Trade Policy and Demand Developments

The dominant narrative this week centered on the renewed engagement between the United States and China — a development with implications far beyond wheat or soybeans. After nearly a year of subdued agricultural trade, Beijing’s decision to suspend additional retaliatory tariffs on select U.S. farm goods starting November 10 marked a pivotal policy thaw. The announcement came directly after the Xi–Trump meeting in Seoul, signaling a willingness on both sides to normalize ag relations and reduce friction in commodity flows.

The move immediately reverberated through global grain markets. China booked roughly 120,000 metric tons of U.S. wheat — split between soft white and spring varieties — representing its first wheat purchase since October 2024. Though modest in size, the deal was interpreted as a diplomatic gesture restoring symbolic trust between the world’s two largest agricultural economies. Simultaneously, a U.S. sorghum cargo was reported loading for Chinese delivery, another first since last year, reaffirming that trade channels disrupted by tariffs were gradually reopening.

Beyond wheat and sorghum, the greater policy signal came from Beijing’s state-owned COFCO Group, which hosted a high-level soybean procurement ceremony during the U.S.–China Agricultural Trade Cooperation Forum in Shanghai. The White House later disclosed that China intends to import at least 12 million metric tons of U.S. soybeans before year-end, followed by a minimum of 25 million tons annually over the next three years. Although these figures remain unconfirmed by Beijing, the announcement reinforced expectations for stronger bilateral agricultural flows throughout 2026.

China’s renewed interest was not limited to U.S. origins. In Shanghai, supply-chain conglomerate Xiamen C&D signed $5.2 billion in long-term agricultural import contracts with major multinationals including Cargill, Louis Dreyfus, Syngenta, CHS, Olam, BTG Pactual, and Cutrale. These agreements cover soybeans, corn, cotton, and other commodities — highlighting China’s multi-origin sourcing strategy to diversify supply risk while ensuring stable volumes amid volatile weather patterns and geopolitical uncertainty.

Meanwhile, Brazil continued to dominate physical exports. The national export association ANEC projected November shipments of 3.77 MMT of soybeans, 2.23 MMT of soymeal, and 5.57 MMT of corn, all exceeding last year’s pace. The combination of favorable late-October rains and strong logistics performance allowed Brazil to retain its price advantage, keeping its soybeans more competitive than U.S. Gulf offers even after China’s tariff suspension.

On the policy front, Russia proposed tighter export-quality controls and greater traceability for grain cargoes as part of its post-harvest oversight reforms, a strategic shift from volume-driven exports to quality assurance and origin transparency. Simultaneously, Moscow reduced its floating wheat export duty to 76 rubles per ton for the period November 7–11 — its lowest in months — in a move designed to encourage new sales amid declining global prices.

Kazakhstan, another key supplier in the Black Sea region, announced that grain exports this season would reach approximately 13 million tons, maintaining parity with last year. The country also hinted at increasing its wheat share to premium protein levels (≥12%) in upcoming seasons, a strategy aimed at capturing higher-value markets in the Middle East and North Africa.

In Europe, trade momentum remained stable despite mixed macro signals. EU soft-wheat exports totaled roughly 8 MMT since the marketing year began, down about 4% year-on-year, with Morocco, Egypt, and Saudi Arabia remaining top buyers. Corn imports were significantly lower — off nearly 26% — due to robust domestic supply and sluggish feed demand. These patterns align with the European Commission’s forecast of record on-farm grain stocks heading into 2026.

Elsewhere, trade diversification trends gained momentum. Australia finalized preparations to resume canola exports to China for the first time since 2020, signaling a reopening of one of its most lucrative agricultural markets following years of phytosanitary disputes. Canada and Pakistan also concluded a new canola supply agreement, while India maintained its tight export restrictions on wheat and non-basmati rice to manage domestic food inflation — a policy that continues to affect price spreads across Asia and the Middle East.

Collectively, these developments illustrate a global grain market in transition — one balancing diplomacy with practicality. China’s re-engagement, Russia’s regulatory adjustments, Brazil’s export dominance, and Australia’s re-entry into the oilseed trade all underscore a broader trend toward trade realignment and diversification. As supply chains adjust, market confidence in agricultural continuity has strengthened, but price competition among exporters remains fierce.

Price Movements and Market Sentiment

In Chicago, wheat and soybeans led the volatility through midweek before retreating on profit-taking. Wheat futures saw initial strength after reports confirmed China’s first U.S. wheat purchases since 2024, but gains faded as the market “sold the fact.” The December ’25 CBOT wheat contract finished the week around $5.35½/bu, after peaking near $5.54¾ midweek.

