The fact that the wheat market has been relatively unchanged week on week doesn’t imply the market has been without volatility. After a slightly bearish USDA report, wheat was supported by some better-than-expected US export data as bargain hunters came out of the woodwork.
This month’s USDA report largely lifted global stocks on the back of reduced demand from China. Previously the USDA had penciled in 23mmt of corn demand and about 12mmt of wheat demand. The agency now pegs China’s 2024-25 corn and wheat imports at 10 million and 8 million metric tons respectively and down 57% and 32% from the average volumes of the previous four seasons.
China’s stated aim of becoming self sufficient is starting to take shape. They have recently dropped a ban on GM technology in a bid to improve domestic production. This is expected to take some time to be achieved, but the State has clearly stated aims to be self-reliant on staple food and feed products like wheat, corn and rice.
The weekly report wouldn’t be complete without mentioning the new raft of tariffs and counter tariff’s distorting the marketplace. In a blow to Canadian producers, China levied 25% on pork and fish and a whopping 100% import tariff on canola oil and meal. It is important to note that the Chinese import tariffs are not targeting canola seed – which is by far the bigger of the canola commodity business into China… yet. The anti-dumping investigation is still ongoing.
ICE canola prices (May ’25) have lost CA$68/t for the week which has flowed on to GM prices here. It feels like the reaction in the market is overblown as the Chinese will still import seed for their own crush, so the tap hasn’t been completely shut off. European (MATIF) canola futures also took a hit on the premise of cheaper Canadian supplies where the GM can supplement the non-GM product.
Overnight, President Trump threatened a 200% tariff on European alcohol imports. Opening a new front in the tariff disputes was viewed poorly, with stock markets feeling the pressure. The S&P 500 finished the day more than 10% below its record high, reached last month.
The week ahead….
April 2 looms large on the calendar as the date when Trump decides whether to implement the broad ranging tariffs on Canada and Mexico. Of concern, is the possibility that the tariff’s will go further and target other agricultural imports, including our beef and lamb sector.
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
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.
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.
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.
The hits keep coming
This month’s USDA report largely lifted global stocks on the back of reduced demand from China. Previously the USDA had penciled in 23mmt of corn demand and about 12mmt of wheat demand. The agency now pegs China’s 2024-25 corn and wheat imports at 10 million and 8 million metric tons respectively and down 57% and 32% from the average volumes of the previous four seasons.
China’s stated aim of becoming self sufficient is starting to take shape. They have recently dropped a ban on GM technology in a bid to improve domestic production. This is expected to take some time to be achieved, but the State has clearly stated aims to be self-reliant on staple food and feed products like wheat, corn and rice.
The weekly report wouldn’t be complete without mentioning the new raft of tariffs and counter tariff’s distorting the marketplace. In a blow to Canadian producers, China levied 25% on pork and fish and a whopping 100% import tariff on canola oil and meal. It is important to note that the Chinese import tariffs are not targeting canola seed – which is by far the bigger of the canola commodity business into China… yet. The anti-dumping investigation is still ongoing.
ICE canola prices (May ’25) have lost CA$68/t for the week which has flowed on to GM prices here. It feels like the reaction in the market is overblown as the Chinese will still import seed for their own crush, so the tap hasn’t been completely shut off. European (MATIF) canola futures also took a hit on the premise of cheaper Canadian supplies where the GM can supplement the non-GM product.
Overnight, President Trump threatened a 200% tariff on European alcohol imports. Opening a new front in the tariff disputes was viewed poorly, with stock markets feeling the pressure. The S&P 500 finished the day more than 10% below its record high, reached last month.
The week ahead….
April 2 looms large on the calendar as the date when Trump decides whether to implement the broad ranging tariffs on Canada and Mexico. Of concern, is the possibility that the tariff’s will go further and target other agricultural imports, including our beef and lamb sector.
Have any questions or comments?
Click on graph to expand
Click on graph to expand
Click on graph to expand
Data sources: Reuters, USDA, Mecardo, Bloomberg, Next Level Grain Marketing
Categories
Have any questions or comments?
Technical twist drives wheat
Another mostly quiet week in the wheat pits. The Feb USDA and WASDE report barely rated a mention, other than raising US ending stocks and
Aussie dollar jump and impact on grain
The Australian dollar relative to the US dollar has lifted to levels not seen since early 2023, and not sustained since early 2022. We all
Macro take the wheel
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
Record yields in WA
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
Want market insights delivered straight to your inbox?
Sign up to the mailing list to get regular updates to new analysis and market outlooks
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.
SERVICES AND CAPABILITIES STATEMENT BROCHURE
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.