Grain markets face bullish headwinds

The most disruptive force in today’s grain markets may be waning, says an analyst.

U.S. president Donald Trump has roiled markets with his tariffs and tweets, but he may be losing one of his policy hammers, said Dan Basse, president of AgResource Company.

The U.S. Supreme Court is expected to rule on the validity of Trump’s International Emergency Economic Powers Act (IEEPA) tariffs by the end of January.

Why it Matters: Grain markets are already bloated and there’s more coming

“If they’re all seen as illegal by the Supreme Court, boy does that change everything for the markets,” Basse said during GrainFox’s From Bin to Bank webinar.

The Polymarket betting platform thinks there is only a 23 per cent chance that the Supreme Court sides with Trump.

Basse thinks Trump will search for other ways to keep his tariffs intact, but it appears that he is likely going to lose one of his main policy enforcement tools.

Pollsters believe the Democrats have the edge heading into the 2026 midterm elections, which would put that party in the driver’s seat for control of Congress.

If that all transpires, then Trump could have a “lamer” second half of his presidency, said Basse.

It is one of many factors that could influence grain markets for the remainder of 2025-26.

Another key factor is the massive U.S. corn crop, which is estimated at 425 million tonnes. To put it in perspective, that is the same size as the combined corn and soybean crops of Brazil, Argentina, Paraguay and Uruguay.

“We’ve got a lot of corn here in the United States, and it’s going to have to find a home somewhere,” said Basse.

The U.S. is expected to export about three billion bushels of corn in 2025-26, but that would still leave a burdensome 2.1 to 2.4 billion bu. of carryout.

AgResource is forecasting a bloated 400 to 470 million bu. of soybean carryout and 900 million bu. of wheat.

“I don’t see a story of bullishness from the United States in either corn, soybeans or wheat,” he said.

Basse thinks U.S. growers will increase soybean plantings by six to seven million acres to 87 to 88 million acres.

That means today’s bull market for soybeans resulting from China’s recent trade agreement with the U.S. is tomorrow’s bear market as traders come to grips with the bloated carryout of the crop and next year’s acreage forecast.

Corn could lose six to seven million acres, dropping back to 92 to 93 million acres as growers are confronted with corn planting costs of US$887 per acre compared to $475 to $500 per acre for soybeans.

An estimated 70 per cent of Brazil’s soybean crop is already in the ground, while planting is just underway in Argentina.

“God has been very kind to farmers throughout Latin America,” said Basse.

“We’re looking at a very good start.”

Brazil could potentially harvest a record 180 million tonnes of soybeans in 2026, although he noted that harvest is still a long way away.

GrainFox analyst Neil Townsend said that demand for most crops needs to be more “exciting” to mop up all the supply.

However, he noted that spring wheat demand has been very good for both Canada and the U.S.

He thinks oats might be the biggest candidate for a price breakout because supplies are tight and U.S. corn exports have been strong.

“Maybe later in the year there could be a bit of a surprise uptick in oat demand,” he said.

Townsend would like to see more biofuel demand for crops such as soybeans and corn. It appears to have stagnated due to policy indecision.

Barring that, there needs to be one or two significant weather threats to “attack” the supply side of the balance sheet.

Even India appears to have ample supplies of wheat and pulses, he said.

Basse said the Black Sea is oversupplied with wheat. Russia harvested 86 to 88 million tonnes of the crop in 2025 and could be in line for another 89 to 90 million tonnes next year.

However, the Russia-Ukraine war is still going strong, which could result in infrastructure damage at key grain export ports in either country.

GrainFox used the webinar to introduce Sinoa, the company’s artificial intelligence-powered grain marketing assistant.

It was built specifically for agriculture and fine-tuned with more than 20 years of GrainFox’s proprietary data and thousands of other grain data streams.

“It understands the language of the grain markets and delivers real-time, clear analysis for both producers and agribusiness teams,” said GrainFox founder Mark Lepp.

Tags: Argentina, Uruguay, Paraguay, China, spring wheat, corn, markets, grain, oats, Brazil, tariffs, soybeans, crop, pulses, U.S.