Wheat prices surge after Trump postpones tariffs on Canada and Mexico

After several days of negotiations, President Trump has delayed the imposition of tariffs under the USMCA trade agreement with Mexico and Canada for another month. And Canada has postponed the imposition of tariffs on $125 billion in American goods until April 2.

Mr. “Chaos,” as President Trump has now been dubbed, continues his erratic trade policies, which are adding to the turbulence in stock markets. The U.S. stock market has lost about $3.6 trillion in market capitalization in recent weeks.

March wheat futures in Chicago fell 8.6% for the week, but recovered 3.2% over the past two sessions. Overall, March wheat futures fell 8.4-10.9% for the month.

March wheat futures rose yesterday:

• by 3.6% to $197.3/t – for soft winter SRW wheat in Chicago (-8.4% per month),
• by 3.3% to $202.6/t – for durum winter HRW wheat in Kansas City (-9.8%),
• by 2.6% to $212.8/t – for durum spring HRS wheat in Minneapolis (-8.3%),
• by 2% to €211.25/t or $228.1/t – for wheat on the Paris Euronext (-10.9%).

It is worth noting that May wheat futures are trading $5-11/t higher amid uncertainty about the harvest in Ukraine and the Russian Federation, as well as expectations of a settlement of the US trade wars with its neighbors.

Dry weather in Ukraine and the southwest of the Russian Federation is worsening the yield potential of winter crops.
Under the pressure of falling demand and stock market quotes, export demand prices for Ukrainian wheat with delivery to Black Sea ports decreased by $3-5/t during the week:

• for food – up to $224-228/t or 10600-10800 UAH/t,
• for feed – up to $220-222/t or 10,400-10,450 UAH/t.

The increase in prices for Black Sea wheat in January-February led to a sharp decrease in the pace of exports from Ukraine and the Russian Federation. In February, Ukraine exported 1.08 million tons of wheat (2.28 million tons in February 2023), and in total in the 2024/25 MY (as of March 5), exports amounted to 12.16 million tons (12.38 million tons last year on this date).

According to Rusagrotrans, Russia exported 1.95 million tons in February, the lowest level in the last 5 years. In March, it plans to export 1.5 million tons of wheat, as the volume of applications in deep-water ports is less than 1 million tons. Rusagrotrans has lowered its forecast for wheat exports from Russia in the 2024/25 MY from 42 to 40.5 million tons, while the USDA estimates it at 45.5 million tons.

Wheat exports from the United States in January decreased by 9.4% compared to December to 1.313 million tons, which is the lowest monthly figure since 1972 and 20.53% lower than exports in January 2024.

In the MY 2024/25 (as of March 4), EU countries reduced wheat exports by 36% compared to the previous season to 14.697 million tons. The largest wheat exporters to the EU were Romania (3.9786 million tons of soft wheat and 113.3 thousand tons of durum wheat) and Lithuania (2.0147 million tons).

The main buyers of European soft wheat this season were Nigeria (2.0704 million tonnes), Morocco (1.5964 million tonnes), the United Kingdom (1.018 million tonnes), Algeria (1 million tonnes) and Egypt (882.4 thousand tonnes), while durum wheat was purchased by Tunisia (181 thousand tonnes) and Algeria (113 thousand tonnes).

Tags: prices, wheat