Grain markets kicked off the week with significant losses, led by a sharp decline in corn futures as traders digested potential shifts in global supply dynamics. The most active corn contract for March delivery on the Chicago Board of Trade fell by as much as 1.7 per cent on Monday, December 29, 2025. This marked the commodity's most substantial intraday slide in over a month, erasing gains from the previous Friday which had pushed prices to their highest level since mid-November.
China's Potential Move Weighs on Prices
The primary catalyst behind the sell-off was market speculation that China could be preparing to release grain from its substantial domestic reserves. According to Arlan Suderman, chief commodities economist at StoneX, this talk directly pressured corn prices. In a note to clients, Suderman explained that if China follows through, some of the older wheat from reserves would likely be diverted into livestock feed, thereby displacing a portion of corn demand.
This potential increase in grain supply from China coincides with other actions by the Asian nation to manage its stockpiles. Reports indicate China has also been auctioning soybeans from state reserves. Analysts view this as an effort to clear storage space in anticipation of increased imports from the United States, linked to the terms of the ongoing U.S.-China trade deal.
Broader Market Context and Other Factors
The pressure was not isolated to corn. The broader grain complex also traded lower on Monday, with both wheat and soybean futures registering declines. Traders, emerging from a quiet holiday period, were actively seeking clear demand signals to guide market direction.
Beyond Chinese reserves, market participants were monitoring geopolitical developments. Attention was focused on Ukraine and Russia after President Volodymyr Zelenskiy recently sought security guarantees from U.S. President Donald Trump. Adding to the complex backdrop, the White House reported on Monday that Trump held a "positive call" with Russian President Vladimir Putin, keeping traders alert to any potential impacts on Black Sea grain exports.
U.S. Export Data Provides Mixed Signals
Adding another layer to the market narrative, the U.S. Department of Agriculture (USDA) released its weekly export inspection data. The report showed that 750,300 tons of U.S. soybeans were shipped during the holiday-shortened week. While this represented the lowest weekly total since September, the data included two bulk cargoes specifically destined for China, confirming ongoing trade flows between the two nations under the existing deal.
The day's activity underscores the sensitivity of agricultural commodity markets to policy decisions by major players like China and shifting geopolitical winds. The prospect of additional grain supply entering the global market from Chinese reserves presents a near-term headwind for prices, as traders continue to balance this against underlying demand and other supply-side variables from key producing regions.
