Analysis Grains
Trump's trade policy is unpredictable
An import duty from the US on products from Canada and Mexico, or no, not really. If you blink your eyes, something has changed again. Given the price movements of grains on the futures markets, traders have their own thoughts. Australia is heading towards a larger wheat harvest than in previous forecasts. Despite drought, wheat performed better there than earlier expected. This is not the case in Argentina. There, the upcoming soybean harvest could turn out to be smaller than expected due to lack of rain.
The March contract for wheat on the Matif closed €2.50 higher at €234.50 per ton yesterday. Prices on the CBoT also closed in the green. Wheat closed 1.3% higher at $5.66¾ per bushel. Corn performed slightly better than wheat with a gain of 1.4% to $4.88¾ per bushel. The biggest gainer on the Chicago exchange in the last trading session was soybeans. Soybeans closed 1.6% higher at $10.58¼ per bushel.
Donald Trump's import tariffs continue to cause unrest in the markets. Last weekend, it seemed likely that a 25% duty on products from Mexico and Canada would be imposed. Initially, this weighed on grain prices. However, it was later announced that the tariff for Mexico is postponed after the country agreed to deploy 10,000 troops to guard the border with the US. Monday afternoon, it was announced that the introduction of import tariffs for Canada is also postponed by thirty days after Trump and Canadian Prime Minister Trudeau announced cooperation in combating organized crime.
The additional import duty on products from China remains in place for now. China announced retaliatory measures today. This includes a 15% duty on coal and LNG from the US and a 10% duty on agricultural machinery, cars, and trucks. Whether there will be a duty on American soybeans, as was the case in the previous trade war, has not been announced (yet).
The Ikar price of Russian wheat increased by $2.50 to $239 per ton. Russian grain exports amounted to 660,000 tons. This is the same as the previous week. However, Russia exported slightly more wheat last week, namely 590,000 tons compared to 530,000 tons the week before.
Wheat performs better than expected
According to the market bureau Australian Crop Forecasters, the Australian wheat harvest is 2 million tons larger than previously expected. The bureau's harvest estimate has been revised from 29 to 34.5 million tons to 32 to 35.5 million tons. Abares, the statistics service of the Australian Ministry of Agriculture, came up with a harvest forecast of 31.9 million tons in December. Especially in the province of Western Australia, wheat performed much better than expected despite limited rainfall during the growing season. Australia is likely to export 24 million tons of wheat according to Australian Crop Forecasters. Prices for Australian wheat were under pressure due to the larger harvest, but some traders now believe the market has found its bottom.
In Argentina, there was less positive news about the upcoming harvest. EarthDaily Analytics estimates the soybean harvest at 45 million tons, compared to the estimate of 49.6 million tons from the Buenos Aires exchange. Unlike, for example, the estimates of the Buenos Aires and Rosario exchanges, EarthDaily does not base its estimates on surveys among farmers but on satellite images. Based on those images, the analysts of the bureau state that the crops in Argentina are in moderate condition. The rain that has fallen recently is beneficial for the crops in Argentina, but may not make the difference. The bureau compares 2025 with 2018 when lack of moisture cost yield in Argentina.
