Market Behavior
After a difficult close to 2025, grain markets are beginning to show signs of movement in early 2026. Shifting global dynamics, changing USDA projections, and renewed demand possibilities are creating cautious optimism for both rice and soybeans. With planting decisions ahead and acreage in focus, the months to come could play a critical role in shaping future market balance.
The last few months of 2025 were tough on the rice market. Fund traders were relentless sellers, and demand was too weak to counter them. So far in 2026, the market is showing some promising signs of life. The extraction of Nicolas Maduro in Venezuela prompted the early stages of the rally, as it provided some optimism for U.S. rice demand. Exports from the U.S. to Venezuela have been erratic over the past 25 years, but have reached 12-15 million bushels in the big years. Given recent geopolitical developments, there is also renewed hope for the Cuba and Iran markets, which were significant for U.S. rice in decades past.
USDA’s January updates increased production slightly for the 2025 crop and reduced imports. Exports were reduced, reflecting the weak demand from 2025; however, domestic use was increased substantially. The net of all the January changes reduced ending stocks to 77 million bushels. Crop returns favor soybeans; therefore, unless the rice market can make a substantial rally into late winter, rice acres could be substantially reduced. If long grain rice acres are reduced by 25% or more, it could lead to dramatic stock tightening into 2027.
The January USDA update increased soybean production from the 2025 crop, reduced exports, and increased crush. The net of all January changes increased the soybean ending stocks from 290 million bushels to 350 million bushels. The market reacted negatively to the increase in ending stocks; however, positive rumors concerning EPA’s expected final rule on biofuels created a rally that offset the majority of the selloff.
South American weather has been pretty good; therefore, market focus will increasingly turn to U.S. planting intentions. Last year, the U.S. planted 81.2 million acres. Acres should increase this year, but as long as they don’t exceed 84 million, they shouldn't be a drag on the market
Grayson Daniels
VP, Grain Sales and Procurement
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News & Views: Government Affairs Update
USDA has announced $12 billion in Farmer Bridge Assistance, including direct payments to producers of key commodities. While the aid won’t fully cover recent losses, it provides timely support as farmers navigate current challenges and await stronger safety net programs later in 2026.