Grains & Sugar Weekly 03/07/2025

Corn

Corn futures hit new lows early in the week before midweek profit-taking triggered a sharp rebound, reclaiming over 50% of the decline. Trade relations and tariff concerns pressured the market, forcing large speculative longs to liquidate positions. The ongoing trade dispute with China, Canada, and Mexico added uncertainty to supply and demand projections.

South American exports are poised to increase. Brazil and Argentina continue harvesting and marketing exports, diverting demand away from the U.S. Higher domestic stocks could weigh on prices, especially with the USDA projecting an increase in U.S. corn acreage for the upcoming planting season. If weather conditions remain neutral, a strong crop could replenish already comfortable supply levels.

The market remains highly sensitive to White House policy updates and retaliatory trade actions. Additionally, the market will keep an eye on South American weather and the safrinha crop progress.

Key Levels: Resistance spans $4.70–$5.00. Support ranges from $4.45–$4.00.

Soybeans

Soybean futures extended their gradual decline as Brazil’s harvest progressed and South American weather improved. The combination of abundant supply, ongoing trade tensions, and slowing U.S. export demand pressured prices.

Early in the week, soybeans followed broader grain weakness, breaking lower before stabilizing and correcting higher. Uncertainty around U.S.-China trade negotiations remains a key driver, with any new developments capable of injecting volatility into the market. With trade relations strained, importers continue shifting purchases to South America, where harvest is 50% complete.

Next week’s USDA report is expected to show minor reductions in U.S. and Argentine stocks, while world and Brazilian production estimates may edge higher. With global supplies ample and demand softening in the U.S., upside potential appears capped.

Key Levels: Resistance spans $10.40–$11.00. Support ranges from $10.00–$9.50.

Wheat

Wheat futures collapsed in late February, shedding nearly a dollar from recent highs before bouncing back. The market faced intense pressure from trade tensions, rising global production estimates, and improved crop conditions across key exporters. Australian wheat production surged 31% year-over-year, French wheat ratings improved, and U.S. winter wheat conditions strengthened—all contributing to bearish sentiment.

Despite these pressures, wheat rebounded sharply this week, driven by short-covering and renewed global demand. The fallout from the war in Ukraine is having an impact on Russian wheat markets. Russia will export less wheat in an effort to keep a lid on domestic prices, while production is also taking a hit. Private analysts cut Russia’s production estimates to 79 MMT, below USDA forecasts.

U.S. wheat sales remained solid, but questions remain about whether the U.S. can capitalize on shifting global demand.

The upcoming USDA report is expected to show U.S. and global stocks holding steady or increasing slightly. Wheat is likely to remain range-bound, with volatility driven by trade developments and global supply shifts

Key Levels: Resistance spans $5.75–$6.00. Support ranges from $5.25–$5.00.

Sugar

Sugar futures have followed broader commodity weakness, retreating sharply after testing resistance near $0.2000. Prices fell over 200 points in less than a week as trade concerns and tariff-related uncertainty sapped momentum.

Bearish fundamentals compounded the decline. Private estimates raised Brazilian production expectations, while slower global demand weighed on prices. However, by late week, sugar stabilized, reclaiming key technical levels. Futures closed in the green on Friday, holding near the 50% Fibonacci retracement, a level that could serve as a temporary floor.

Supply risks remain in play. The International Sugar Organization (ISO) revised its global production estimate lower, widening the expected sugar deficit. A weaker U.S. dollar provided additional late-week support. Traders remain cautious, with short-term bears booking profits while awaiting fresh catalysts.

Key Levels: Resistance spans $0.1875–$0.2000. Support ranges from $0.1775–$0.1700.