Grains: November WASDE provides some clarity with China the near-term swing factor

U.S. balance sheets for corn, soybeans, and wheat

For traders, the biggest message from the domestic section was straightforward: corn remains comfortable, soybeans tightened but not enough, and wheat loosened more than expected.

Corn ending stocks were lifted to 2.154 billion bushels, a touch above the average trade estimate. With the yield only trimmed to 186.0 bpa, and beginning stocks revised higher earlier in the week, the balance sheet retained a buffer that makes it difficult to build a sustained bullish argument without help from South American weather. Production at 16.752 billion bushels remains historically large, reinforcing the view that rallies near recent highs may meet selling interest from producers and commercial hedgers.

Soybeans offered the closest thing to a supportive surprise. Ending stocks fell to 290 million bushels, below expectations, with the yield cut to 53.0 bpa. But the move was not large enough to validate the pre-report surge, and the earlier downgrade to U.S. export demand kept the tightening contained. For traders, the key takeaway is that soybeans still require a confirmed catalyst — likely from export flows or South American weather — to push sustainably higher.

Wheat delivered the cleanest bearish signal. Ending stocks rose to 901 million bushels, well above the trade estimate, after production revisions in the Small Grains Summary fed directly into a heavier balance sheet. This put wheat back into a supply-heavy narrative, and Friday’s trade reflected that, with Chicago wheat futures leading the downside.

Global conditions: wheat abundance confirmed, soybeans trim up, corn steady

The global section reinforced a broadly similar message. World wheat ending stocks were lifted to 271.4 million tonnes, the first annual increase in several years — a clear weight on any attempt to generate a risk premium. From a trading perspective, this keeps wheat structurally capped unless weather or geopolitics introduce a fresh shock. The forward curve reinforces this narrative: Chicago March‑2026 wheat currently trades roughly 50 cents below the December‑2026 contract. This is a clear contango structure, meaning the market prices future supply as more abundant than nearby supply. For traders, this matters because contango raises the cost of holding long positions (via negative roll yield) while providing a tailwind to short sellers who benefit from that same roll. As long as the curve remains this steep, speculative pressure is likely to stay skewed to the short side unless evidence of tightening fundamentals emerges. 

World soybean stocks were trimmed to 122.0 million tonnes, slightly tighter but still insufficient to drive a standalone trend. The market remains highly sensitive to developments in Brazil and Argentina, with traders now increasingly focused on the timing of the next South American harvest — Brazil's main soybean harvest typically begins in late January and accelerates through February and March, while Argentina's follows from March into May. That means the next 60–90 days of weather carry outsized influence: any planting delays or stress during this window could help tighten the balance sheet, while a smooth early harvest would keep pressure on nearby prices.

Corn saw minimal global change with ending stocks at 281.3 million tonnes, keeping the market firmly in a wait-and-see mode regarding Brazil’s planting pace and early weather conditions.

Export data: Chinese soybean demand underwhelms

Friday’s WASDE was accompanied by a backlog release of confirmed flash export sales collected during the shutdown. For traders, this was arguably more influential than the WASDE itself.

While corn demand held up impressively, led by sizeable purchases from Mexico, soybeans were the clear disappointment. There was a stark contrast between actual Chinese purchases of less than 1 million tons compared with the 12 million tons the White House had suggested China would buy before year‑end. This discrepancy between political messaging and actual demand was a key catalyst for long liquidation on Friday before recovering in today's session after U.S. Treasury Secretary Bessent in a Sunday interview reiterated the 12-million-ton target for "this buying season". 

The rapid resumption of weekly export sales from 20 November now becomes a key near-term volatility driver. Traders will be watching closely whether China steps up — or whether the softer trend remains intact.

Looking ahead: what drives the next move

With the WASDE absorbed, attention turns to:

• Weekly export sales (returning from 20 Nov) — especially whether China accelerates soybean buying.

• South American weather — the primary catalyst for trend extension or reversal, especially as the region enters its primary growing season when planting progress, moisture profiles, and early vegetative development have an outsized impact on yield potential.

• Energy prices and USD levels — both relevant for global competitiveness and input costs, given the link to biofuel dynamics where firm trade in fuel products — supported recently by U.S. sanctions on Russia, the world’s second‑largest exporter of diesel — feeds back into soybean oil demand and indirectly shapes price expectations across the oilseed complex.

• The return of the weekly Commitment of Traders report in order to gauge how much of the recent rally that has seen the Bloomberg Commodity Grains index flip from an 8% loss to near flat, has been driven by short covering from leveraged funds.