Grain Markets and Other Stuff

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Farm Economy Under Pressure
Headlines this week focused squarely on the deteriorating US farm economy. The Wall Street Journal published an article detailing the challenges facing US soybean farmers, including high input costs, weak commodity prices, rising competition from Brazil, and sluggish export demand. The piece also referenced USDA’s $12 billion Farmer Bridge Assistance (FBA) program, noting that while helpful in the short term, it does not address deeper structural issues.
Reuters published similar coverage, emphasizing tighter bank lending standards, increasing financial stress, and a rise in farm bankruptcies. Together, the articles underscore mounting pressure on farmers and the broader ripple effects across rural America. 

Soybean Oil & Biofuels
Soybean oil futures surged on Thursday, gaining as much as 3.8% on expectations that the Trump administration will finalize US biofuel-blending quotas by March. Last June, the EPA proposed a sizable increase in biomass-based diesel targets, which would significantly boost soybean oil demand. There is optimism that stronger biofuel demand could help offset weak soybean export performance.

NOPA Crush Update
The National Oilseed Processors Association released its December crush report, showing US soybean crush at its second-highest level on record. NOPA members processed 224.99 million bushels, up 4.1% from November and 8.9% from December 2024, slightly above trade expectations.
For full-year 2025, crush totaled nearly 2.4 billion bushels—an 8% increase from 2024. End-of-month soybean oil stocks rose to 1.64 billion pounds, the highest level since May 2024, up sharply from both last month and last year, though just below average trade estimates.

Brazil Soybean Crop
Brazil’s soybean crop is shaping up to be record large. Agroconsult raised its estimate to 182.2 mmt, citing strong field conditions and limited widespread issues. Meanwhile, Conab trimmed its estimate slightly to 176.1 mmt due to marginally lower yield expectations. Even so, the crop remains record large and would exceed last season’s production. 

Export Sales
US corn export sales impressed last week, with net sales of 1.1 mmt. While down from the prior four-week average, the number was a strong rebound from the previous week. Mexico was the top buyer.
Soybean sales exceeded expectations at 2.1 mmt, up sharply week-over-week and well above the recent average. China was the largest buyer. Wheat sales came in near the low end of expectations at 156,300 mt, with unknown destinations leading purchases.

USDA Flash Sales
USDA reported multiple flash sales on Thursday:
Soybeans sold to China and unknown destinations for 2025/26 delivery
Additional soybean sales for 2026/27 delivery
Corn sales to Japan and unknown destinations for 2025/26 delivery

Drought Monitor Update
USDA’s latest drought data showed mixed but generally improving conditions across parts of the Corn Belt and High Plains. Above-normal precipitation helped reduce drought intensity in portions of Wisconsin, Iowa, Michigan, Nebraska, and Kansas, while conditions worsened slightly in southern Missouri.
US Areas Experiencing Drought
Corn: 28%
Soybeans: 34%
Winter Wheat: 41%
Spring Wheat: 10%
Cattle: 34%

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🌽 Argentina Corn Crop Update
Argentina’s corn crop is shaping up to be record large. The Rosario Grain Exchange raised its estimate to 62 mmt, well above the prior record of 51.5 mmt set in the 2023/24 season. The increase reflects more planted acres than expected. Despite recent hot and dry conditions, crop stress has been limited, and rainfall is forecast for key growing areas.
For comparison, the USDA is currently projecting Argentina’s corn crop at 53 mmt.

📈 Corn & Soybean Futures
Corn and soybean futures finished higher on Wednesday, bouncing from oversold levels.
March corn settled near $4.22
March soybeans closed around $10.43
The gains were largely technical after futures fell to their lowest levels since October earlier this week following Monday’s bearish USDA report.

🔥 US Ethanol Production
US ethanol production surged to a new all-time high last week. Output jumped to 1.2 million barrels per day, crushing the prior record set in December. Ethanol stocks also climbed to a record weekly high of 24.47 million barrels.

According to Reuters data, ethanol margins remain solid across the Corn Belt, running 10 to 40 cents positive based on spot corn, DDGs, and input prices. Margins improved following Monday’s sharp sell-off in corn futures.

