Policy and Trade Shifts

One of the defining themes of the week was the heightened role of government policy in shaping trade flows and commodity demand. In the United States, biofuel regulation came under scrutiny as the White House reviewed an EPA plan that would reallocate only part of the volumes waived for small refiners. This left roughly 550 million gallons of demand at risk, creating pressure on RIN values and injecting fresh uncertainty into ethanol and vegetable oil demand for 2026. The compromise highlighted the persistent tension between the oil industry and the agricultural lobby, a conflict that continues to ripple through corn grind prospects and vegoil balance sheets.

China also featured heavily in trade headlines, taking direct action to address its pork oversupply crisis. Authorities summoned the nation’s largest pig breeders to Beijing to present plans for herd reduction and output cuts. Wholesale pork prices are already down 25% year-on-year, and the policy aims to stabilize margins and contain volatility. For grain markets, the implications are subtle but significant: shifts in protein demand across species will alter the pull on soymeal and feed grains. In parallel, Beijing approved Brazilian sorghum imports, diversifying its feed channels at a time when U.S. sorghum sales to China have collapsed by 97%. Together, these measures show China’s determination to rebalance supply while reducing reliance on U.S. feed imports.

The Black Sea region also remained central to global trade realignments. Russia continued to exert dominance as SovEcon and IKAR raised their 2025/26 wheat crop estimates above 87 MMT, underpinned by record yields in Siberia and the Urals. Export potential was revised toward 44 MMT, reaffirming Russia’s role as the world’s price setter for FOB values. Egypt, the world’s largest wheat importer, reinforced this dynamic by booking 500–600 k t of Black Sea wheat for September–October delivery through its new state agency Mostakbal Misr, locking in supply from Russia, Romania, Bulgaria, and Ukraine. This comes as USDA projects Egypt’s wheat imports at a record 13 MMT, ensuring that Black Sea grain maintains a decisive grip on North African demand.

Futures Market Overview

The futures complex for wheat, corn, and soybeans delivered a week of cautious but eventful trading as markets balanced bearish supply signals against supportive demand indicators. Chicago SRW wheat futures oscillated within a narrow band before closing Thursday at $5.21½ per bushel for the December 2025 contract, recovering from midweek pressure but still weighed down by weak export sales. The Kansas City HRW and Minneapolis spring wheat contracts also showed resilience, but the broader sentiment was capped by expectations of record European production and formidable Russian exports. With the USDA’s September WASDE and Small Grains report approaching, traders largely adopted a wait-and-see approach, aware that new stock and production estimates could reshape the balance sheet heading into Q4.

Corn futures ended the week on firmer ground, with the December 2025 contract closing at $4.19¾ per bushel. Export sales offered modest support, totaling nearly 540,000 MT for the week, while carryover bookings lifted cumulative 2025/26 commitments to 22.6 MMT, the second-largest start on record. Still, the market remains vulnerable to both weather volatility and logistical bottlenecks, particularly as low Mississippi River levels threaten to disrupt barge movements just as harvest activity intensifies. Futures positioning also reflected a buildup ahead of WASDE, with consensus pointing to a slight downward revision in yields toward ~186 bpa and output near 16.5 bbu.

Soybeans showed the most consistent strength across the week. The November 2025 contract climbed to $10.33½ per bushel by Thursday’s close, supported by moderate export sales and expectations of steady crush demand. While cumulative new-crop commitments remain the weakest start since 2009/10 at just 9.35 MMT, traders found some encouragement in stronger soymeal and soyoil markets. Additional upside was tempered, however, by the global supply outlook, with Brazil revising its 2024/25 soybean crop upward to 171.5 MMT and speculation mounting that the 2025/26 crop could stretch to 180 MMT. This reinforced the structural headwind facing U.S. beans as Brazil continues to capture larger shares of Chinese demand.

