Despite the oversupply on global grain and oilseed markets, CoBank experts predict that prices may have already passed their cyclical lows. Rising biofuel production and gradually improving export conditions are creating conditions for market stabilization, reports “ProAgro Group.”

Analysts note that U.S. soybean sales to China have increased amid partial trade easing. At the same time, Brazilian soy remains significantly cheaper, and record oilseed harvests in countries near China, including Kazakhstan, continue to undermine the competitiveness of U.S. soy in this market.

Global grain stocks remain substantial, as most major exporting countries have harvested large volumes of corn and wheat. This intensifies competition in export markets and limits price recovery for U.S. suppliers. CoBank also hopes for the resumption of U.S. sorghum purchases by China, which could support feed crop prices.

Low prices are stimulating consumption, so demand for U.S. grains and oilseeds is gradually increasing. Mexico will remain a key market for U.S. corn, wheat, and rice, and the second most important market for soy. Demand for wheat and flour continues to grow in sub-Saharan Africa, while the Middle East and Southeast Asia increasingly rely on high-quality U.S. soybeans and soybean meal for livestock feed.

Additional market support comes from expanding biofuel production. In the U.S., expected policy adjustments regarding renewable fuel obligations and refinery exemptions will stimulate demand for fats and vegetable oils. Abroad, higher biodiesel blending mandates in Brazil and Indonesia will help reduce global vegetable oil stocks and improve processors’ margins.

Soybean meal exports are expected to become increasingly competitive due to expanded processing capacities in the U.S. and Brazil. The main market competition will occur in Southeast Asia, Latin America, and the Middle East. For livestock farms, low feed prices will remain advantageous at least through 2026, although demand growth is expected to be moderate. High resource costs may limit corn planting and push farmers toward cheaper alternatives.

As previously reported, on global markets for grains and oilseeds: wheat is mixed, corn is rising, and soybeans are falling.

Source: World Grain