Corn futures were equally choppy: the December ’25 contract closed near $4.28¾/bu, pressured by delayed USDA export-sales data during the federal shutdown but supported by record-breaking ethanol output of 1.123 million bpd, the highest on record.

Soybeans endured a sharp correction, with November ’25 contracts closing the week at $10.91¾/bu, down almost 30 ¢ from early highs. While China’s COFCO signed procurement agreements in Shanghai, the lack of firm tonnage details and the persistence of the 13% tariff on U.S. beans limited follow-through buying. Meal weakened by nearly $10–$12.50 per ton, while soyoil remained steadier, helped by strength in Asian vegetable oil markets.

Production Outlooks and Global Supply

The FAO’s latest update confirmed that global grain production in 2025/26 will reach 2.99 billion tons, with ending stocks projected at 916.3 million tons—lifting the stock-to-use ratio to 31.1%, the highest in eight years. Corn leads this expansion, while rice inventories were revised upward to a record 215.4 million tons.

These ample supplies underscore the market’s resilience to short-term weather or geopolitical shocks. Indeed, analysts suggest that even with elevated energy costs and logistics bottlenecks, the world remains comfortably supplied heading into 2026.

Regional Highlights and Weather Dynamics

United States:
A warm 15-day outlook dominated the U.S. Midwest and Plains, aiding harvest completion but maintaining dryness across several winter wheat zones. The Mississippi River, while cresting early in the week, showed signs of receding again by late November, raising concerns about barge logistics and basis risks at key export terminals.

South America:
Weather conditions continued to drive sentiment. Brazil experienced reinforced rainfall across central and northern regions—particularly Mato Grosso and Goiás—improving soybean germination after early-season dryness. Meanwhile, Argentina began 2025/26 soybean planting under “optimal” moisture, covering 4.4% of the planned 17.6 Mha with expected output near 48.5 MMT. The Paraná River port expansion—a $277 million investment under the RIGI framework—advanced, promising stronger export capacity.

Russia and the Black Sea:
Russia reduced its floating wheat export duty to 76 rubles/ton (from 167.7), part of its “grain damper” mechanism designed to stabilize domestic prices. Despite smaller crop volumes, Moscow’s emphasis shifted toward quality control and traceability, while neighboring Kazakhstan guided exports at ~13 MMT, steady year-on-year. SGS data showed that Ukraine’s share of wheat with ≥11.5% protein rose to 44.3% in 2025 from 35.4% a year earlier—reshaping regional blending competitiveness.

Europe:
Mild temperatures and steady field progress characterized the continent. FranceAgriMer reported 90% of corn harvested and 79% of soft wheat sown, with nearly 98% of crops rated good or very good. Despite warm trends, subnormal rainfall in central Europe raised concerns for early 2026 soil recharge.

Australia:
Mixed rainfall patterns and cooler conditions defined late-season harvests. The first canola cargo to China since 2020 marked a diplomatic breakthrough, potentially revitalizing the country’s oilseed trade profile.

Asia and Tropics:
In Asia, China’s October soybean imports reached 9.48 MMT (+17.2% y/y), maintaining a record pace despite seasonal easing. In the tropics, Typhoon Kalmaegi and Tropical Storm Fung-Wong brought heavy rainfall to Vietnam and the Philippines, influencing regional logistics.

Macro Drivers and Speculative Positioning

Fund movements reflected a risk-off stance late in the week, with funds net sellers across major U.S. grain contracts. Corn and soy open interest rose, while SRW wheat fell as traders unwound long positions following the midweek rally.

The broader macro environment remained supportive, with U.S. ethanol production at record highs and crude oil softening, easing biofuel-driven price inflation. Producer sentiment in the U.S. improved modestly, with the Purdue/CME Ag Barometer ticking up to 129, reflecting optimism about current financial conditions despite lingering policy uncertainty.

Outlook: Balancing Optimism and Oversupply

As markets head into mid-November, sentiment remains torn between renewed demand optimism and the weight of record supplies. China’s symbolic re-entry into U.S. grain markets revived hopes of lasting trade normalization, but the competitive edge still favors Brazil and the Black Sea region.

Weather patterns will remain a decisive factor—particularly in Brazil’s soybean belt and the U.S. Midwest—as planting and harvest cycles continue simultaneously across hemispheres. Meanwhile, policy-driven tailwinds from energy and trade will keep prices supported, though capped by abundant global stocks and strong 2025/26 supply fundamentals.

In essence, the week closed with a cautiously balanced tone: the global grain market is volatile but fundamentally well-supplied, poised between geopolitical thaw and agricultural abundance.