The soy market witnessed a significant surge following the temporary exemption of Mexican goods from steep tariffs by U.S. President Donald Trump. This move not only impacted wheat but also boosted corn and soybean futures on the Chicago Board of Trade (CBOT). The decision to exempt Mexico from tariffs alleviated concerns about potential trade disruptions, particularly in the wheat sector, as Mexico stands as the largest buyer of U.S. wheat.

Earlier in the week, fears of trade disruptions had led to a decline in CBOT wheat futures to life-of-contract lows. However, the market sentiment shifted positively as CBOT wheat futures, including soft red winter wheat and hard red winter wheat, experienced notable gains. The tariff exemption for Mexico, effective until April 2, brought relief to the agricultural commodities market.

In addition to the tariff developments, the fluctuation in the dollar index (DXY) contributed to the bullish momentum in grains. The weakening of the dollar theoretically makes U.S. products more appealing to international buyers, further supporting the demand for wheat, corn, and soybeans.

Moreover, the U.S. Department of Agriculture reported export sales of old-crop wheat, aligning with trade expectations. Meanwhile, China anticipates a bountiful wheat harvest due to favorable weather conditions, potentially reducing the need for wheat imports as domestic supplies are projected to increase.

The overall market response to the tariff exemption for Mexico reflected a positive outlook for the soy market, indicating a potential increase in demand for U.S. agricultural products. The interconnectedness of global trade dynamics, currency fluctuations, and domestic agricultural conditions underscores the complex factors influencing commodity markets.

Looking ahead, the expiration of the tariff exemption on April 2 will be a critical point to monitor for market participants. The impact of this development on wheat, corn, and soybean prices, as well as the broader implications for international trade relations, will continue to shape the dynamics of the soy market in the coming weeks.