Global Supply and Policy Outlook

The most significant policy development of the week was the suspension of USDA reporting due to a federal government shutdown. Both the World Agricultural Supply and Demand Estimates (WASDE) and the weekly export-sales reports were halted, leaving markets without their usual benchmarks for global supply-and-demand balances. This “data blackout” magnified reliance on private forecasts, trade flows, and weather models, raising the risk of sharper volatility once official data resumes.

At the global level, the UN Food and Agriculture Organization (FAO) revised its grain outlook higher, projecting world production at a record 2.97 billion tons, up 10.1 million from its prior estimate. The agency lifted wheat output on stronger crops in Canada and Russia, while maize production gained from upward revisions in the United States and China. Global wheat inventories are forecast at 320.3 million tons, reinforcing the perception of ample supply, while rice stocks also saw an upgrade. The world stock-to-use ratio at 30.6% indicates that, despite regional weather challenges, supplies remain comfortable heading into 2025/26.

Black Sea dynamics continued to shape trade flows. Ukraine increased its winter wheat sowing projection by 8% to 5.2 million hectares, reallocating land away from drought-stricken corn and sunflower. This structural expansion signals stronger export potential in the coming years, provided logistics remain intact. At the same time, Russia sought to deepen its agricultural ties with China, lobbying to lift restrictions on wheat and barley exports and pushing for access for biofuel pellets — a move that could expand Moscow’s share in the Asian market.

In Europe, Poland’s wheat harvest was revised higher to 13.4 million tons, reinforcing regional competitiveness. Meanwhile, the European Commission published updated trade data showing that EU wheat exports remain robust but face stiff rivalry from Black Sea origins.

Trade policy tensions remained a central risk factor. U.S.–China relations are once again under scrutiny, with Treasury Secretary Scott Bessent warning about China’s use of soybeans as leverage in broader negotiations. Former President Donald Trump underscored soybeans as a centerpiece of the upcoming summit with Xi Jinping in late October. The lack of new Chinese purchases of U.S. soybeans from the current harvest has reinforced market concerns about U.S. export demand, especially given Beijing’s continued preference for Brazilian origin.

Other global policy and trade developments also influenced sentiment. India, the world’s top rice exporter, maintained restrictions on rice shipments, keeping upward pressure on Asian rice prices and indirectly supporting wheat and corn demand in key importing nations. Indonesia projected palm oil exports at 30 million tons for 2025, supported by rising Indian demand, adding another layer of competition in global vegetable oil and protein markets.

Collectively, these developments underscore that while global supply potential is strong, the grain market remains highly sensitive to policy shifts, trade restrictions, and geopolitical negotiations. Ample production may cap prices in the medium term, but policy-driven demand swings and regional export competition are expected to keep volatility elevated.

Futures and Price Movements

Futures markets reflected the uncertain backdrop of absent USDA data and shifting private forecasts.

• Wheat: Chicago soft red wheat (Dec ’25) closed the week at $5.14¾/bu, recovering 5½¢ on Thursday after steady losses earlier in the week. Kansas City HRW added 3–4¢, and Minneapolis spring wheat firmed by a similar margin. Support came from a fresh Saudi tender for 420,000 tons of hard wheat, which injected demand optimism despite otherwise sluggish U.S. export activity. Over the week, however, wheat contracts still ended 6–8¢ lower, weighed down by strong global supply prospects and Ukraine’s expanded acreage outlook.
• Corn: December ’25 corn ended the week at $4.21¾/bu, up 5¼¢ on Thursday but down 1¼¢ across the week. Despite supportive private forecasts trimming U.S. yields, the market faced headwinds from softer ethanol demand and delayed export sales reporting. The price action reflected a delicate balance between domestic processing demand, global competition, and weather risks in both the U.S. and South America.
• Soybeans: November ’25 soybeans settled at $10.23¾/bu, gaining 10¾¢ on Thursday and 7¼¢ across the week. Soymeal rose by $4.80, while soyoil added 0.06¢, with the latter up a striking 25.2% year-to-date. The soy complex was buoyed by U.S. biodiesel demand, resilient meal consumption, and private forecasts showing strong yields but not enough to offset concerns about shrinking U.S. export prospects. Futures reflected both underlying demand strength and continued geopolitical uncertainty tied to Chinese buying patterns.

In terms of year-to-date performance, soybeans are up 2.3%, soymeal 9.3%, while cereals like wheat and corn remain significantly weaker, illustrating the divergence in fundamentals across the grain complex.

