US Agriculture Prices Continue to Fade

US agriculture commodities remain close to a multi-month low, driven by excessive supply and diluted demand.

Wheat

Wheat Prices Plummet on Weak U.S. Exports

• Wheat futures continued to slide, below $530 per bushel, their lowest in more than two months, as weak weekly export sales data and a stronger dollar raised concerns about U.S. wheat export prospects.
• USDA reported a net decline of 242k metric tons in wheat sales, well below the expected net positive sales of 300k – 700k tons. Analysts attributed the poor export performance to strong global wheat supplies.
• Furthermore, the U.S. confirmed agreements with Russia and Ukraine to ensure safe navigation in the Black Sea. This is seen as bearish for wheat prices, as it may pave the way for more secure wheat exports from the two countries.

Soybean Futures Strengthen on Diminished Acreage

• Soybean futures traded slightly above $10 per bushel, holding close to a one-month high, ahead of the USDA’s annual prospective plantings.
• Analysts expect the USDA to lower its forecast for planted acres from its February forecast.
• On the demand front, soybean sales to overseas buyers totaled 338.5k tons in the week that ended on March 20, down 4% from the previous week and 28% from the prior four-week average.
• US-China trade tensions have already weakened soybean exports, as China retaliated by increasing duties on US agricultural products and shifting soybean purchases to Brazil, which is enjoying a bumper harvest.

Corn Prices Retreat on Boosted Planting

• Corn futures fell past $4.50 per bushel, retreating from the highest level since the October 2023 peak, as growing global supply weighed on prices.
• US farmers are expected to expand corn acreage by 4.2% this spring, boosting planted area to nearly 94.6 million acres, driven by favorable weather, low hay prices that are shifting production from silage to grain, and a reallocation from soybeans, wheat, and sorghum. This increase in supply was enough to offset strong export demand and record ethanol production.
• Meanwhile, in India, corn prices have dropped on average by 4% amid a ~9% increase in maize sowing in key regions, weakened feed demand due to bird flu outbreaks, and government-led sales of rice at lower prices for ethanol production, collectively driving the sustained price decline.