Analysis Grains
Trade War Impacts American Grain Market
Import duties from the US and reactions to them kept the grain market in their grip during the last trading session. Canada and Europe seem to have their sights set on American agriculture to reason with Trump.
The May contract for wheat on the Matif closed €2 higher at €223.25 per ton yesterday. On the CBoT, the day closed in the red. Wheat closed 0.4% lower at $5.38¾ per bushel. Corn was the biggest loser during the last trading session, dropping by 1.7% to $4.48¾ per bushel. Soybeans closed 1.1% lower at $9.87½ per bushel.
The introduction of import tariffs by US President Donald Trump continues to concern players in the grain market. On Wednesday, a 25% duty came into effect on, among other things, European and Canadian steel and aluminum. Both Europe and Canada are not taking this lightly.
Europe retaliates with targeted duties on, among other things, American jeans, whiskey, and Harley Davidson motorcycles. Furthermore, the European Commission has come up with a 99-page list of goods on which an import duty is being considered. The list is dominated by meat, dairy, vegetables, and fruits. There are also notable items such as chewing gum, wafers, and negligees. Stakeholders can submit their views on the list.
For both corn and soybeans and soybean meal, the EU is a relatively important market for the US. According to the European Commission, the EU imported 4.8 million tons of soybeans from the US in 2024/25, and last year, according to USDA, nearly 600,000 tons of soybean meal went to Europe. According to data from the European Commission, this season already saw 2.6 million tons of corn imported from the US. It's not surprising that players in the American grain market are getting nervous about European countermeasures.
More than import duties
Canada is considering imposing a duty on bioethanol from the US, as Jonathan Wilkinson, the Canadian Minister of Energy, informed Reuters. Bioethanol is an important export product for the American agricultural sector. According to Reuters, a record amount of 1.54 million gallons (5.83 million liters) of bioethanol went to Canada last September.
Canada is not only exploring the possibilities of retaliatory duties but also other measures. It is possible that restrictions will be imposed on the amount of energy products exported to the US. For oil and gas, Trump wants to apply a lower import duty because America imports a relatively large amount from Canada.
Wheat in demand for Canadian farmers
Other news from Canada includes the acreage expectations from Stats Canada. For 2025, the statistical agency expects 27.5 million acres of wheat compared to 26.6 million acres last year. The canola acreage is 1.7% smaller at 21.6 million acres. According to the forecast, barley, oats, and soybeans will be grown slightly less in Canada, but the corn acreage is increasing.
In the Black Sea region, there is still unrest. Ukraine is willing to observe a ceasefire for thirty days, but there has been no green light from the Kremlin. In fact, during a Russian attack on the port of Odessa, four Syrian sailors were killed while loading a ship with wheat.
