Volatile Prices and Policy Shifts Reshape the Grain Market
GLOBAL – The international grain market has witnessed volatile price movements and notable policy adjustments in the first week of January 2026, driven by expectations of record harvests in major producing regions, shifting trade policies, and gradual improvements in global supply chains. These developments are reshaping the global grain market, making the grain market a focal point for global agricultural and trade sectors. As grain production scales up, the need for high-quality storage and efficient logistics to stabilize the grain market has become increasingly prominent, further highlighting the importance of monitoring changes in the grain market.
Grain futures prices at the Chicago Board of Trade (CBOT), a key barometer of the global grain market, have experienced fluctuations since the start of the year—reflecting the inherent volatility of the grain market. On January 2, corn, wheat, and soybean futures all closed lower, with the most active March corn contract falling 0.62% to $4.38 per bushel, and the March soybean contract dropping 0.17% to $10.46 per bushel.
After a brief rebound on January 5, where corn futures rose 1.6% and soybean futures gained 1.55% driven by Chinese purchases of U.S. soybeans, prices resumed their downward trend on January 6, continuing the unstable pattern of the grain market. Analysts attribute the volatility in the grain market to a combination of year-start fund selling, expectations of abundant global supply, and pre-report position adjustments ahead of the U.S. Department of Agriculture (USDA)’s key supply and demand report on January 12—a report that is widely anticipated to guide the short-term trend of the grain market.
Abundant supply expectations from major grain-producing regions are exerting significant downward pressure on the global grain market. Brazil is on track to harvest a record soybean crop exceeding 180 million tons, with harvesting set to begin in the next 2-3 weeks—a development that has already dampened sentiment in the grain market. However, the record harvest has triggered significant logistics challenges, as concentrated harvesting and export demand have led to a "battle for transportation vehicles" in Brazil’s export corridors, pushing up freight costs and adding new uncertainties to the grain market. Meanwhile, global wheat exporters are projected to increase production by 1.1 billion bushels in the 2025/26 season, with the U.S. and Argentina also expected to achieve record corn yields, further weighing on the grain market. Russia, the world’s top wheat exporter, continues to dominate the international grain market with competitive prices, with consultancy estimates suggesting its wheat exports in December were near historical highs—strengthening its influence in the global grain market.
Key trade policy adjustments have emerged as major drivers shaping the trajectory of the grain market. The Russian government announced a 20 million-ton grain export quota for 2026, applicable to wheat, barley, and corn exports outside the Eurasian Economic Union (EAEU) from February 15 to June 30. This policy aims to balance domestic market supply and international exports, and is expected to have a direct and far-reaching impact on the global grain market. In Southeast Asia, Indonesia officially confirmed that it will halt all rice imports in 2026, including both consumption and industrial-use rice, following a 13.54% year-on-year increase in domestic rice production to 34.77 million tons in 2025, achieving self-sufficiency. This decision will reshape the regional grain market, as Indonesia was previously a major rice importer, and its withdrawal from the import market will alter supply-demand dynamics in the Asian grain market.
Additionally, the U.S. Commerce Department’s recent decision to significantly lower anti-dumping duty rates on Italian pasta products is expected to impact global wheat trade dynamics, thereby indirectly affecting the wheat segment of the grain market.
Improvements in global supply chains are providing much-needed relief to the grain trade and boosting stability in the grain market. French shipping giant CMA CGM announced it will resume its Indamex route through the Red Sea via the Suez Canal starting January 15, reducing voyage time by 14 days and lowering transportation costs— a positive development for the efficient operation of the global grain market. Major shipping lines including Maersk and Hapag-Lloyd are also preparing to return to the Red Sea, which is expected to ease logistics bottlenecks for grain shipments between Asia, the Middle East, and the U.S. East Coast, further enhancing the fluidity of the grain market. The resumption comes as war risk surcharges for the Red Sea route have dropped to their lowest level in nearly two years, reducing operational costs for enterprises involved in the grain market and improving the profitability of grain trade.
Looking ahead, market focus will remain on the USDA’s January 12 supply and demand report, which will include critical data on U.S. summer crop yields, December inventories, and early winter wheat planting figures—all of which are key factors that will determine the short-term trend of the grain market. Weather conditions in South America will also be closely monitored, with Argentina expected to receive regular rainfall starting January 8, which could ease drought concerns and potentially revise production forecasts, thereby affecting the grain market. Meanwhile, Iran’s increased grain import demand—projected to import 9.5 million tons of corn, 3 million tons of soybean meal, and 3 million tons of wheat in the 2025/26 season amid currency depreciation and inflation—may provide some upward support to the global grain market.