Policy and Trade: Black Sea Wheat, US–China Thaw and Biofuel Signals

One of the week’s most notable policy-trade developments was Turkey’s return to Russian wheat. The state grain board TMO booked 300,000 tonnes of Russian wheat on a C&F basis, its first such purchase since February 2023, after two bumper domestic harvests had previously allowed Ankara to step back from imports. Turkey’s own crop has fallen from a record 21 MMT in 2023/24 to 17.9 MMT in 2025/26, reopening import needs just as Russia has increased its floating wheat export duty.

At the same time, China has now authorized imports of Russian wheat bran, reinforcing the Black Sea’s pivotal role in global milling wheat pricing and by-product flows.

US–China agricultural trade also moved back into the spotlight. Early in the week, shipping schedules showed three vessels heading to Gulf Coast terminals to load the first US soybean and sorghum cargoes for China since May, following an autumn thaw in trade relations and commitments by Beijing to buy 12 MMT of US soybeans through January.

Later comments from US Agriculture Secretary Brooke Rollins reinforced expectations of both a near-term farmer aid package and a formalized agreement on Chinese soybean purchases, with China having already booked nearly 1.6 MMT of soybeans over three days – its largest single-week tally in two years.

At the same time, China’s role on the veg-oil side grew sharper. Domestic soybean oil gluts, linked to heavy soybean imports and still-soft local demand, have pushed Chinese soyoil exports to India to record levels. October shipments reached almost 71,000 tons – most of it to India – and exports in the first ten months of the year neared 329,000 tons, almost triple the total for 2024.

Discounts versus South American oils and shorter voyage times to India are cementing this emerging trade route in the world’s largest soybean oil import market.

In South America, Brazil sent an important signal on energy and biofuel policy. The government indicated that issues around US biofuel imports were “practically resolved,” after adjustments to the RenovaBio program allowed foreign exporters to obtain certification directly rather than via Brazilian intermediaries. This levels the playing field for US ethanol and biodiesel suppliers at a time when Brazil is using biofuels to underpin its decarbonization strategy.

Policy and trade also intersected in Asia’s palm oil complex. Indonesia’s expectation of a more than $50/t cut in December export tax prompted sellers to defer roughly 310,000 tonnes of palm oil shipments from November to December, an unusually large shift designed to capture better net returns and potentially support Bursa Malaysia palm oil futures after recent four-month lows.

Meanwhile, Malaysia reported nearly a 29% year-on-year drop in palm oil exports to China in the first ten months of 2025, underscoring tougher competition from other oils and highlighting how Chinese demand is being met increasingly through alternative origins and products such as soyoil.

Global Supply Trends: Big Crops and Shifting Balances

On the supply side, the week brought a series of hefty crop estimates that continue to weigh on medium-term price expectations, particularly for wheat and soybeans. In India, the farm ministry’s first advance estimates point to a 2025/26 monsoon-sown food grain crop of 173.3 MMT, up 3.87 MMT from a year earlier, including 124.5 MMT of rice and 41.4 MMT of coarse cereals, with corn alone at 28.3 MMT, 3.5 MMT above last year. Oilseeds output is projected at 27.56 MMT, including 14.27 MMT of soybeans and 11.1 MMT of peanuts.

In the Southern Hemisphere, LSEG analysis raised Argentina’s 2025/26 wheat production by 8% to about 21.0 MMT, citing better-than-expected late-season weather and strong soil moisture, although harvest has been slowed by excessive rains in parts of the Pampas. National harvest progress is a little behind last year, but drier conditions forecast for the coming week should help the combines catch up.

Australia’s wheat outlook was also revised higher. Late-season satellite imagery and weather data support a 2.3% upward revision to 35.6 MMT, with healthy vegetation across most growing regions and largely near-normal to slightly cooler temperatures, combined with limited rainfall that has allowed harvest to proceed steadily. Forward forecasts suggest near-normal weather through December, creating a favourable backdrop for completing the campaign.

