By Kirk Maltais
--Wheat for March delivery fell 2.3% to $5.09 1/2 a bushel on the Chicago Board of Trade Tuesday, as analysts see supply of wheat and other grains growing globally on supportive weather conditions.
--Corn for March delivery fell 0.9% to $4.36 1/4 a bushel.
--Soybeans for January delivery fell 0.8% to $10.63 1/2 a bushel.
HIGHLIGHTS
Softer Outlook: The outlook for the grains complex heading into 2026 is turning towards higher supply combined with lower U.S. export demand. This sentiment is being seen across the row crop complex, but it seems especially true for wheat. "There is a fundamental case for being short as global supply is busting," said Charlie Sernatinger of Marex in a note, in reference to wheat.
Turning on the Water: Row crops in Brazil are benefiting from an influx of rainfall moving through the country's growing areas, said Michael Cordonnier of Soybean & Corn Advisor. "Rainfall last week and over the weekend in Brazil became much more regular, favoring crop development and the planting of the remaining soybeans," said Cordonnier, also noting that heavier rainfall is expected this week as well. This is even true of Rio Grande do Sul, a southern Brazilian state that has been especially dry and experiencing planting slowdowns as a result. The improving outlook for Brazil added to the pressure felt on grain futures.
INSIGHT
Time Capsule: CFTC Commitment of Traders reports are still roughly three weeks behind, but recent ones show that fund traders initially piled into long positions in soybean futures after the October agreement between President Trump and Chinese President Xi. In the report dated Nov. 4, the CFTC said long positions in soybeans held by fund traders grew by roughly 45,000 contracts, bringing the net long to nearly 179,000 contracts. The funds grew that net long position in November, but in its Nov. 25 report the CFTC showed a reduction in net longs by roughly 17,000 contracts -- a trend that is expected to continue in December as traders are underwhelmed by Chinese soybean purchases.
Get Low: Cotton futures fell to 63 cents a pound in Tuesday's trading, the lowest cotton has traded at since July 2020. Some of the biggest buyers of U.S. cotton have been absent from the export market in the wake of President Trump's tariff campaign. "U.S. export sales continue to lag behind previous years, with China and India backing off after making some significant purchases while they were involved in trade talks with the U.S.," said ADM Investor Services in a note. Corn or soybeans are sometimes the substitute for unprofitable cotton acres, but because of the incompatible machinery that switch is tough for farmers to make.
Underlying Uncertainty: A potential Russia-Ukraine cease-fire could see U.S. sanctions on Russian oil lifted relatively quickly, although the removal of European sanctions would likely be more gradual, Jorge Leon of Rystad Energy said in a note. An end to attacks on Russian oil infrastructure would reduce the risk of supply disruptions, a large amount of Russian oil on water could come to market, and discounts on Russian barrels would likely narrow, said Leon. How crude oil moves is a factor for grain futures, due to the use of U.S. cash crops as feedstock for renewable fuels.
AHEAD
--General Mills Inc. will release its second-quarter 2026 earnings at 7 a.m. ET Wednesday.
--The EIA will release its weekly ethanol production and stocks report at 10:30 a.m. ET Wednesday.
--The USDA will release its weekly export sales report covering the week ended Nov. 27 at 8:30 a.m. ET Thursday.
Anthony Harrup contributed to this article.
Write to Kirk Maltais at kirk.maltais@wsj.com
(END) Dow Jones Newswires
12-16-25 1507ET
