A lot can happen in a week.
A mere 13 hours after collapsing stock and financial markets across the globe, President Trump reversed most of his ‘Liberation Day’ reciprocal tariffs for a 90-day hiatus. The President preceded his announcement to walk back the tariffs by announcing on X (the social media platform formerly known as Twitter) that ‘It is a good day to buy’. Nothing fishy about that at all.
The end result is still a lot of confusion with a smattering of relief. Many countries that thought they would be tariffed into extinction, have now been granted the opportunity to present more equitable trading terms to the US. The art of the deal.
Of course, the elephant in the room is the fact that China reciprocated with their own 84% reciprocal tariffs only for the US to double down in Beijing. Chinese imports now face a 145% duty on their goods – recently confirmed by the White House – which has caused further shocks to US markets. The escalating trade dispute between the world’s two largest economies is likely to have the effect of increasing the cost of goods, particularly tech, but would also cause a slowdown in economic growth well beyond the two countries borders. Ag commodities get thrown in the ‘Negatively Affected’ column as 44% of soybean production, 27% of wheat, and 16% of corn are traded globally. Anything that reduces demand – be it cost, or trade barriers – will be reflected by diminishing prices.
Enough about tariffs and Trump. Last night the USDA released their April WASDE report. It confirmed what we already knew. The world’s wheat market is suffering from reduced demand and consequently, building stocks. The USDA cut Chinese imports to only 3.5mmt (from 6.5mmt) reflecting record Chinese production.
The outlook for next season’s wheat crop is also building with EU27 forecasting 128mmt, up 13% from last year. The Black Sea outlook is also improving with Russian forecasts ratcheting higher and Romania looking at record production. Good in-crop rainfall across the Chinese winter crop also has analysts expecting production to be as good, if not better than last year’s 140mmt crop.
Next week
As we head towards the traditional seasonal break, all eyes will be on the sky, especially in the very dry SA and western VIC regions. Good luck to all farmers as we head into the new season.
2026 has opened with a familiar driver dominating the headlines: geopolitics. Forget Russia, Venezuela or Greenland, developments in Iran arguably carry far greater implications for
With little fresh direction, wheat prices have continued to follow the path of least resistance, grinding lower. After almost four years of entrenched conflict in
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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.
Trade dispute – what is it good for?
The end result is still a lot of confusion with a smattering of relief. Many countries that thought they would be tariffed into extinction, have now been granted the opportunity to present more equitable trading terms to the US. The art of the deal.
Of course, the elephant in the room is the fact that China reciprocated with their own 84% reciprocal tariffs only for the US to double down in Beijing. Chinese imports now face a 145% duty on their goods – recently confirmed by the White House – which has caused further shocks to US markets. The escalating trade dispute between the world’s two largest economies is likely to have the effect of increasing the cost of goods, particularly tech, but would also cause a slowdown in economic growth well beyond the two countries borders. Ag commodities get thrown in the ‘Negatively Affected’ column as 44% of soybean production, 27% of wheat, and 16% of corn are traded globally. Anything that reduces demand – be it cost, or trade barriers – will be reflected by diminishing prices.
Enough about tariffs and Trump. Last night the USDA released their April WASDE report. It confirmed what we already knew. The world’s wheat market is suffering from reduced demand and consequently, building stocks. The USDA cut Chinese imports to only 3.5mmt (from 6.5mmt) reflecting record Chinese production.
The outlook for next season’s wheat crop is also building with EU27 forecasting 128mmt, up 13% from last year. The Black Sea outlook is also improving with Russian forecasts ratcheting higher and Romania looking at record production. Good in-crop rainfall across the Chinese winter crop also has analysts expecting production to be as good, if not better than last year’s 140mmt crop.
Next week
As we head towards the traditional seasonal break, all eyes will be on the sky, especially in the very dry SA and western VIC regions. Good luck to all farmers as we head into the new season.
Have any questions or comments?
Click on graph to expand
Click on graph to expand
Click on graph to expand
Data sources: USDA, AHDB, 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.
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.