Wrapping up 2025 and getting ready to head into 2026. What will the new year bring? Here are my top 5 items to watch into early 2026.
What’s happened
2025 has been an eventful year for grain markets. Tariffs, trade wars, global wars and geopolitics were major headlines impacting grain trade and price action. And quite frankly, those will likely again be some of the leading headlines to continue to watch into 2026.
While time will tell ultimately which way prices will trend in the New Year, one thing that seems likely is continued price volatility and potential dramatic price swings for 2026 as traders sort through important corn, soybean and wheat price fundamentals.
From a marketing perspective
No. 1. Watch pertains to the U.S. economy in regard to interest rates and the value of the U.S. dollar.
U.S. interest rates have been on a slow decline in 2025 as inflation rates are modestly being tamed. In 2026, how many additional interest rate cuts will occur? The current Federal Reserve Chairman Jerome Powell’s term will expire in May of 2026. President Trump has been hinting that the potential desired replacement is someone who would likely lean into lowering interest rates at an accelerated rate.
When looking at the dollar, the value of the U.S. Dollar Index in January 2025 was trading near 110, and trended lower ever since, now trading near 98.
A lower U.S. dollar can help keep U.S. agricultural exports more competitive (due to currency exchange rates). All you need to remember is that when the value of the dollar is of a lower value, currency exchange rates make it cheaper for other countries to import our commodities. A lower dollar has a tendency to increase demand for corn, soybean and wheat exports.
No. 2. Monitor geopolitical tensions. While multiple attempts have been made for peace in the Middle East and Russia/Ukraine, nothing seems to be sticking.
Pay close attention to the ongoing war with Russia and Ukraine as a lot of global grain is produced in the Black Sea region. Think of the Middle East and you think of crude oil and the Strait of Hormuz, a major waterway critical for transporting natural gas, fertilizer and crude oil. And now there is a new global rift to monitor with the additional flare up with Venezuela.
No. 3. Pay attention to ongoing Chinese trade negotiations and monitor the potential legal ramifications ahead for U.S. tariffs.
The appeals court ruled recently that President Trump’s tariffs overstepped his presidential authority, and the case is currently under review with the Supreme Court.
The implication is that countries still negotiating the details of their trade deal, including China, are more likely to drag their feet with negotiations, hoping the court will strike tariffs down. If the Supreme Court does rule against the president, countries that have been paying tariffs may ask for refunds. The Supreme Court decision will likely not be announced until January.
No. 4. Closely analyze the Jan. 12 USDA WASDE report. This report is often dubbed as “the big one” and is associated with dramatic price reaction. It can have plenty of twists and turns in the supply and demand categories, both on the domestic and global front.
For corn, the trade will be anxious to see what USDA uses for the yield number. Traders have been thinking the current number of 186 bushels per acre might be too high.
Also of particular note to the industry is one aspect of the demand table for corn. Exports and ethanol demand for corn are exceedingly strong. However, the number in question is the 6.1-billion-bushel demand number pegged for feed and residual use for the 2025-26 crop year. Many in the industry feel this particular demand number needs to be reduced.
For soybeans, traders will ultimately monitor U.S. demand for exports, which is expected to become smaller than the current number of 1.635 billion bushels. However, the demand for crush, is expected to grow, and be slightly larger than the current number of 2.555 billion bushels. Ultimately, how will that affect the current 290-million-bushel carryout?
Global carryout for soybeans is currently viewed as record large, which may keep soybean futures prices in check. However, should a weather event occur in South America in the coming months, the soybean market price might have the ability to push higher.
No. 5. Weather, particularly weather in South America. January and February is a critical time for watching weather impacts on the soybean crop in Brazil and Argentina. South America has the potential to produce a record soybean crop. However, any weather threat could put that notion in jeopardy.
Prepare yourself
One thing is nearly certain in 2026: Price volatility. The key is to understand that you can manage volatility by positioning yourself for both higher and lower prices, despite the outlook. Let’s be honest, none of us know what the future holds for grain prices in the short term. A strategic approach allows you to be mentally and emotionally ready for whatever the market does in the coming months.
Take time now to map out the potential scenarios for the coming months for why prices could either make new price highs or potentially slide lower. Marketing is how you get paid for your hard work.