Trump declares glyphosate a national concern

The March wheat contract on the Matif rose €3 yesterday to €193,75 per tonne. On the CBoT, wheat rose 12 cents, or 2,3%, to $5.59 per bushel. That's the highest closing price since June. Corn took a step back, closing 1 cents lower at $4.25 per bushel. Soybeans, however, were in the green, rising 7 cents to $11.14 per bushel.

The European wheat market is lagging behind the American market somewhat, while plenty is happening on our continent as well. Cold weather is returning to Ukraine and Russia after a somewhat milder period. In places where the snow has melted and where water is present, winter wheat is particularly susceptible to frost damage, according to various local sources. The weather premium for wheat is therefore being increased slightly.

Threatening language
Geopolitical tensions are also fodder for the bulls In the market. Peace negotiations between Russia and Ukraine in Geneva, Switzerland, broke down earlier this week. Russian and Ukrainian negotiators did agree that these are difficult negotiations. The lack of an agreement is not surprising. In the Middle East, the relationship between the US and Iran is attracting attention. Iran held an annual military exercise with Russia yesterday. Earlier this week, Iran also fired live ammunition during an exercise in the Strait of Hormuz.

Meanwhile, a second US aircraft carrier is en route to the Middle East. Trump is thus further increasing pressure on Iran to reach an agreement on its nuclear program. Trump believes "10 to 15 days is sufficient time" to reach a deal with Iran, according to the Associated Press. If Iran doesn't agree, the US president believes "bad things" await the country.

National interest
Trump also made a somewhat remarkable decision domestically. The US president has designated glyphosate and phosphorus as critical to national security under the Defense Production Act. This means that US producers who comply with national guidelines enjoy legal advantages. However, if necessary, the USDA can take over production and distribution. According to Trump, phosphorus and glyphosate products are essential, not only for agriculture but also from a military perspective. A looming shortage of phosphorus or glyphosate, the president argues, makes the US vulnerable.

Bayer is the only producer of glyphosate in the US. In addition, significant volumes of glyphosate are imported from China for use in US agriculture. The Wall Street Journal estimated last year that approximately 40% of global glyphosate production came from Bayer's US facilities. The fertilizer companies Mosaic and Nutrien together hold the vast majority of the agricultural phosphorus market.

Bigger shift
Yesterday, the USDA released its first acreage forecast for the 2026 harvest year. The shift from corn to soybeans is slightly larger than predicted in the Bloomberg poll. Bloomberg anticipated 3,8 million additional acres of soybeans at the expense of corn compared to last season. The USDA projected 4,8 million fewer acres of corn and 4,8 million more acres of corn. Wheat acreage is 300.000 acres smaller than for the 2025 harvest year, totaling 45 million acres.

Traders' reaction to the CBoT may not have been entirely as expected, judging by the USDA figures. Some analysts attribute the rise in soybean prices largely to the expectation (or perhaps hope) that China will continue to buy significant amounts of American soybeans in the coming weeks.

Wheat gained some extra momentum due to the drought in the US. Of the winter wheat acreage in the US, 46% is in a drought region. That's 1% more than last week and the highest percentage of wheat affected by drought in 52 weeks.