For soybeans, the Brazilian juggernaut remains central. LSEG’s mid-week update kept 2025/26 Brazilian soybean production at around 178.3 MMT, above the USDA’s 175 MMT, with slightly larger area and yields in its models.

By later in the week, consultancy Agroconsult’s first field-based estimate closely echoed that view, projecting 178.1 MMT with planted area up 2.1% to 48.8 million hectares and around 85% of the crop already sown. A portion of that crop should be ready for export as early as January, with soybean exports expected to reach roughly 109.1 MMT this year and rise to about 112 MMT next year, further strengthening Brazil’s role as China’s primary soy supplier.

Brazil’s near-term export program is also robust: ANEC data showed expected November shipments of about 4.40 MMT of soybeans, 2.50 MMT of soymeal and 6.11 MMT of corn, only slightly below earlier weekly estimates but still significant volumes into the world market.

In the Black Sea, Ukraine’s 2025 grain harvest is now forecast to reach at least 60 MMT, up from 56 MMT last year, with an additional 19–20 MMT of oilseeds, further underpinning the region’s importance for both grain and oilseed export flows.

Winter crop establishment is also progressing well: sowing of 2026 winter crops was reported at 98.1% of intended area, with favourable November weather improving soil moisture and supporting late-planted wheat, barley and rapeseed.

At the same time, Russian farmers are selling grain at record speed as financial pressures and export restrictions squeeze margins. Grain sales reached 11 MMT in September and remained very high in October, contributing to downward pressure on domestic prices and, by extension, on export offers.

This aggressive selling adds another layer of competition in export markets even as Russia manages duties and quotas.

Weather and Crop Conditions: From South American Dryness to US Winter Storms

Weather headlines this week highlight a delicate balance between still-favourable soil moisture in some regions and mounting dryness or storm risks in others.

In South America, both 24 and 28 November updates emphasized a slow shift toward drier conditions in Argentina and southern Brazil, while central and northern Brazil remained relatively wet. Forecasts call for below-normal rainfall into early December for many Brazilian regions, even as soil moisture remains generally good for now.

LSEG’s soybean update noted declining soil moisture in parts of southern Mato Grosso and central Goiás, along with excessive rain in Paraná over the past month – a combination that warrants close monitoring as the main growing season develops.

By contrast, the Argentinian Pampas, though still enjoying high soil moisture, is entering a drier pattern, with only sporadic fronts bringing scattered showers. Without significant heat, stress should be limited in the short term, but the trend points to potential weather deterioration if dryness persists into the pollination and grain-fill windows for corn and soybeans.

A separate forecast specifically flagged a coming wet spell that could even bring localized flooding and affect mature wheat, adding a different kind of risk for final yields and quality.

Brazilian planting progress for 2025/26 soybeans is fast but somewhat uneven. AgRural estimated national planting at 81% of area by 20 November, slightly behind last year but ahead of the five-year average, with irregular rainfall in Mato Grosso and Goiás slowing work and raising concerns about yield potential. Summer corn planting in the Center-South reached 93%, just shy of last year’s pace.

CONAB data cited by LSEG put soybean planting at 78% by 22 November, again slightly behind last year but above the recent average, and ENSO guidance points to a high probability of La Niña, implying wetter-than-normal conditions in northern Brazil and greater dryness risk in the south later in the season.

North American weather turned decisively wintry. A series of systems brought heavy snow, strong winds and sharp temperature drops across the Northern Plains and Midwest, with several forecasts warning that blizzard conditions and a “burst of arctic air” would effectively end remaining fieldwork and push winter wheat into dormancy.

Further storms through late November and early December are expected to keep temperatures below to well below normal across large portions of the Corn Belt and Plains, while also boosting Mississippi River levels enough to modestly improve barge logistics out of the Delta.

In Europe, widespread showers and recent cool conditions have placed much of the continent in relatively good shape heading into winter, though earlier reports from MARS highlighted sowing delays in parts of Italy, Hungary, Romania and Bulgaria due to either dry or excessively wet soils.

