Policy Developments and Trade Dynamics

Geopolitics and trade policy dominated market sentiment throughout the week. The centerpiece was the renewed focus on U.S.–China relations. Early in the week, Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng agreed to hold talks in Malaysia to head off tariff escalations, while President Trump confirmed he will meet President Xi at the APEC summit next Thursday. This announcement injected a “risk-on” mood across global commodities, as markets speculated on potential de-escalation of tariffs, reopening of soybean trade channels, and possible relief for U.S. exporters who have struggled with shrinking market share in China. However, uncertainty remains, as new U.S. tariffs are scheduled to take effect on November 1 if no deal is reached, keeping trade flows vulnerable to sudden shifts.

The European Union moved forward with its deforestation law, granting companies only six months to comply with traceability requirements covering imports of soy, beef, palm oil, and other commodities linked to deforestation. This legislation is set to reshape trade flows into the bloc, potentially sidelining suppliers unable to meet sustainability standards, while favoring those with robust certification systems. For exporters in South America, particularly Brazil, this policy presents both challenges and opportunities in aligning with EU demands.

In Southeast Asia, Indonesia announced that its planned B50 biodiesel mandate would be delayed from 2026 to 2027. Funding difficulties and cost constraints forced the postponement, but the news had immediate repercussions, supporting palm oil futures near MYR 4,300–4,500/ton and tightening vegetable oil spreads. Given the close correlation between palm oil and soybean oil pricing, this development added bullish sentiment to the oilseed complex.

In Brazil, uncertainty over biodiesel blending also resurfaced. Officials admitted that the scheduled increase in the blending mandate from 15% to 16% in March 2026 may not be feasible. A delay here could cap expected soybean oil demand growth, reducing domestic crush incentives and shifting trade flows.

Argentina’s agricultural and protein sectors remained fluid. The Buenos Aires Grain Exchange reported ongoing restructuring in the soy-crushing industry, as Vicentin’s cramdown process advanced with cooperative support for a joint venture involving LDC and Molinos. At the same time, the U.S. announced it would quadruple Argentina’s beef TRQ to 80,000 tons, signaling greater access for Argentine beef into the U.S. market. While not directly grain-related, this policy may subtly influence feed demand and trade balances in South America.

The U.S. Congress also played a role in shaping sentiment. A bipartisan group of lawmakers urged the Treasury to finalize rules for the 45Z clean fuel production credit, a policy seen as crucial for accelerating investment in renewable fuels. A clearer framework would likely expand industrial demand for corn and soybeans, reinforcing their role as biofuel feedstocks.

China’s shifting trade patterns provided another highlight. September soybean imports from the U.S. fell to zero for the first time in seven years, while Brazil captured 85% of Chinese soybean imports. Argentina also increased its share, reflecting China’s diversification efforts amid geopolitical tensions. Yet, on a year-to-date basis, U.S. shipments were still up around 15%, showing how front-loaded demand earlier in the year has partially offset recent declines.

Together, these policy and trade dynamics underscored the interconnectedness of agricultural markets with global politics, environmental regulation, and energy policy. While some signals pointed toward easing tensions and new demand drivers, others highlighted structural challenges and shifting competitive landscapes that will continue to shape grain flows into 2026.

Futures Price Performance: Wheat, Corn, and Soybeans

Wheat futures traded in a volatile but generally firmer pattern over the week. Early sessions reflected pressure from ample supply forecasts, but by Thursday, Chicago December 2025 wheat closed at $5.13/bu, up more than 9¢ on the day. Kansas City and Minneapolis contracts followed suit, supported by stronger commodity sentiment, rising crude oil prices, and speculative buying. Despite this rebound, the IGC revised its global wheat production for 2025/26 upwards to 827 MMT, with ending stocks at 275 MMT, underlining an abundant global supply backdrop. France’s sowing of soft wheat accelerated sharply to 57% complete, while in Turkey, projections for wheat harvest were cut by 13.9% to 17.9 MMT, reflecting localized weather stress. Russia’s confirmation of 93.5 MMT wheat within a record 135 MMT grain harvest underscored global competition pressures that continue to weigh on export opportunities from Europe and the U.S.

Corn futures saw modest gains midweek, lifted by spillover strength from wheat and soybeans and resilience in the energy sector. Chicago December 2025 corn settled Thursday at $4.28/bu, up 5¢ on the day, although Friday’s early session opened slightly lower at $4.26/bu. Open interest expanded, suggesting new speculative longs entered the market. The IGC left global production unchanged month-on-month but increased ending stocks to 299 MMT, largely due to higher carry-in supplies. U.S. fundamentals offered some support: ethanol stocks fell 3.1% to 21.919M bbl, with daily production steady at 1.112M bpd, signaling ongoing industrial demand. In Europe, France’s corn harvest surged to 75% complete, well above the five-year average, though crop ratings slipped to 59% good-to-excellent, down from 75% a year earlier, tempering optimism.

Soybean futures posted the strongest performance among the grains this week. Chicago November 2025 closed Thursday at $10.44¾/bu, rising 10¢ on the day, before easing slightly in Friday’s early trade to $10.43¼/bu. Gains were fueled by higher soymeal and soyoil prices alongside surging crude oil, with option expiry adding to trading activity. The IGC trimmed global soybean production to 428 MMT and reduced ending stocks to 79 MMT, tightening the balance sheet. Planting progress in Brazil provided another key storyline: AgRural reported that by October 16, 24% of soybean planting was complete, a sharp rise from 14% the previous week and only 10% at the same time last year. Favorable rains in Mato Grosso accelerated seeding, while Argentina maintained good moisture conditions, allowing early corn planting to progress to 33.8%. These developments highlight South America’s pivotal role in shaping near-term global oilseed supply.

