The wheat market is taking a beating.

The May wheat contract on the Matif closed €4,75 lower yesterday at €197,75 per ton. The first new crop contract on the Paris exchange also closed €4,75 lower during the last trading session, but with a close of €207, it remains above €200 per ton. On the CBoT, wheat lost 17 cents, or 3%, bringing it to $5.80 per bushel. Maize held up better and closed 1 cents lower at $4.47 per bushel. Soybeans, in contrast to cereals, closed in the green with a gain of 3 cents to $11.62 per bushel.

The ceasefire between the United States and Iran is not going unnoticed in the grain market either. Crude oil saw a significant price correction, and the war premium on wheat is also being reduced. Nevertheless, considerable uncertainty remains regarding free passage through the Strait of Hormuz. Moreover, according to some experts, it is not yet certain whether the ceasefire will hold. The next steps following this fourteen-day truce also remain a mystery. The US 15-point plan and Iran's 10-point plan are not aligned, to put it mildly.

Meanwhile, Trump is threatening to impose a 50% import tariff on goods from countries supplying weapons to Iran. "A country that supplies military weapons to Iran will be immediately subjected to a 50% import tariff on all goods sold to the United States of America, effective immediately. There will be no exceptions or exemptions!" writes Trump on his platform Truth Social.

China and Russia are among the countries supplying weapons to Iran. This could become interesting in light of Trump's scheduled visit to China. Some analysts fear that this will not be favorable for American soybean growers due to exports to China.

Fertilizer market remains tight
The Middle East is an important region for fertilizer production. Fertilizer production and transport have not immediately resumed now that military activities have been scaled back. Meanwhile, tension on the fertilizer market is being further heightened by Russia, which announced the suspension of exports of ammonium nitrate (calcium ammonium nitrate). Expensive fertilizer combined with low grain prices does not encourage arable farmers to aim for maximum yield.

The fact that the grain market is on a downward trend is also partly due to the weather forecasts for the US. Rain is predicted for the prairies in the middle of the country this coming weekend, which will alleviate the worst of the drought. The western part of the prairies, however, will receive little to no rain according to the weather models. That is roughly a third of the Wheat Belt. So, it still concerns a significant acreage.

Wasde-report
Meanwhile, traders are already anticipating the USDA WASDE report, which will be published later this evening, Dutch time. A Reuters poll indicates that traders and analysts do not expect major shifts in the WASDE for the corn and soybean harvest in Argentina. Corn yields in South American countries could well be slightly increased, while for soybeans in Brazil, a small downward correction is expected.