Weather risks and trade concerns drive volatility in the US grain market.

The Chicago Board of Trade (CBOT) grain markets displayed mixed movements on Tuesday, influenced by weather risks and international trade tensions. Wheat and corn rebounded slightly due to weather changes and a weaker dollar, while soybeans, despite minor gains, remained near their yearly lows as the market continued to feel pressure from worries over global trade tensions.

Wheat: Weather premiums and fund positions mutually reinforced. Despite better than expected quality of U.S. winter wheat, it has declined compared to last year, along with ongoing drought in the southern plains, prompting a wheat price rebound. Fund positions indicate commodity funds increased their long positions in wheat, reflecting market concern over production risks. The weakening U.S. Dollar Index also indirectly boosted the export competitiveness of U.S. wheat. Technically, after breaking the key resistance level of $5.40 per bushel, prices may test the upper range limit of $5.60 per bushel.

Corn: Planting delays and short covering by funds fueled price increases. Flooding in the Ohio and lower Mississippi River Valleys delayed corn planting progress, while rainfall in Brazil's second-crop corn regions alleviated some yield concerns, shifting market focus to U.S. supply. Fund positions showed significant short covering, leading to price increases. In the spot market, although export demand was affected by trade concerns, blocked river transportation in the Midwest could exacerbate short-term supply shortages. If planting delays persist, $4.70 per bushel could become the next target level.

Soybeans: Trade uncertainties loom, while soybean meal stands relatively independent. Soybean futures, although recovering slightly, stay close to annual lows, with global trade policy uncertainties—especially major importers potentially adjusting their purchasing sources—pressuring U.S. soybean prices. Fund positions show bearish sentiment remains strong. The spot market is mixed; despite a slight increase in the Gulf's soybean FOB export premiums, the barge basis remains weak. By contrast, soybean meal has gained favor from funds due to improved crushing margins and tightened supply.

Soybean Oil: Biofuel demand doubts exacerbate sell-offs. Soybean oil has become a focused short-sell commodity, despite some rebound in crude oil prices, with uncertainties surrounding U.S. domestic biofuel policy and the soybean meal-soybean oil price spread limiting its recovery potential. Technically, soybean oil has fallen below key moving average support, which could lead to continued weak fluctuations in the short term.

Future Outlook: In the short term, weather factors will continue to dominate wheat and corn prices; should drought or flooding persist, funds may continue to increase long positions. For soybeans, attention should be paid to the impact of trade policy on actual exports, with the $9.50 per bushel level possibly becoming a test point. In the medium term, planting progress and South American logistics will be crucial for corn and soybean pricing, while soybean meal may face restocking scenarios due to increased crushing volumes. Concurrently, the impact of international trade tensions on market sentiment remains a concern.

The market carries risks, and investment should be cautious. This article does not constitute personal investment advice and has not taken into account individual users' specific investment goals, financial situations, or needs. Users should consider whether any opinions, viewpoints, or conclusions in this article are suitable for their particular circumstances. Investing based on this is at one's own responsibility.

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