, totaling just 185k tons for the week ending February 6, well below the projected range of 300k-800k tons.
• Investors now focus on President Trump’s announcement of reciprocal tariffs, as well as ongoing negotiations toward a potential resolution of the war in Ukraine.