Tariffs and War Risks Stir Grains and Oilseeds Markets
Bertrand Oesterle, Vice President of Clearing and Execution Sales at StoneX, discusses the renewed volatility in global grains and oilseeds markets driven by geopolitical and trade disruptions.
Key Takeaways
US-China trade friction weighs on soybean prices amid tariff uncertainty
Russia-Ukraine conflict resurfaces as a key risk for Black Sea supply chains
Global crop conditions show improvement, but bearish sentiment persists
Trade Tensions and Tariff Risk
Oesterle highlighted the resumption of tariff-driven uncertainty between the US and China. Stalled negotiations and rhetoric from former President Trump have pressured soybean prices, with China appearing in no rush to compromise. “Trump has put some tantrums out again, saying China is not playing the game”. While a potential call between Trump and Xi sparked a brief rebound, ongoing lack of EPA clarity adds to the uncertainty for oilseeds.
Geopolitical Hotspots
The Russia-Ukraine conflict reemerged as a headline risk, especially following renewed Russian strikes and restricted maritime activity near Sevastopol. “It becomes a headline risk in case we get a hit on those two boats”. This tension has exposed short positions in the market, dividing recent and structural bearish participants and prompting some to cover during price bounces.
Crop Fundamentals and Global Supply
Despite geopolitical tension, crop fundamentals remain relatively strong. In the US, ratings for wheat, corn, and soybeans have all improved. Europe and the Black Sea region also show positive planting and yield progress. “If I look at the French crop ratings, that 70% good to excellent—up from 61% the previous year”. Brazil’s second corn crop is being harvested earlier and may yield better than forecast, further easing supply concerns.
Outlook and the WASDE Report
Looking ahead, Oesterle points to key uncertainties for bulls and bears alike. France’s unexpected wheat sale to Egypt raises questions about competitive pressures, while Ukraine’s production and export potential may decline slightly. The upcoming June 12 WASDE report will be pivotal, especially regarding China’s drought-stricken wheat crop. “Some areas have lost 10 to 50% in yields… but the bears are saying nonsense”. The USDA is expected to delay major adjustments until July unless private analyst estimates prompt action sooner.
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---- Expert: Bertrand Oesterle, StoneX VP of Clearing and Execution Sales
Grains & Oilseeds
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