Grain futures woke up during February with soybeans leading the charge thanks to a supportive social media post from President Donald Trump suggesting that China might buy an additional 8 million metric tons of United States soybeans. The result was a nearly $1 a bushel rally for soybean futures.
Also in February, dry weather in the Plains and a growing drought monitor index across key wheat growing areas of the U.S. provided enough incentive for managed money fund traders to exit much of their hefty net short positions in wheat futures. The result was a nearly 70-cent rally for Chicago wheat futures and close to a 50-cent rally for Kansas wheat futures.
Corn futures, not wanting to be left out, also saw modest short covering by fund traders thanks to strong export demand, allowing for a modest 20-cent rally during the month of February.
But what will happen during the month of March? Be ready for more volatility ahead. Here are six important fundamentals to monitor.
From a marketing perspective
First, keep an eye on the various upcoming U.S. Department of Agriculture reports scheduled during March. The month’s World Agricultural Supply and Demand Estimates report was scheduled for release March 10. This report may have some modest tweaks on the demand side for U.S. grains for the 2025-26 crop year, but also will include updates on global production. Traders will be monitoring the updated size of the corn and soybean crop in Brazil and Argentina.
At month’s end there are two important USDA grain reports: The Quarterly Stocks report and the Prospective Plantings report, which are both scheduled for March 31.
Based on information from the USDA Outlook Forum in February, at this time, traders are thinking that U.S. planted corn acres will be down slightly from the 98.8 million acres planted last year, while soybean acres are expected to be slightly larger than the 81.2 million acres planted one year ago. Often, this report can have unexpected surprises in it, so be ready for anything, and potential price gyrations.
The second fundamental to monitor is the value of the U.S. dollar. Over one year ago, in January 2025, the value of the U.S. Dollar Index was trading near 110.00, and has trended lower ever since, now trading near 98.00 as of this writing.
A lower U.S. dollar can help keep U.S. agricultural exports more competitive (due to currency exchange rates). All you need to remember is that when the value of the U.S. dollar is down, currency exchange rates make it cheaper for other countries to import our commodities. A lower dollar has a tendency to increase demand for corn, soybean and wheat exports.
The third item to watch is continued geo-political tensions. How is the conflict with Iran evolving and what has been the effect on crude oil prices? Sometimes, when crude oil futures rally, grain prices rally, too and vice versa.
Don’t forget to also keep watch of the ongoing war in Ukraine and Russia, as that pertains to grain movement throughout the Black Sea Region, and potential wheat snafus either for production or transportation in that region.
At month end, President Trump is scheduled to take a trip to China to discuss trade. If China steps up its current purchases of U.S. soybeans by nearly 8 million metric tons it would be a complete game changer on the demand side of the U.S. balance sheet That could dramatically lower U.S. ending stocks, and ultimately leading to a last-minute competition for planted acres in the United States this spring. Will China buy those beans?
The fourth item on the watch list is to be aware of the seasonal tendencies for corn, wheat and soybeans during the month of March. While past performance is not indicative of future results, there is a strong tendency for a seasonal price pull back lower in early March for corn, soybeans, and wheat that can last into month end. Will that occur this year or not?
No. 5 on the watch list, we need to monitor the fund traders. Who are “the funds”? They are traders who represent the big investment money that trades in commodities. Fund managers watch and monitor grain market fundamentals and technical chart aspects, as they look for opportunities to invest and make money.
When they are long (buyers) in the grain market, prices tend to trade higher, and there are usually underlying friendly fundamental components supporting grain prices, too. When funds are short (sellers) in the market, it is often due to grain supply and demand fundamentals that are shifting to bearish.
The good news is that we can keep an eye on their actions. Every week, the government requires the funds to disclose the number of positions they bought or sold during the week. From there, we can track whether they are amassing a long or short position in the market.
As of the CFTC Feb. 24, report, Managed Money fund traders had exited (bought back) hefty net short positions in corn and wheat futures during the month February and were transitioning to a mostly “neutral” position instead for corn and wheat.
On Feb. 24, they were short 13,867 contracts of corn, short 17,297 contracts of Chicago wheat, and long 4,204 contracts of Kansas City Wheat. Be aware, they had amassed a large net long position in soybeans, long 184,202 contracts.
Finally, keep an eye on the weather. From the growing drought conditions in the U.S. Plains and Midwest, to the potential heat wave headed for India during March (India is the world’s third largest grower of wheat), and of course weather in Argentina and Brazil. The second crop corn in Brazil will begin pollinating in very late March and early April, and traders will be monitoring that closely.
Prepare yourself…
The market will have multiple pieces of news to monitor in the coming weeks. How will trade respond to the new conflict in the Middle East and the ongoing conflict in Ukraine and Russia?
Which way will the pieces of news ultimately fall and tip the price scale? Will prices rise higher due to China buying an additional 8 million metric tons of soybeans? Or might there be a friendly surprise coming out of USDA information or upcoming trade deals?
Or will a snafu in global economics, trade negotiations, or global geo-politics spook prices lower?
My advice—make a strategy that allows your farm to be prepared for either scenario. Don’t wait and see. Be ready to act on opportunity.
If you have questions, you can reach Naomi at [email protected] or find her on X (formerly twitter) @naomiblohm.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Carefully consider whether such trading is suitable for you in light of your financial condition. Examples of seasonal price moves or extreme market conditions are not meant to imply that such moves or conditions are common occurrences or likely to occur. Futures prices have already factored in the seasonal aspects of supply and demand. Total Farm Marketing refers to Stewart-Peterson Group Inc., Stewart-Peterson Inc., and SP Risk Services LLC. Stewart-Peterson Group Inc. is registered with the Commodity Futures Trading Commission (CFTC) as an introducing broker and is a member of National Futures Association. Stewart-Peterson Inc. is a publishing company. SP Risk Services LLC is an insurance agency and an equal opportunity provider. A customer may have relationships with any of the three companies.
