March’s cropping market update

Highlights for cropping

• The latest wave of U.S. tariffs has sparked swift retaliation, driving global grain market uncertainty to new heights. Commodity markets faced pressure before the tariff announcements. Recently, the sell-off has sped up. Wheat futures dropped 13 per cent in just a few weeks. Corn futures have tumbled 9.5 per cent from their February 19 peak. Soybean futures have dropped 6.7 per cent since early February. However, markets saw some stabilization as President Trump announced a temporary exemption for Canadian and Mexican imports. In the next few months, expect ongoing volatility. Weather and geopolitical issues will add to this complexity.
• China’s imposition of a 15 per cent tariff on U.S wheat, corn and barley should be broadly supportive of Australian wheat and barley markets. However, optimism is dampened by demand forecasts. They show that China’s total grain imports, for wheat, corn, sorghum, and barley, will drop by 45 percent from last year. Short to medium-term fundamentals remain supportive for Australian barley and canola.
• Looking ahead, Australia faces a big challenge from global disruption and the economic slowdown in China, our biggest trading partner. If U.S. tariffs on China lead to a wider economic downturn, it will create a global shock that will impact Australia too.

Rod Baker

Agricultural Analyst

Rod is our Insights specialist for the cropping industry, combining a diverse agricultural background with an Environmental Science degree to deliver expert commentary on commodity markets and trends.