Grain market moves after Trump statement on China

The May wheat contract on the Matif closed €1,25 lower yesterday at €194,25 per ton. On the CBoT, wheat moved up a notch and closed 1 cents higher at $5.93¾ per bushel. Corn was on a stronger upward trend during the past trading session, gaining 8 cents to $4.51¼ per bushel. Soybeans closed 9 cents higher at $11.67 per bushel.

US President Donald Trump sparked some optimism in the soybean market with a message on his own social media channel, Truth Social. According to Trump, China is very happy that he is getting the Strait of Hormuz reopened. According to the American president, China has pledged not to supply weapons to Iran in return. Trump is counting on a "big fat hug" from Chinese leader Xi when they meet in a few weeks.

This fuels the idea that China might well import substantial volumes of soybeans from the US in the near future. However, there are several analysts who question this. Brazil has had a good harvest and is, moreover, cheaper than the US for soybeans. It is not reasonably logical for there to be another buying spree from China for old-crop US soybeans.

More soybeans harvested in Brazil
Conab is raising its forecast for the Brazilian soybean harvest from 177,85 million tons to 179,15 million tons, according to the institute, which falls under the Brazilian Ministry of Agriculture. This is very close to the Bloomberg poll, in which analysts were counting on a harvest estimate of 179 tons. Conab is raising its corn forecast by 1,3 million tons to 139,6 million tons.

China does not only import soybeans from the American continent. The Russian news agency Interfax reports that Russia exported 120.000 tons of soybeans to China in March. That is the largest monthly export since December 2023, writes Interfax. Compared to the total volume of 4 million tons of soybeans that China imported in March according to Chinese customs, Russia's share is insignificant.

The Russian Ministry of Agriculture reports that winter crops in Russia are looking good. 97% of the crops are looking 'good and satisfactory', news agency Tass quotes Russian Minister of Agriculture Oksana Lut.

There is a start in Ukraine
Meanwhile, a good start has been made in Ukraine with the sowing of summer crops. 17% of the planned area for summer cereals and legumes has been sown, reports UkrAgroConsult, based on figures from the Ukrainian Ministry of Economy. With 128.500 hectares, 69% of the planned area has been planted. Ukrainian farmers are furthest advanced with peas, of which 209.800 hectares, or 76% of the planned area, have been sown. Only a start has been made with maize; only 100 hectares have been sown so far.

The market is pricing in the prospect of peace in the Middle East to a greater extent. Oil is naturally the first area where this is noticeable. However, according to various analysts, this is also the case with wheat. In addition, various sources mention the relatively favorable growing season in Europe so far. Of course, there are some problems with drought, particularly in Eastern Europe, and waterlogging in the Southwest, but overall, wheat is performing quite well in the EU.

Dry start
In Australia, the new growing season for winter cereals is off to a less favorable start. Some rain has fallen in the north and the far south of the country, but it is dry in the majority of the country. This is favorable for the progress of winter wheat and rapeseed sowing, but absolutely not for the early development of the crops. Couple that with high fuel and fertilizer prices and the possible development of an El Niño (the weather phenomenon that typically means drought in Australia), and farmers could well sow less than expected, according to various local sources.