🇨🇳 China Soybean Imports
China imported a record 111.8 mmt of soybeans in 2025, topping the prior record set in 2024. Imports rose 6.5% year over year as buyers front-loaded shipments from Brazil and Argentina amid trade war uncertainty.
China largely avoided US soybeans during the year due to President Trump’s tariffs, but purchases resumed after the October trade truce. Traders estimate China has already bought nearly 10 mmt of the 12 mmt it committed to under the agreement.

🚢 USDA Flash Sales
The USDA reported multiple flash sales on Wednesday:
136,000 mt of corn sold to South Korea
334,000 mt of soybeans sold to China
Both were for delivery during the 2025/26 marketing year.

🥈 Silver & Gold Hit Records
Silver prices exploded to a new record high, surging more than 5% and breaking above $90 per ounce for the first time. The rally was fueled by renewed attacks on the Federal Reserve, expectations for additional rate cuts, and rising geopolitical tensions. Silver is now up nearly 30% year-to-date and almost triple where it traded a year ago.
Gold also hit record highs, with prices up more than 70% over the past year.

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🌽 Ethanol & E15 Push

The Renewable Fuels Association is calling for year-round, nationwide sales of E15 following Monday’s bearish USDA report. The group says allowing E15 nationwide could eventually create demand for more than 2 billion bushels of corn and sorghum.

The RFA is urging Congress to pass the Ethanol for America Act, finalize Renewable Fuel Standard volume requirements, limit small refinery exemptions, and reallocate any waived volumes.

Despite the push, year-round E15 is unlikely to materially boost ethanol demand in the near term:
Infrastructure: Many stations would need upgraded tanks, pumps, gaskets, and EPA sign-offs
Consumer behavior: Most drivers don’t know what E15 is and are hesitant to buy it
Production capacity: US ethanol production is already near capacity
An E15 mandate would be the fastest way to meaningfully increase corn demand—but that would require new plants, new infrastructure, and billions of dollars.

🚜 Trade Policy Risk: USMCA

President Trump said this week that the US-Mexico-Canada Agreement is now “irrelevant” and no longer benefits the US. The agreement is up for review this year, with renewal requiring all three countries to agree by July 1.
Mexico has been the largest buyer of US corn in recent years. Any disruption to USMCA would be a major risk to corn exports. See chart below.

🥩 Beef Prices Hit New Records

Ground beef prices averaged $6.82/lb in December, up 16% year over year. Steak prices averaged $12.51/lb, up 18%.

Beef prices remain a major driver of higher food costs and are expected to keep rising into 2026 due to historically low US cattle inventories and new dietary guidelines encouraging higher animal-protein consumption. See beef charts below.

🌱 Soybean Flash Sales
USDA reported multiple soybean flash sales on Tuesday:
168,000 mt to China
152,404 mt to Mexico
Both are for delivery during the 2025/26 marketing year.

📊 Inflation Update

The December CPI showed inflation at 2.7% year over year, unchanged from November and in line with expectations. Food prices jumped 0.7% month over month, the largest increase since October 2022.
Despite tariff concerns, inflation remains relatively stable, and the report is unlikely to change the Fed’s cautious stance on rate cuts. See CPI chart below.

🌎 Largest US Landowner

The owner of the LA Rams and Denver Nuggets is now the largest landowner in the US. Stan Kroenke recently purchased 1 million acres in New Mexico, bringing his total US landholdings to over 2.7 million acres.

Other top landowners include:
Emmerson Family: ~2.5 million acres
John Malone: ~2.2 million acres
Ted Turner: ~2.0 million acres
Jeff Bezos: ~462,000 acres
Bill Gates: ~275,000 acres

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🌽 Corn

Corn futures plunged on Monday, with prices down nearly 6%, marking the largest single-day decline since June 2023. The selloff followed a decidedly bearish report from the USDA.

The agency raised its estimate of the 2025 U.S. corn crop to a record 17.02 billion bushels, up 269 million bushels from the prior forecast. USDA also increased last year’s national average yield to a record 186.5 bpa, up from 186 bpa previously. Many analysts had expected cuts to both production and yield following dry fall conditions, making the revisions a surprise.

