After an initial “violent” reaction, the U.S. wheat market has proven mostly indifferent to President Donald Trump’s April 2 tariff announcement, wheat market analysts say.

Wheat got caught up in the sell-off scene across all market sectors, but tariffs aren’t expected to affect supply and demand, said Darin Newsom, market analyst in Omaha, Neb.

“When you put tariffs and start trade wars presumably with basically every country in the world, theoretically it would hurt demand, but there’s not very strong demand for U.S. wheat right now anyway,” Newsom said. “Out of all the markets in the grains sector, wheat probably came across the least impacted.”

Overnight markets responded “pretty violently,” with wheat off nearly 20 cents and corn off 15 cents, but by the morning, wheat was down 1.5 cents and corn was up 1 cent, said Dan Steiner. Steiner retired from Morrow County Grain Growers in 2023 and now works as an analyst in Boardman, Ore.

“Not much of a response,” Steiner said. “When uncertainty is there, then people will overreact. Really, to me, it’s not that big of a deal. There’s going to be some corrections, some adjustments going through … I don’t think it really changes that much.”

Wheat and corn futures had “more or less” recovered, agreed Byron Behne, senior marketing manager at Northwest Grain Growers in Walla Walla, Wash,, pointing to decreased value of the U.S. dollar.

“That’s good for exports, I guess, but it remains to be seen as to whether any of these countries we sell wheat to — which, most of the countries on the list, certainly all of the Asian countries, are major soft white buyers, so we’ll have to see what they respond with and whether or not agriculture’s going to be affected by that,” Behne said.

The cash market also appears unchanged, Behne said. “Everybody’s kind of waiting for the next shoe to drop,” he said.

Cold front

The wheat market has gone back to trading based on weather, Newsom said.

“There is a cold front supposed to move through for the winter wheat growing areas, bringing a little bit of buying into the markets,” he said.

With large wheat supplies, Newsom doesn’t see much upside for wheat prices. Any rallies will be short-lived and come from the non-commercial side, such as investment traders, hedge funds and speculators.

More worrisome

A larger concern is the U.S. Trade Representative’s Section 301 proposal to impose fees  on Chinese-built ships, which could begin in mid-April, Behne said.

“If that happens, that’s a big deal,” he said. “That’s hurting us right now; exporters can’t get freight quotes for June-forward business, or if they can, it’s really expensive.That’s what I’m worried about, more than what just went down with the stuff (April 2).”

More than 80% of wheat gets exported in the Pacific Northwest, he noted.

As proposed, the fees potentially add 50 cents per bushel to costs, Behne said.

Volatility

“Volatility is exploding” in the overall U.S. stock market, investments and value of the U.S. dollar, Newsom said.

“What happens when there is a great deal of uncertainty is volatility goes up,” he said. “We have nothing but uncertainty right now. You never know what the next thing is going to be … It just means all bets are off, all the time, and wise investors are simply going over to treasuries, which, while wilder than usual, are still relatively calm.”

Newsom doesn’t see longer-term impacts for wheat from the tariffs, compared to effects for soybean, cotton and other commodities.

“The U.S. just simply took itself out of the game,” he said. “Many of the world’s largest buyers won’t buy from the United States. Russia and Ukraine are still shipping everywhere. The reality is what the reality has been for quite a while: Whatever demand is, the U.S. has plenty of supplies and it’s just not going to change.“

Steiner “without a doubt” believes Trump’s tariffs are a positive move.

Trump has already said that he’s going to protect the U.S. agriculture sector, likely through something similar to the Marketing Assistance Program, which paid farmers about 60 cents per bushel for wheat to keep them whole in the midst of trade disputes with China, he said.

“He kept the farmers whole and I expect the same thing’s going to happen again this time,” Steiner said. “All farmers ever wanted was a level playing field. I don’t see this as a bad thing, I don’t see this as a disaster.”