Agriculture Prices Up but Trade War Awaits

Agriculture futures surged on President Trump’s decision to pause some of his planned tariff hikes and broad-based dollar weakness, but exports data sends mixed signals.

Wheat

Wheat futures found support but exports softened

• Wheat futures rose above $550 per bushel, strengthened over +5% during last two weeks, supported by mounting weather concerns in key growing regions, broad-based dollar weakness, and lingering uncertainty over trade tariffs that could further weigh on U.S. agricultural exports.
• At the same time, dry conditions across the U.S. Central and Southern Plains, coupled with limited rainfall forecasts, are expected to put additional stress on wheat crops.
• According to latest USDA report, 48% of the U.S. winter wheat crop is rated in good-to-excellent condition, slightly above analyst expectations of 47% but down from 56% at the same time last year.
• Meanwhile, the USDA revised its U.S. wheat supply outlook, raising its estimate for 2024-25 ending stocks to 846 million bushels, up from the previous 819 million and above market expectations of 822 million.

Corn skyrocketed on two-month high

• Corn futures surged above $4.90 a bushel on Friday, set for a bi-weekly gain of over 8%, its largest since May 2023, fueled by President Trump’s decision to pause some of his planned tariff hikes and the USDA tightening of its supply outlook.
• Additionally, a sharply weaker dollar, driven by the escalating trade war between the U.S. and China, provided further support.
• Meanwhile, the USDA adjusted its U.S. corn supply outlook, cutting its estimate for 2024-25 ending stocks to 1.47 billion bushels, down from the previous projection of 1.54 billion and below market expectations.
• Furthermore, heavy rain and flooding in the Ohio Valley and northern Delta have delayed corn planting, while recent showers and more rain forecast in Brazil through April have provided relief to second-corn crop farmers.

Soybean prices above $10 mark

• Soybean futures climbed above $10.40 a bushel, appreciated with a weekly gain +6%, its largest since September 2024, after President Trump decided to pause some of his planned tariff hikes, while the USDA adjusted its supply outlook.
• Meanwhile, the USDA revised its U.S. soybean supply outlook, lowering its 2024-25 ending stocks estimate to 375 million bushels, down from the previous 380 million and below market expectations.
• Furthermore, he European Commission announced tariffs on nearly €21 billion of U.S. products, with soybeans among the top targets.
• With over 40% of U.S. soybean output exported—and China standing as the world’s largest importer—tensions between the two countries remain a key risk factor for the market.