Black Sea Region Grain Market Development

The Black Sea region continues to play a pivotal role in shaping global grain flows, though recent developments reveal sharp contrasts across crops and geographies. Bulgaria stands out as a case of mounting strain: its corn exports have collapsed nearly fourfold over the past three marketing years, falling from over 1.25 MMT in 2022/23 to just 346 K tons by April 2025. Export revenues shrank even faster, plummeting from €348 million to just €77 million, as weaker international prices compounded the volume losses. The abrupt halt of trade with China—once a key outlet—amplified the pressure, leaving regional neighbors Romania and Greece as main destinations. This collapse has forced Bulgarian farmers to recalibrate farmgate expectations and adjust cash flow strategies, while signaling that competitiveness is increasingly bound to logistics resilience and pricing flexibility.

Sunflower seed exports from Bulgaria tell a more nuanced story. While volumes initially slipped in 2023/24, they rebounded to around 605 K tons in Sep–Apr 2024/25. Yet the uptick in tonnage failed to translate into revenue recovery, with earnings of €436 million still well below the nearly €699 million achieved in 2022/23. Softer international prices eroded margins and highlighted a broader challenge across oilseed markets: volume recovery does not automatically equate to profit restoration. For processors and traders, the lesson has been to pivot from throughput to value capture, emphasizing quality premiums, cost-of-carry optimization, and strategic market timing to sustain profitability in an increasingly margin-thin environment.

Ukraine’s wheat harvest offered stability in aggregate size, reaching 21.9 MMT, nearly unchanged from the prior year thanks to expanded acreage that offset weather damage. However, quality deterioration was evident, with milling wheat dropping to about 45% of total output compared to 50% last year. This shift raises the stakes for domestic millers and exporters alike, creating sharper competition between food- and feed-grade streams. Export opportunities into the EU are capped by a 758 K ton duty-free quota for June–December, which was already 44% utilized by the end of August. With the EU reducing total wheat imports by nearly 40% year-on-year, Ukraine faces an increasingly competitive landscape, forcing it to lean on non-EU routes just as global supply gluts weigh on prices.

Russia, meanwhile, has reasserted its dominance with a heavier-than-expected harvest and aggressive export pace. July shipments reached 1.7 MMT, rebounding to an estimated 3 MMT in August, including sizeable volumes to Egypt. Exceptional yields in Siberia and the Urals have lifted production prospects beyond 87 MMT, positioning Russia as the global price-setter for 12.5% protein wheat. FOB offers for late September to early October slipped to $228–$230/MT—an unusual September downdraft linked to currency weakness and active farmer selling. This competitive pricing continues to pressure U.S. and EU exporters, compressing basis levels and reinforcing the Black Sea’s gravitational pull on global trade flows.

Weather Developments

Weather provided a mixed backdrop to market movements, delivering both relief and fresh risks depending on the region. North America experienced a shift to warmer conditions after early September chills, offering support for corn and soybean harvest pace. Selective rains fell across the Plains and Midwest, which helped late-season crop finishing but raised concerns over uneven soil moisture that could influence yields. The USDA reported that drought coverage had expanded to 13% of U.S. corn and 22% of soybean acreage, a reminder that weather remains a decisive factor for final production numbers.

Europe faced the opposite challenge, with excessive rainfall complicating harvest activity but simultaneously preparing strong seedbeds for winter wheat. Storms in Italy and the Balkans posed risks to late-maturing crops, while steady rain in western Europe improved prospects for planting. In the Black Sea, dry conditions persisted, allowing uninterrupted fieldwork but raising concerns over corn finishing and the establishment of winter wheat stands. This dryness, while positive in the short term for logistics, could become a limiting factor if it extends deeper into the planting window.

Elsewhere, weather trends influenced oilseed markets. Australia benefitted from timely showers in its eastern regions, though frost threats kept wheat yield forecasts precarious. Southeast Asia continued to experience heavy rains, supporting palm and robusta crops, while South America began its planting season under mostly favorable conditions. Brazil’s early soybean planting in the south and improving rainfall in central regions reinforced expectations of another large crop, further cementing its competitive position against U.S. supplies.

