Policy and Trade Developments

Russia remained the centerpiece of global grain policy headlines. Moscow’s floating “damper” reduced the wheat export duty by roughly 20% for October 8–14, with corn lowered and barley set at zero. This move reinforced the region’s abundant export potential, as nearly 130 million tons of grain were already harvested against a 135 million ton target. Yet beyond the near-term glut, Russian officials indicated that wheat planting area for 2025 could shrink by more than 6% as farmers pivot toward oilseeds, signaling that future supply might tighten if prices fail to incentivize cereals.

Argentina reshaped global expectations with a stronger production outlook. The Rosario Board raised its 2025/26 wheat forecast to 23 million tons from 20, equaling the country’s historical high. Corn output is pegged at a record 61 million tons and soybeans at 47 million tons, reinforcing the Southern Cone’s growing role as an export powerhouse. Planting progress added to the optimism, with corn already at 28% of intended area and soybeans set to begin in the second half of October. Such figures put pressure on U.S. exporters and frame Argentina as a key competitor heading into Q4.

In the United States, trade disputes and political gridlock defined the policy backdrop. The federal shutdown temporarily halted USDA’s weekly export-sales reports, leaving markets reliant on private surveys. Meanwhile, Washington prepared a new farmer aid package estimated at up to $15 billion, designed to compensate growers struggling with lost Chinese demand and oversupply. The absence of China from the U.S. soybean balance sheet remained a glaring vulnerability, forcing U.S. officials to court smaller importers in Africa and Southeast Asia. Still, purchases from Nigeria, Vietnam, and Bangladesh could not offset Beijing’s retreat.

China itself continued to recalibrate its import strategy. The October CASDE report trimmed corn import projections to 6 million tons while maintaining steady domestic production estimates. This not only signaled stronger self-reliance but also dampened demand expectations for U.S. and South American exporters. At the same time, Chinese officials acknowledged harvest disruptions from heavy rainfall in Henan, while other key areas in the northeast reported broadly supportive conditions.

Brazil consolidated its dominance in global grain flows. September soybean exports surged 20% year-on-year, while corn shipments reached 7.56 million tons. For October, ANEC projected soy exports at 7.12 million tons and corn at 6 million tons, alongside nearly 2 million tons of soymeal. This aggressive export pace underscored Brazil’s competitiveness and limited the window for U.S. cargoes in world trade.

Policy developments in biofuels added further complexity to oilseed markets. Indonesia confirmed its B50 biodiesel program for H2 2026, requiring an estimated 5.3 million additional tons of crude palm oil annually, tightening future palm availability. Brazil, however, suggested a delay in raising its biodiesel blend from B15 to B16 in 2026 due to insufficient study, which would temper soybean oil consumption in the medium term. Argentina added to the policy noise by raising minimum prices for both bioethanol and biodiesel, supporting feedstock demand but raising concerns for refiners facing higher costs.

In Asia, food security policies reshaped flows of rice and feedgrains. India reported a 5.9% rise in monsoon rice acreage and a 10.7% increase in corn planting, bolstering domestic supply security even as New Delhi extended its export bans. The Philippines prolonged its rice import ban through 2025, a move that kept rice values high across Southeast Asia and promoted substitution into wheat and corn in local rations.

Finally, Ukraine worked to unclog its oilseed export channels. Kyiv authorized duty-free shipments of rapeseed and soybeans produced domestically, easing confusion around new levies that had previously slowed trade. Despite this measure, Ukraine’s cumulative grain and legume exports since July 1 fell 39% year-on-year to 7.2 million tons, with corn exports especially soft. This underscored the structural pressures on Black Sea flows amid logistical and policy hurdles.

Price Action

Price dynamics mirrored these fundamental shifts.

• Wheat: Chicago SRW December 2025 contracts hovered near $5.06½/bu, with early-week softness tied to EU shipment delays, Black Sea competition, and mixed U.S. weather forecasts. Minneapolis spring wheat continued to slightly outperform, though HRW tracked the weaker tone. Australian weather concerns added underlying support.
• Corn: December 2025 corn traded near $4.18¼/bu, pressured by a strong U.S. harvest pace and Brazil’s aggressive export line-up. Modestly weaker Chinese corn-import expectations also weighed on sentiment, while supportive ethanol production data offered some relief.
• Soybeans: November 2025 soybeans settled at $10.22¼/bu, fluctuating with South American rainfall prospects and vegoil volatility. Soymeal softened while soyoil oscillated in response to palm oil stocks and biodiesel news. September MPOB data showing Malaysian palm oil stocks up 7.2% to 2.36 million tons (a near two-year high) capped immediate bullishness despite longer-term biodiesel demand growth in Indonesia.

For the week, wheat posted net losses across major U.S. exchanges, corn was marginally higher, and soybeans extended gains supported by strong planting pace in Brazil and potential Chinese buying speculation. Year-to-date, soybeans remained one of the few bright spots in the complex, up 2%, while wheat and corn remained 7–12% lower, reflecting ongoing global abundance.

Weather and Crop Conditions

Weather patterns played an equally crucial role in shaping sentiment. In South America, Brazil entered a pivotal stretch. Central Brazil, including Mato Grosso, awaited the onset of steady rains to stabilize early soybean stands after two weeks of dryness. By October 2, soybean planting was already 9% complete nationally—second-fastest on record—and Mato Grosso alone reported 15% completion, well above historical averages. Heavy rains in southern states such as Rio Grande do Sul both aided wheat development and slowed corn seeding, but overall progress remained solid. Argentina meanwhile enjoyed favorable soil moisture for early corn planting, though the Pampas showed drier outlooks heading deeper into October. Analysts continue to flag La Niña risks that could tilt conditions hotter and drier later in the season.

Australia’s wheat outlook dimmed slightly as southeastern states Victoria and South Australia faced below-normal September rainfall. Initial forecasts for a bumper fourth-largest crop were trimmed, with some analysts warning of 0.5 to 1 million tons in potential losses if dryness persisted into harvest. Farmers were expected to begin cutting in October, with production trends closely watched given Australia’s role in Asian wheat supply.

Ukraine’s harvest and sowing data underscored war-related constraints. By early October, Ukraine’s grain harvest reached 31.5 million tons—16% below 2024—highlighted by an eight-year low in sunflower output. Sunflower oil exports plunged 24% year-on-year, intensifying volatility in the global vegoil sector. At the same time, Ukraine’s winter crop sowing lagged last year by about 5%, covering nearly half of intended area. Total grain and legume exports since July 1 stood at 7.2 million tons, down 39% from last year, with corn exports particularly weak (−69% y/y).

In North America, warm and mostly dry weather across the Midwest and Plains allowed U.S. corn and soybean harvests to advance rapidly. By October 5, analysts estimated corn harvest at 31% and soybeans at 38% complete. However, falling Mississippi River levels continued to strain logistics despite scattered rainfall in the Ohio Valley. Hurricane Priscilla and Typhoon Halong added tropical volatility, with rainfall risks for U.S. and Asian coastal regions.

Outlook

Looking ahead, markets remain focused on three pivotal factors. First, South American weather is critical: consistent rains in Brazil could lock in early soybean potential, while persistent dryness in Argentina or Australia would shift global balances. Second, Russia’s export stance continues to weigh on wheat prices, but a cut in planted area could alter 2025/26 supply. Third, demand remains uncertain: China’s absence from U.S. soybean markets is critical, and any resumption of purchases could swiftly alter Gulf basis levels and futures spreads.

Volatility remains the keyword for October, with global grains caught between heavy near-term supply signals and longer-term structural uncertainties in energy, policy, and climate.