Chicago Market Snapshot – Thursday, 18 December

Wheat

Wheat started Thursday on an unsteady footing after mixed trade on Wednesday, with ongoing pressure from abundant global supplies. In early Chicago trade, the March 2026 CBOT wheat contract was indicated around $5.06–5.07/bu, close to the prior close. The market remained focused on weak month-to-date price momentum and intensifying competition from alternative origins, while geopolitical risks in the Black Sea have not yet translated into sustained price support.

Corn

Corn began the day with modest support, with the March 2026 contract in Chicago trading around $4.42–4.43/bu, underpinned by strong demand and continued record U.S. ethanol output. Even with a comfortable global balance sheet, the market responded positively to steady export flow and active domestic usage, which helped limit near-term downside risk.

Soybeans

Soybeans opened Thursday without a clear impulse, with the January 2026 contract hovering around $10.59–10.60/bu. The market remained influenced by large-scale Chinese state reserve sales and signals of strong South American supply, which continue to cap any recovery attempts despite occasional U.S. export sales.

Key Global Drivers and Headlines Shaping Today’s Trade

On Thursday, global grain markets traded in an environment dominated by signals of abundance, shifting trade flows, and heightened weather sensitivity. One of the key themes came from the vegetable oils space, where India canceled or deferred more than 100,000 tons of Argentine soy oil imports due to lower domestic prices and a weaker rupee. The move highlighted how quickly pricing dislocations can redirect demand and pressure processing margins worldwide.

At the same time, China continued actively managing its stocks, with state reserves releasing volumes into the domestic market while the country simultaneously increases purchases from the United States. The market has largely interpreted this two-track approach not as a bullish demand signal, but as logistical and pricing balancing—limiting upside potential in soybeans.

In the energy-linked segment, U.S. ethanol data provided support for corn. Ethanol inventories fell to 22.353 million barrels, while production reached a new record of 1.131 million barrels per day. Higher ethanol exports and rising refinery demand strengthened the linkage between energy markets and grains.

On the trade front, new U.S. export business included soybean sales to China and “unknown destinations,” as well as corn sales to Mexico. At the same time, a cancellation of a white wheat deal to China was reported, underscoring the volatility and sensitivity of demand at current price levels.

South America remains a critical variable for expectations into Q1 2026. Brazil continues to benefit from generally favorable rainfall, supporting good development conditions for soybeans and first-crop corn. Argentina, meanwhile, is entering a drier spell, with soybean planting lagging last year and moisture-deficit risks in the Pampas rising if the dry pattern persists.

In Europe and the Black Sea region, warmer and drier conditions are gradually raising concerns for winter wheat. While there is no immediate damage, the combination of higher temperatures and limited precipitation could weaken winter hardiness if cold returns abruptly in January.

Additional market pressure is coming from active supply from alternative origins, including Kazakhstan, which is reporting stronger new-crop exports and reaffirming high export potential for the season. That reinforces competition in wheat and keeps pressure on prices in international tenders.

Finally, vegetable oil markets continue to influence grains indirectly. Rising palm oil exports and production in Indonesia, together with ongoing discussions around EU deforestation regulations, are shaping relative pricing between palm oil and soy oil—feeding back into soybean crush margins.

Overall, today’s trade remains headline-driven and shaped by cross-currents—from China’s policy and India’s buying decisions to South American weather and the U.S. energy market. Even without an acute shortage, sensitivity to news remains high, and price moves continue to be quick and reactive.