U.S. and South American Dynamics

With USDA data absent, private forecasters played an outsized role. StoneX cut its U.S. corn yield estimate to 185.9 bushels per acre (bpa) while raising soybean yields to 53.9 bpa. S&P Global went further, lowering corn to 185.5 bpa and soybeans to 53.0 bpa, placing corn production at 16.707 billion bushels and soybeans at 4.261 billion bushels. These estimates highlighted the scale of expected U.S. harvests, but also reinforced concerns about export competitiveness given sluggish overseas demand.

In South America, the outlook was more nuanced. Argentina reported near-record wheat yields supported by abundant rainfall, with the harvest pegged at 22 million tons. Corn planting progress reached 19.8% of projected 7.8 million hectares, with production expected at a record 58 million tons for 2025/26. This represents an 8.4% year-on-year increase, driven by higher profitability, the government’s permanent cut to export taxes (corn lowered to 9.5%), and improved management of leafhopper-borne spiroplasma. In contrast, Argentina’s soybean production was forecast at 47.4 million tons, lower due to acreage shifts in favor of corn and the looming risk of a La Niña weather pattern during the key December–February growing window.

Brazil’s soybean planting advanced to 4.16% of area by late September, the fastest pace on record. However, this progress masks regional disparities, as central Brazil remains too dry for reliable germination while southern states benefit from timely rains. If mid-October rains fail to materialize in central regions, replanting could be necessary, increasing costs and tightening supply expectations.

Weather Impacts Across Key Regions

Weather played an outsized role in shaping expectations during the week.

In the United States, the Northern Plains saw light showers, supporting late wheat establishment, while the Midwest and Delta faced warm, dry conditions. These aided fieldwork but posed risks to river logistics as water levels along the Mississippi system declined again. Any further disruptions to barge traffic could delay exports and push more grain to rail and truck transport, raising costs.

Europe experienced widespread storm systems, particularly in central and western regions, which replenished soil moisture but also raised concerns about planting delays. Spain remained a notable outlier, where drought continues to stress crop potential. Ukraine benefited from timely rainfall, improving conditions for expanded winter wheat sowing, while southwestern Russia remained dry, posing risks to establishment.

Australia continued to suffer under a prolonged dry pattern, threatening wheat and canola yields during critical reproductive stages. Forecasts call for below-average rainfall in key producing regions, sustaining fears of production cuts.

In China, harvest weather in the northeast remained favorable, though colder temperatures slowed progress. Central regions received showers that improved conditions for winter wheat and canola planting, ensuring decent establishment.

Vegetable Oil Market Developments

Vegetable oil markets also saw notable developments. Malaysian palm oil stockpiles, which reached a 20-month high in August, are now expected to ease due to stronger exports and reduced production. September exports rose 8.3% to 1.43 million tons, the highest since November, while production fell 4.3%, lending fundamental support to palm oil prices despite subdued Indian festival demand.

Indonesia projected palm oil exports of 30 million tons for 2025, supported by India’s demand and broader resilience in Asia’s consumption.

Meanwhile, China restructured its oilseed-meal sourcing. After imposing a 100% tariff on Canadian rapeseed meal and oil, Chinese buyers turned to India, purchasing 52,000 tons in just three weeks, four times the total 2024 imports from that origin. This pivot is reshaping regional trade flows and exerting downward pressure on soymeal and sunflower-meal premiums across Asia, with potential knock-on effects for South American exporters.

Outlook

The past week encapsulated the interplay of abundant supply prospects, weather volatility, and geopolitical risk. Global production forecasts point to record harvests, but the USDA data blackout left traders dependent on less consistent indicators, sharpening volatility around private revisions and physical flows.

South America is emerging as a central driver: Argentina’s corn crop is thriving, while soybean acreage contracts; Brazil’s record-fast soybean planting pace is at risk if dryness persists in central areas. Europe and the Black Sea are set to remain highly competitive in wheat exports, bolstered by increased sowing in Ukraine and stronger harvests in Poland.

Vegetable oils added another layer of complexity, with palm oil buoyed by falling production and stronger exports, while China’s pivot in oilseed-meal sourcing reshaped Asian protein markets.

Looking ahead, market participants will monitor whether mid-October rains materialize in central Brazil, whether U.S. logistics constraints worsen along the Mississippi, and whether geopolitical developments in U.S.–China talks trigger renewed soybean buying. Until USDA reporting resumes, volatility is likely to persist, with private estimates and weather models remaining the key drivers of sentiment.