Farmers Are Holding Back Wheat and Markets Are on Edge
Bertrand Oesterle, VP of Clearing and Execution Sales at StoneX, analyzes the latest forces shaping global grain and oilseed markets in a period of high volatility.
Key Takeaways
Tariff deals and weather events are driving major shifts in grain markets
Farmers are holding wheat back as quality concerns and logistics persist
Corn and soy market strength may weigh on any wheat rally
Tariff Deals and Global Market Shifts
Recent tariff deals led by the US have created volatility across grains and oilseeds. “We've had the EU, US and the US, South Korea today, US, Japan for example”, Oesterle noted. These deals, alongside ongoing negotiations with countries like China, Australia and Bangladesh, are reshaping export flows and price dynamics. As agreements emerge, market sentiment is shifting from chaos to renewed optimism for wheat, particularly in Europe.
European Wheat and Farmer Behavior
Wheat prices are responding to both macro moves and local farmer strategies. Oesterle highlighted that “farmers in Bulgaria and Romania, despite having some very good crops, are playing the selling retention game”. Delays in Russian exports, heavy rains across Northern Europe, and concerns over harvest quality are adding to market uncertainty. French wheat, with a completed and high-quality harvest, is gaining focus as potential supply issues in Germany and Poland persist.
Headwinds from Corn and Soy Markets
While wheat shows rally potential, strong corn and soy markets could temper gains. US corn conditions remain “73% good to excellent”, and South American producers are increasing exports. “The crop conditions are still very good in the US for soybean. The 70% excellent they've regained 3% from the previous week”, Oesterle explained. Large inventories and improving yields in corn and soy may dampen bullish wheat sentiment.
Additional Oilseed and Regional Developments
Rapeseed harvest delays in Europe and surprising trends in Chinese soybean oil exports are adding complexity. “China has become a short term exporter of soybean oil...India buying 150,000 tonnes of soybean oil from China, which is again an oddity”. Meanwhile, policy signals from China about feed rations add further uncertainty, leaving the global oilseed outlook finely balanced.
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---- Expert: Bertrand Oesterle, StoneX VP of Clearing and Execution Sales
Grains & Oilseeds
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