Wheat Markets React to Argentina’s Export Tax Cut Amid Geopolitical and Weather Uncertainty
On Thursday, wheat markets at Euronext and CBoT showed mixed trends before prices fell significantly on Friday morning. The sharp declines were triggered by Argentina’s announcement to reduce wheat export taxes from 12% to 9.5%, making Argentine wheat more competitive in global markets.
Euronext: Modest Gains on Thursday
- The next maturity for March 2025 gained +0.25 EUR to close at 230.25 EUR/t.
- The price movement at Euronext was limited due to a lack of fresh market drivers.
CBoT: Significant Declines in Electronic Trading
On Thursday, the March contract at CBoT closed unchanged at 554 ct/bu, with deferred contracts showing slight declines. By Friday morning, losses accelerated:
| Contract | Last Price (US-Cent/bu) | Change (US-Cent) | Change (%) |
|---|---|---|---|
| March 2025 | 539.00 | -5.00 | -0.92% |
| May 2025 | 553.50 | -5.25 | -0.94% |
| July 2025 | 565.50 | -4.50 | -0.79% |
| September 2025 | 579.50 | -4.50 | -0.77% |
| December 2025 | 598.00 | -4.75 | -0.79% |
The stronger declines on Friday are directly linked to Argentina’s tax reform, which makes its wheat exports more attractive. The USDA forecasts Argentine wheat exports at 11.5 million tons for the 2024/25 season, positioning the country as the world’s seventh-largest wheat exporter.
Market Drivers
- US Weather Conditions: The recent cold wave may have caused damage to winter wheat crops, as many fields lacked protective snow cover.
- Russian Exports: Russian wheat remains competitively priced at $233–238 USD/t FOB for 12.5% protein and $228–230 USD/t FOB for 11.5% protein. This pricing remains significantly below levels in Germany and Baltic ports.
- Geopolitical Factors: The trade policy of new US President Trump adds uncertainty. Further sanctions on Russia, if they affect agricultural exports, could have a bullish impact on the market.
US Export Data
The USDA export figures are expected later on Friday. Traders estimate:
- 2024/25 season: 200,000 to 600,000 tons.
- 2025/26 season: 0 to 50,000 tons.
So far, exports for the 2024/25 season total 13.01 million tons, representing a +25% increase compared to the same period last year.
Summary and Outlook
- Euronext: Modest gains reflect a calm market, though export prospects could be impacted by Argentina’s tax reduction.
- CBoT: Price declines highlight the immediate reaction to Argentina’s move, while geopolitical and weather-related uncertainties continue to loom.
Outlook: Market participants will closely watch developments in Argentina, the impact of the cold wave in the US, and geopolitical tensions. Export data from the US and Russia will likely provide further direction for short-term price movements.
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