Black Sea Region Weekly Movements

The Black Sea grain market closed the week with a markedly different dynamic compared to its start, as trade flows adjusted, processors in the EU’s eastern frontier grappled with limited raw material supplies, and forecasts shifted toward a wetter pattern in Ukraine and southwestern Russia. These developments have reshaped near-term expectations for crop balances, basis levels, and regional freight, setting the tone for upcoming weeks.

Romania’s role as a conduit for Ukrainian oilseeds has been one of the most notable stories. While official statistics suggested a record season for soybean imports, much of this volume only transited through the Port of Constanța en route to third markets. Domestic availability, therefore, remains limited, and Romania’s crush capacity continues to be underutilized. Meanwhile, brisk sunflower seed exports—particularly to Turkey—have kept flows active, though forward margins look vulnerable unless sunflower oil prices rise significantly into the winter months.

In Bulgaria, the oilseed sector is under greater stress. Processors face acute seed shortages following successive droughts, leaving crushing plants idle despite the country’s large installed capacity. Industry discussions now focus on restricting raw-seed exports in favor of refined products and meal, a move aimed at protecting domestic processing and sustaining employment. With sunflower sowings at record highs but yields cut by drought to the lowest in a decade, the imbalance between capacity and crop has left the Bulgarian sector in a defensive stance.

Weather has emerged as a key pillar shaping short-term risks. Incoming rains in Ukraine and southwestern Russia are expected to improve soil moisture and support winter wheat establishment, though late-seeded acres still require a mild November to develop adequately. At the same time, drier breaks accelerated oilseed harvesting in Ukraine, but high grain moisture continues to delay corn progress. Beyond the Black Sea, favorable planting conditions in South America and wetter trends in Europe are influencing the broader balance, helping to limit upside risk from regional weather volatility.

Overall, the Black Sea market is navigating a delicate transition from concerns about supply availability to execution risks tied to weather, logistics, and policy. Whether rainfall verifies across Ukraine and Russia, whether Bulgaria enforces measures to retain seeds domestically, and whether Ukrainian processors shift toward keeping more margin in-country will be decisive in shaping basis, freight dynamics, and spreads into November. The region remains a central driver of volatility, with markets finely tuned to these unfolding developments.

Weather and Regional Crop Conditions

Weather developments across major grain-producing regions were critical drivers this week. In the U.S., October brought a mix of heavy rainfall in parts of the Midwest and improving soil moisture across the Plains. While precipitation supported winter wheat establishment, it also created harvest delays for corn and soybeans, with frost pockets adding to concerns. The Mississippi River remained at historically low levels, though rainfall modestly improved water levels, offering temporary relief for barge logistics.

In South America, conditions were mixed but generally favorable. Brazil received widespread rains, which boosted soil moisture and accelerated soybean planting in Mato Grosso and Goiás. After the rains, a drier window allowed uninterrupted planting progress, with forecasts indicating renewed showers into November. Argentina benefitted from recent rainfall in the Pampas, bolstering both wheat and early corn conditions. However, forecasts pointed to fewer fronts moving through in late October, creating some uncertainty.

Europe also witnessed rapid shifts. In France, dry conditions allowed a strong pace of corn harvest and wheat sowing, but crop quality metrics continued to show stress. The Czech Republic raised its grain production forecast to 7.66 MMT, up nearly 10% from July, suggesting more comfortable regional balances. By contrast, the Black Sea region, particularly southwestern Russia, still faced dryness, though incoming precipitation could partially alleviate moisture deficits.

Australia continued to see mixed conditions. Analysts lifted wheat production estimates to 35.7 MMT, making this year’s crop the third-largest on record, yet storm systems in eastern regions raised concerns about potential quality damage.

Global Supply and Demand Outlook

The IGC’s October update marked one of the most influential developments this week, raising total grain stocks for 2025/26 to 618 MMT, the highest in three years. Wheat stocks rose to 275 MMT (+5), corn stocks increased to 299 MMT (+5), while soybeans tightened to 79 MMT (-4). These adjustments highlight a diverging global outlook: cereals remain well-supplied, but oilseeds face tightening fundamentals.

China’s import patterns reinforced these shifts. In September, the country reported zero soybean imports from the U.S. for the first time in seven years, relying heavily on Brazil, which captured 85% of import share, and Argentina. Despite this, year-to-date U.S. shipments still showed a 15% increase, reflecting timing differences in purchasing. Meanwhile, U.S. weekly export sales data were delayed indefinitely by the government shutdown, leaving the market dependent on surveys: corn 0.8–1.6 MMT, soybeans 0.7–2.0 MMT. This lack of hard data heightened market sensitivity to rumors and outside influences.

 Conclusion

This week’s grain markets reflected a delicate balance between optimism and caution. The confirmation of a Trump–Xi meeting set a constructive tone, while the IGC’s upward revision of global cereal stocks underscored supply comfort in wheat and corn. In contrast, soybeans benefited from tightening balances, stronger product demand, and rapid South American planting. Weather trends across the U.S., South America, Europe, and Australia added further nuance, shaping short-term expectations for both yields and logistics.

As the market transitions into November, attention will remain firmly fixed on U.S.–China trade developments, South American weather, and logistical constraints in the U.S. river system. These factors, together with policy shifts in biofuels and sustainability regulations, will determine whether the “risk-on” sentiment of late October carries momentum into the final quarter of 2025.