Another tumultuous week in wheat - and indeed commodities and stocks as a whole. President Trump rolled out 25% broad-based tariffs on Canada and Mexico this week, which has caused global commodity markets to swiftly reverse and saw the S&P stock market erase all the gains it had made since Trump’s inauguration.
Targeted countries are rolling out their own retaliatory tariffs aimed at hitting the US export sector hard. The Canadians are hitting back with their own tariffs aimed at US$155B worth of goods. The Chinese have also been swift to enact they’re own tariffs – including 25% on soybeans and sorghum, and 15% of wheat and corn – and have suspended the import licenses of three US companies.
It is rapidly becoming a game of ‘who will blink first’. Last night, the US President and Commerce Secretary Howard Lutnick temporarily rolled back some of the tariffs on goods that were previously included in the 2020 USMCA (US, Mexican & Canadian FTA). It remains to be seen if Canada will repeal the tariffs they imposed after the initial US order.
All of the headlines this week have been around Trump, tariffs and the Oval Office. You would be hard pressed to find much on the state of crops in the major producers as they start to come out of dormancy. As we move through March, temperatures will start to warm up – although Punxsutawney Phil saw his shadow thereby predicting another 6 weeks of winter in the US.
Keep an eye on rainfall in the US, but also Ukraine and Russia. A significant deficit of moisture is building across the Black Sea area, meaning a heavy reliance on Spring rains to give the crop a chance to meet potential. One recent report alluded to the fact that the Russian winter crop is going to come into Spring in better condition than it was in Winter.
India has also experienced a very dry couple of months. March is turning on the heat without any forecast of rain. Wheat is at grain fill and experience here would suggest that light weight and aborted grains could become an issue.
The week ahead….
It is becoming a chaotic and confusing marketplace. The CBOT Dec ’25 contract has lost 56 USc since mid Feb – roughly about the same time that the US President rolled back the first wave of tariffs. It is becoming clear that the US farmer is going to be at the forefront of feeling any impacts that the tariffs will have
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The art of the deal
Targeted countries are rolling out their own retaliatory tariffs aimed at hitting the US export sector hard. The Canadians are hitting back with their own tariffs aimed at US$155B worth of goods. The Chinese have also been swift to enact they’re own tariffs – including 25% on soybeans and sorghum, and 15% of wheat and corn – and have suspended the import licenses of three US companies.
It is rapidly becoming a game of ‘who will blink first’. Last night, the US President and Commerce Secretary Howard Lutnick temporarily rolled back some of the tariffs on goods that were previously included in the 2020 USMCA (US, Mexican & Canadian FTA). It remains to be seen if Canada will repeal the tariffs they imposed after the initial US order.
All of the headlines this week have been around Trump, tariffs and the Oval Office. You would be hard pressed to find much on the state of crops in the major producers as they start to come out of dormancy. As we move through March, temperatures will start to warm up – although Punxsutawney Phil saw his shadow thereby predicting another 6 weeks of winter in the US.
Keep an eye on rainfall in the US, but also Ukraine and Russia. A significant deficit of moisture is building across the Black Sea area, meaning a heavy reliance on Spring rains to give the crop a chance to meet potential. One recent report alluded to the fact that the Russian winter crop is going to come into Spring in better condition than it was in Winter.
India has also experienced a very dry couple of months. March is turning on the heat without any forecast of rain. Wheat is at grain fill and experience here would suggest that light weight and aborted grains could become an issue.
The week ahead….
It is becoming a chaotic and confusing marketplace. The CBOT Dec ’25 contract has lost 56 USc since mid Feb – roughly about the same time that the US President rolled back the first wave of tariffs. It is becoming clear that the US farmer is going to be at the forefront of feeling any impacts that the tariffs will have
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Click on graph to expand
Data sources: Reuters, SovEcon, USDA, 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.