Agriculture Futures Mixed

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US agricultural products managed to offset some of their losses despite weak US exports.

Wheat

Wheat futures hold above $5.5 mark as demand for US wheat weakened
  • US wheat exports plummeted more than 20% y/y in February.
  • Wheat futures remain above $5.50 per bushel, recovering from a six-month low of $5.16 on March 4th.
  • The USDA’s March report showed an increase in US wheat supplies, primarily from higher imports, although domestic use and exports have fallen.
  • The USDA’s latest projections also indicated an unexpected rise in US wheat acreage and a significant increase in supplies for the 2025/26 season.
  • While US stocks are up, global supplies are tightening due to adverse weather in major exporting regions.
Corn

Corn futures rebound, but concerns remain
  • US exports increased in February y/y, approaching a 9% annual growth rate.
  • Corn futures rebounded to $4.70 per bushel from a near three-month low of $4.27 on March 4th, supported by tighter global supplies and trade uncertainties.
  • March’s WASDE report showed a 1.4 million-ton decline in global ending stocks to 288.9 million, driven by lower inventories in China and Argentina.
  • While global production is forecast higher due to gains in India, Russia, and Ukraine, output in South Africa and Mexico is set to decline.
  • In South America, favorable weather in Brazil accelerated the 2024/25 soybean harvest, clearing the way for second-crop corn planting, while improved rainfall forecasts in Argentina bolstered yield expectations, limiting the rise in corn prices.
Soybeans

US soybean exports and prices fell
  • US soybean exports for February fell nearly 50% compared to last year.
  • Soybean futures remained above $10.00 per bushel, recovering from a near two-month low of $9.78, amid expectations that China will shift back to US soybeans once Brazil’s supply starts to deplete.
  • This outlook is supported by a tightening global supply, driven by a 1.1-million metric ton decrease in global ending stocks, now estimated at 93.6 million.
  • The surge in global soybean crush, particularly from key buyers like China, Argentina, and others, is also supporting prices.
  • However, these gains are constrained by weak soybean oil prices, concerns that Chinese deflation could temper broader demand, and a strong South American harvest, which could further limit US exports.