Regional and Export Trends

The Black Sea region again dominated global export flows, with Russian FOB values easing to $228–$230/MT for 12.5% protein wheat. This rare September downdraft was linked to currency pressures and aggressive farmer selling, but it underscored Russia’s formidable export capacity heading into Q4. Ukraine, meanwhile, maintained steady wheat volumes near 21.9 MMT, though only 45% classified as milling quality, tightening domestic competition for higher-grade supplies. Access to the EU market remained constrained, with nearly half of Ukraine’s duty-free quota already used by end-August, forcing exporters to seek non-EU outlets in an increasingly crowded market.

South America also offered a mixed picture. Argentina tilted acreage toward corn, with the Buenos Aires Grain Exchange projecting 7.8 M ha planted (+9.6% y/y) and production potentially reaching a record 61 MMT. Soybean area, by contrast, fell to 17.6 M ha, with output pegged at 47 MMT. Brazil raised its official crop outlook to 139.7 MMT for corn and 171.5 MMT for soybeans, while private estimates pushed higher, envisioning as much as 180 MMT soy and 140 MMT corn for 2025/26. Export flows reflected this strength, with September shipments projected at nearly 7 MMT for soybeans, 7 MMT for corn, and 2 MMT for soymeal, underscoring Brazil’s entrenchment as the global swing supplier.

The U.S. export profile showed both progress and limits. Weekly sales for the week ending September 4 stood at 540 k t of corn, 541 k t of soybeans, and just 305 k t of wheat, with carryover bookings keeping corn commitments historically high but soybeans starting at their lowest pace since 2009/10. Logistics remain a key constraint, as Mississippi River grain shipments slipped to just 361 k t amid rising barge rates. With river levels historically low, basis levels are vulnerable to sharp distortions into October, complicating an otherwise constructive export outlook.

Oilseeds and Vegetable Oils

The oilseeds complex reflected the push and pull of regional developments. Canada’s canola stocks plunged to 1.597 MMT by the end of July, more than 50% lower year-on-year, highlighting the tightening supply cushion for crushers and biodiesel producers later in the quarter. This tightening contrasted with heavier Malaysian palm oil inventories, which rose above 2.2 MMT in August. The divergence between canola scarcity and palm abundance is reshaping crush spreads and relative values, feeding directly into soybean and rapeseed pricing dynamics.

Policy signals in Southeast Asia added further complexity. Malaysia’s larger stocks weighed on palm prices, while Indonesia considered advancing its biodiesel mandate from B45 to B50, alongside moves to consolidate seized plantations under a state operator. These measures could reshape Southeast Asia’s supply structure and alter trade flows into the Asia-Pacific, especially as demand growth for biofuels remains robust. The cross-currents underscore why vegetable oil markets continue to inject volatility into the broader oilseed complex, amplifying price sensitivity in soybean and rapeseed futures.

Conclusion

The past week highlighted the interconnectedness of weather, policy, and trade in shaping global grain markets. Russia’s record wheat crop and Egypt’s heavy reliance on Black Sea supply underscored the region’s pricing power, while Europe’s record wheat output added further weight to global supply. At the same time, South America reinforced its role as the world’s swing supplier, with Brazil and Argentina gearing up for massive corn and soybean harvests. China’s adjustments to feed and pork supply illustrated how consumer demand can redirect trade flows, further complicating the balance.

Looking ahead, the focus turns to USDA’s WASDE and Crop Production reports, which will recalibrate yield and stock expectations for U.S. grains. Logistics along the Mississippi River, weather developments in North America and the Black Sea, and ongoing biofuel policy debates will remain pivotal. With record supply in some regions clashing against tightening logistics and shifting demand channels, Q4 is shaping up to be a battleground of price pressure versus localized premiums.