USDA also boosted December 1 corn stocks to 13.3 billion bushels, the largest Dec. 1 corn stocks on record.

🌾 Winter Wheat

US winter wheat acreage is expected to decline marginally for the 2026 crop. USDA estimates 33.0 million acres planted, slightly below last year’s 33.2 million acres but above analyst expectations of 32.4 million.

Notably, USDA is forecasting record-low winter wheat acres in Nebraska and California.

Hard red winter wheat: slightly lower year over year
Soft red winter wheat: modest increase
White winter wheat: sharp decline

🚜 Farm Policy & Aid

The American Farm Bureau Federation is calling for additional farmer aid. AFBF President Zippy Duvall said the Trump administration’s $12 billion Farmer Bridge Assistance program is welcomed, but falls far short of offsetting tens of billions of dollars in recent farm losses.

Duvall is urging:
Expanded trade opportunities
Labor reform
Year-round approval of E15, which could boost corn demand and lower fuel costs

Farm Bureau supports greater market access for U.S. agriculture while opposing President Trump’s tariffs.

🚢 Exports & Demand

US soybean shipments beat expectations last week. USDA reported 1.5 mmt (56 mil bu) of soybeans inspected for export during the week ending January 8 — up 55% week over week and up 13% year over year. China accounted for 59% of the total.

Corn inspections: 1.5 mmt (59 mil bu), near the upper end of expectations
Wheat inspections: 317,465 mt (12 mil bu), sharply higher week over week

USDA also announced multiple flash sales of corn:
204,000 mt to South Korea
310,000 mt to unknown destinations
Both for 2025/26 delivery.

🏛️ Macro & Markets

Republican lawmakers are pushing back against the Justice Department’s investigation into Jerome Powell, arguing it could undermine Fed independence. Treasury Secretary Scott Bessent reportedly warned President Donald Trump that the probe could spook financial markets.

Trump denied knowledge of the investigation, which comes amid months of pressure on the Fed to cut interest rates further. The controversy could complicate Trump’s efforts to nominate Powell’s successor.

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🌽 USDA Reports Preview (Crop Production, WASDE & Grain Stocks)
USDA will release its monthly Crop Production and WASDE reports on Monday, along with the quarterly Grain Stocks report.
• Analysts expect a notable decline in US corn production and yield, though both would still be record large
• Soybean production and yield are forecast to slip modestly
• US ending stocks for corn and wheat are expected to edge lower
• Soybean ending stocks are projected to increase slightly
• Corn exports are forecast at record highs
• Soybean exports are expected to decline amid slow sales to China
• World ending stocks are expected to remain largely unchanged

🇨🇳 China Buys More US Soybeans
China purchased at least 10 cargoes of US soybeans on Friday for April–May shipment.
• At least eight cargoes will ship from the US Gulf
• The remainder will ship from the PNW
• The deal follows another 10-cargo purchase earlier in the week by Sinograin
• Several smaller flash sales were also reported last week
Despite the recent buying, traders remain uncertain about if and when the soybeans will ultimately ship.

🚢 USDA Flash Sale Update
USDA reported a flash sale of 198,000mt (7 mil bushels) of soybeans to unknown destinations for the 2025/26 marketing year.
• Accumulated US soybean sales are down 29% vs. last year

🇧🇷 Brazilian Soybean Harvest Begins
Brazil’s soybean harvest is underway and running ahead of normal.
• 0.53% harvested vs. a five-year average of 0.39%
• Only 0.05% was harvested at this time last year
• Warm, dry weather is expected to persist
Both Conab and USDA are projecting a record Brazilian soybean crop.

📊 CFTC Fund Positioning
For the week ending January 6:
• Funds were net buyers of corn
• Net sellers of soybeans (continuing a large liquidation trend)
• Net sellers of SRW wheat

💳 Trump Calls for Credit Card Rate Cap
President Trump is calling for a 10% cap on credit card interest rates for one year, down from current rates near 20%.
• Banks warn the move could reduce credit availability
• Riskier borrowers could face credit line cuts, higher fees, or larger minimum payments
• Proposal could take effect as early as January 20
Shares of some credit card companies were lower this morning, with Capital One down about 2.5%.