Early 2026 grains gains may be limited by ample global supplies, BMI Research says

[Hand holding grains of wheat against a golden pile]
Thanasis Zovoilis/DigitalVision via Getty Images

The grains complex has posted early price gains in 2026, but the rally is unlikely to be sustained amid abundant global supplies, brokerage BMI Research said.

Year-to-date as of the January 27 close, rice prices have climbed 13.2% to settle at USc1123.5/cwt, soybean prices (S_1:COM [https://seekingalpha.com/symbol/S_1:COM#hasComeFromMpArticle=false#source=section%3Amain_content%7Cbutton%3Abody_link%7Cfirst_level_url%3Anews]) have risen 3.1% to USc1079.5/bu, and wheat prices (W_1:COM [https://seekingalpha.com/symbol/W_1:COM#hasComeFromMpArticle=false#source=section%3Amain_content%7Cbutton%3Abody_link%7Cfirst_level_url%3Anews]) have gained 2.7%, settling at USc532.8/bu.

While the gains have been driven by a mix of macro and commodity-specific factors, Fitch's BMI expects prices to face a ceiling in the near term once speculative short-covering fades, given persistent oversupply fundamentals.

At the macro level, U.S. dollar (DXY [https://seekingalpha.com/symbol/DXY]) weakness has provided a tailwind across the complex, with the DXY spot index falling to 96.2 on January 27, its lowest level since 2022. Individual commodities have also benefited from distinct supportive factors: soybean prices have been underpinned by renewed demand from Mainland China, wheat prices bolstered by weather-driven supply concerns in the US, and rice prices lifted by strong global demand signals.

Despite these supportive dynamics, BMI analysts view the recent price strength as unlikely to be sustained. "Market fundamentals are expected to moderate the upside, particularly given continued expectations of ample supply availability through the first half of 2026," they said.

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BMI Research

Soybean prices have found support from a significant upturn in U.S. sales to Mainland China. According to the latest USDA weekly export sales reports, net new sales to China totaled 2.4 million tonnes over the two-week period ending January 15, representing a 164.0% increase compared to the prior two weeks.

While this marks a substantial acceleration in trade activity, the brokerage believes price support will ultimately be limited. U.S. soybeans face a 13% tariff in China, compared to just 3% for Brazilian soybeans, materially constraining U.S. competitiveness.

BMI analysts, therefore, see limited upside beyond the 25 million-tonne level cited by U.S. Treasury Secretary Scott Bessent, with risks to U.S. exports skewed lower as demand relies heavily on Chinese state stockpiling. With reserves well supplied, longer-term export strength depends on trade relations, while tariffs and China’s reduced import dependence are likely to cap any sustained rally, the note dated Jan 29 said.

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