Grain and oilseed markets impacted by US tariffs: Grain market daily

• UK feed wheat futures (May-25) ended yesterday at £188.60/t, up £0.10/t from Friday’s close. The Nov-25 contract gained £1.05/t over the same period, to close at £194.70/t
• The main factor influencing grain prices was the changing situation around US import tariffs on goods from Mexico, Canada and China. Markets initially traded lower yesterday, following Saturday’s announcement (more in yesterday’s Market report). However, the market rallied after news that the introduction of tariffs on goods from Mexico and Canada had been paused. Chicago maize futures (May-25) gained 1.4%, while Paris wheat futures (May-25) gained 1.5%
• May-25 Paris rapeseed futures closed at €519.00/t yesterday, up €3.50/t from Friday’s close
• Chicago soya bean futures (May-25) were up 1.4% from Friday’s close yesterday. The postponement of some of the US import tariffs and concerns about dry weather risks in Argentina supported soya bean futures yesterday

Sign up to receive the Weekly Market Report and Grain Market Daily from AHDB.

On Saturday (1 February), President Trump moved ahead with his tariff plan, imposing 25% tariffs on imports from Mexico and Canada, and 10% on China. The tariffs are being implemented due to trade surpluses, as these countries sell more to the US than what they import from the US.

Uncertainty about impact of the tariffs and potential retaliatory measures put pressure on prices on Friday, with Chicago wheat, maize and soya bean futures (May-25) dropping by 1.2%, 1.7% and 0.2%, respectively, from the previous day.

Yesterday (3 February), it was announced that the implementation of tariffs on Mexico and Canada would be postponed for 30 days, following agreements with the respective countries. We saw initial reaction to this development in prices yesterday, as noted in the market commentary above.

However, a deal has not been reached with China and, from 3 February, a tariff of 10% on Chinese imports into the US came into effect. China has subsequently imposed a few different tariffs on American products.

Why does this matter?

Mexico is the largest importer of US maize, purchasing over 30% of US maize annually, while China is the top buyer of US soya beans, accounting for 53% of US exports on average over the past five seasons (USDA). Meanwhile, Canada dominates global rapeseed production and trade. The country is forecast to account for 43% of global exports in 2024/25 season, along with 53% of rapeseed oil and 60% of rapeseed meal trade (USDA). The US imports 96% of Canada's rapeseed oil and 66% of its rapeseed meal (Jan–Nov 2024, Canola Council of Canada).

The global commodity markets are interconnected and if trade barriers rise in some areas, products may shift to other markets. However, these products could need to be at lower prices to reflect the different shipping costs, or demand may shift to other commodities. The potential impacts are amplified given the large volumes of grain and oilseed involved, with a particular risk to rapeseed, with implications for the UK. For example, if the tariffs put pressure on prices, such as for Canadian rapeseed (canola), this could put pressure on domestic prices.

Wider implications

There are also wider implications. Tariffs are inflationary and can slow global economic growth. AHDB’s Jess Corsair explores this in more detail here. While there are no direct changes to trade with the UK from these announcements, the knock-on effects will still impact the global economy.

It will be important to continue monitoring the markets as the situation develops to understand both the short- and longer-term impacts. If prices do decline in response to the tariffs and changes in trade flows, it could also change cropping plans for harvest 2025/26.

Sign up to receive the latest information from AHDB.

While AHDB seeks to ensure that the information contained on this webpage is accurate at the time of publication, no warranty is given in respect of the information and data provided. You are responsible for how you use the information. To the maximum extent permitted by law, AHDB accepts no liability for loss, damage or injury howsoever caused or suffered (including that caused by negligence) directly or indirectly in relation to the information or data provided in this publication.

All intellectual property rights in the information and data on this webpage belong to or are licensed by AHDB. You are authorised to use such information for your internal business purposes only and you must not provide this information to any other third parties, including further publication of the information, or for commercial gain in any way whatsoever without the prior written permission of AHDB for each third party disclosure, publication or commercial arrangement. For more information, please see our Terms of Use and Privacy Notice or contact the Director of Corporate Affairs at info@ahdb.org.uk  © Agriculture and Horticulture Development Board. All rights reserved.