Give or take a few cents, the US wheat market close last night was relatively unchanged for the week. Some supportive news, including better-than-expected new crop US export data and the announcement of Chinese stimulus measures aimed at improving domestic consumption, helped agricultural commodities recover after last week’s moderately bearish USDA report.
Reports of dry conditions in the US Plains and Black Sea were also considered supportive, although it is too early to get too concerned.
SovEcon reports that Russian wheat areas miraculously avoided major freeze damage but notes that Spring weather will hold the key. The fact that the Russian crop came out (or is coming out) of dormancy in better condition than it went in, sets a solid floor for the harvest, which is now only a few short months away. The warming trend for Northern Hemisphere winters has been the catalyst for the emergence of countries like Russia to become the force they are today. Some rain fell this week on the Turkish and Russian sides of the Black Sea although the Ukrainian side remains dry. This is a point to watch, as the rainfall deficit is mounting, and combined with the obvious challenges of getting a crop in and off, the harvest in Ukraine warrants attention
European canola futures (MATIF) enjoyed something of a rebound this week as EU crushers are sending a clear price signal that they want seed now. There is a building inverse in the EU market as poor conditions in Europe and the possibility of a poor crop in Ukraine starts to squeeze the nearby contract months. US planting intentions also suggests less soybeans, creating more reliance on South American origins.
One of the more puzzling targets of Trump’s tariff dispute has been the concept of charging Chinese-linked bulk vessels a US$1.5M levy for berthing in US ports. The US exported US$64B of agricultural crops, animal feed, and vegetable oils in 2024 (US Census Bureau of Trade). The plan to levy a fee on Chinese-owned or built vessels – the idea being to promote US shipbuilding – is causing significant ripples through not only the Ag industry but the energy, mining, and manufacturing sectors as well. US coal exports tally US$130B a year alone. Exporters are already baulking at the proposed fees – due to come into effect in May – with the potential to limit US exports.
The week ahead….
Expect pressure on the market – particularly canola – as the April 2 deadline approaches. As the Canadians introduced and kept their own retaliatory tariffs (ice they’re currently in place), it is considered a fåit accompli that the US tariffs will be reintroduced
This weeks commentary is more about macro-economics and geopolitics that anything directly wheat oriented. Having climbed to over 0.70USc, the AUD has tipped over in
The final harvest reports are in, with further updates likely to offer minimal changes. Western Australia has received the promised bumper crop, while receivals on
The global canola trade had another significant shift last week with China reducing tariffs on Canadian canola. The response in the Canadian markets was strongly
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Mixed outcomes for the ag market
Reports of dry conditions in the US Plains and Black Sea were also considered supportive, although it is too early to get too concerned.
SovEcon reports that Russian wheat areas miraculously avoided major freeze damage but notes that Spring weather will hold the key. The fact that the Russian crop came out (or is coming out) of dormancy in better condition than it went in, sets a solid floor for the harvest, which is now only a few short months away. The warming trend for Northern Hemisphere winters has been the catalyst for the emergence of countries like Russia to become the force they are today. Some rain fell this week on the Turkish and Russian sides of the Black Sea although the Ukrainian side remains dry. This is a point to watch, as the rainfall deficit is mounting, and combined with the obvious challenges of getting a crop in and off, the harvest in Ukraine warrants attention
European canola futures (MATIF) enjoyed something of a rebound this week as EU crushers are sending a clear price signal that they want seed now. There is a building inverse in the EU market as poor conditions in Europe and the possibility of a poor crop in Ukraine starts to squeeze the nearby contract months. US planting intentions also suggests less soybeans, creating more reliance on South American origins.
One of the more puzzling targets of Trump’s tariff dispute has been the concept of charging Chinese-linked bulk vessels a US$1.5M levy for berthing in US ports. The US exported US$64B of agricultural crops, animal feed, and vegetable oils in 2024 (US Census Bureau of Trade). The plan to levy a fee on Chinese-owned or built vessels – the idea being to promote US shipbuilding – is causing significant ripples through not only the Ag industry but the energy, mining, and manufacturing sectors as well. US coal exports tally US$130B a year alone. Exporters are already baulking at the proposed fees – due to come into effect in May – with the potential to limit US exports.
The week ahead….
Expect pressure on the market – particularly canola – as the April 2 deadline approaches. As the Canadians introduced and kept their own retaliatory tariffs (ice they’re currently in place), it is considered a fåit accompli that the US tariffs will be reintroduced
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Data sources: Reuters, USDA, SovEcon, Bloomberg, Next Level Grain Marketing, Mecardo
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Independent analysis and outlook for wool, livestock and grain markets delivered to you as it’s published
Listen to the podcast
Join the Mecardo team for the Commodity Conversations podcast, where we provide short weekly market recaps and longer conversations with guests to discuss the drivers and trends in livestock, grain and fibre markets.
MEET THE TEAM
Our team of market analysts are recognised as leaders in Australian Ag market analysis, providing invaluable insights to help you navigate the ever-changing commodity landscape.
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We don’t just bring you the most up to date market insights. Find out more about Mecardo’s services including risk management advisory, modelling, benchmarking, research & consultancy.