Agricultural futures, including grain and oilseed contracts, experienced a slight decline on Friday as market participants paused to assess demand following a recent rally. The earlier surge in prices was triggered by the US government’s decision to postpone the implementation of tariffs on Canadian and Mexico imports.
Wheat futures for March delivery saw a decrease of up to 1.2%, reaching $5.8075 per bushel, after hitting a high not seen since October earlier in the session. Despite the Friday dip, the contract was still positioned for a substantial weekly gain of approximately 4%. Corn and soybean futures followed a similar downward trend.
Adam Knosalla, a broker at Frontier Futures in Minneapolis, commented on the market dynamics, stating, “It feels like we need to take a little bit of a breather.” He noted that the recent price rally prompted increased wheat sales by farmers in both Canada and the US. However, Knosalla suggested that wheat futures could continue their upward trajectory, potentially testing the 200-day moving average.
Following the significant market volatility spurred by President Trump’s tariff threats, new information remained scarce. Statistics Canada reported a modest 0.9% year-over-year increase in total wheat supplies as of the end of 2024. Had the proposed tariffs on Canadian goods been enacted, these supplies could have been potentially disrupted.
Market participants are now anticipating the US Department of Agriculture’s monthly crops report, scheduled for release on Tuesday, for further insights into supply and demand dynamics.
This temporary pause in the agricultural markets highlights the sensitivity of commodity prices to geopolitical developments and trade policies. The upcoming USDA report will likely play a crucial role in shaping the next phase of market movement, providing critical data on crop conditions and projected yields.