Looking ahead, the cold spell is expected to ease, with milder conditions forecast for early December, reducing immediate frost risks but slowing the onset of full winter dormancy for some crops.

The Black Sea region remains a key weather watchpoint. Systems have recently improved precipitation in parts of Ukraine and northwestern Russia, but soil moisture deficits persist in southwestern Russia, and forecasts call for abnormally warm and increasingly dry conditions across much of the region over the next 10–15 days.

That combination of dry soils and delayed hardening increases longer-term yield risk for winter wheat if true cold arrives abruptly later in the season.

Demand, Logistics and Macro Drivers

On the demand side, US export flows remain a mixed picture. Weekly inspections to 20 November showed corn at about 1.63 MMT, above last year but below the previous week, soybeans at 799,000 tonnes, less than half the volume seen a year earlier for the same week, and wheat at 475,000 tonnes, up from both the previous week and the prior year.

The composition by destination highlights Bangladesh as a key buyer of US soybeans and Mexico as the leading destination for corn, while the Philippines led in wheat.

Chinese buying patterns remain central. Beyond the new US soybean cargoes and resurgent sorghum imports, China continues to source heavily from Brazil, even as it temporarily suspended imports from five Brazilian plants following contamination concerns. That disruption is limited relative to the more than 2,000 Brazilian entities registered to export to China, so flows can be rerouted, but it underscores how quickly Chinese quality controls can redirect trade between origins and impact crush margins and basis levels.

In the veg-oil complex, Indonesian and Malaysian palm dynamics, together with Chinese soyoil exports, are increasingly important for pricing relationships between palm, soyoil and sunflower oil. The deferral of Indonesian shipments into December to benefit from lower export taxes, coupled with reduced Malaysian palm shipments to China and surging Chinese soyoil exports to India, is reshaping flows and potentially altering relative value across edible oils, with knock-on effects on soybean crush decisions worldwide.

Macro-level US data added further nuance. DOE statistics showed ethanol stocks down 1.5% to about 21.97 million barrels with plant output at 1.113 million bpd, near record levels, underscoring robust corn demand from the biofuel sector despite weaker export sales.

At the same time, corn used for ethanol in August was reported 3.4% lower year-on-year, revealing how high-frequency weekly strength sits within a broader trend of slightly softer annual usage.

Outside grains, Tyson Foods’ decision to close a major beef plant in Nebraska and cut operations in Texas highlighted the impact of tight US cattle supplies on the broader protein complex, with knock-on implications for feed demand and consumer meat prices.

While not a direct grain market driver this week, it reinforces the idea that livestock sectors are adjusting to high input costs and constrained supplies, which may influence feed grain demand trajectories going into 2026.

Outlook: Key Themes to Watch

Looking ahead into early December, several themes stand out for traders and physical market participants:

Weather-wise, the gradual drying trend in Argentina and southern Brazil, combined with emerging La Niña patterns, will be crucial for yield expectations in corn and soybeans, while potential flooding episodes in the Argentine Pampas could still damage mature wheat. In the Northern Hemisphere, persistent arctic outbreaks and snowstorms in the US, plus warm and dry conditions in parts of the Black Sea region, will shape winter wheat condition ratings and spring 2026 yield potential.

On the trade and policy front, markets will watch how quickly Turkey’s renewed wheat imports translate into additional Black Sea tenders, how US–China negotiations solidify into firm soybean and other grain orders, and whether Brazil’s biofuel policy adjustments unlock more US ethanol flows.

Finally, the balance between heavy global harvests – India’s larger food grain output, record South American wheat and soybean crops, strong Ukrainian and Russian export potential – and localized logistical or quality constraints, such as Ukrainian corn export bottlenecks or contamination-driven suspensions in Brazilian soy, will determine whether the modest firmness seen at the end of November can extend into a more sustained price recovery, or whether surpluses will continue to cap rallies into the new year.