Abundance on Paper, Scarcity in the Data Layer
1. Record stocks, soft prices and nervous farmers
As November 2025 draws to a close, the global agricultural landscape looks deceptively comfortable. On the physical side, the world has rarely been better supplied with grains. Yet producers’ margins remain thin and long-term investment signals are anything but clear.
According to the FAO, the Food Price Index fell again in October to 126.4 points, down 1.6% month-on-month. The Cereal Price Index declined by 1.3% and now sits almost 10% below its level a year earlier, reflecting ample global supplies.
FAO’s latest forecasts project global cereal production in 2025 at around 2.99 billion tonnes, roughly 4.4% higher than in 2024. Global cereal stocks are expected to reach 916 million tonnes, up 5.7% year-on-year, with a stocks-to-use ratio of 31.1%, the highest since 2017/18. On paper, there is no shortage of calories.
The November 2025 WASDE report from the USDA reinforces this picture. For corn, the tone is clearly “bearish”: U.S. yields are lifted to 186 bushels per acre and production exceeds 16.7 billion bushels, at the top of market expectations. Wheat ending stocks, both in the United States and globally, are revised higher. Only soybeans bring a degree of nuance, with U.S. ending stocks revised lower than traders anticipated, underlining that oilseeds remain structurally tighter than cereals.
The November edition of the AMIS Market Monitor, a joint assessment by FAO, OECD, WFP and G20 partners, puts it succinctly: wheat, maize, rice and soybean markets are “well supplied”, with broadly favourable crop conditions, even if localized issues persist : drought in parts of China, the EU and Ukraine, storm damage in Southeast Asia.
And yet, despite this apparent comfort, few market participants truly feel at ease.
2. Europe’s 2025 harvest: macro resilience, micro fractures
Within the European Union, 2025 is shaping up as a year of macro resilience but micro pain. At the aggregate level, the numbers are robust. The European Commission’s Short-Term Outlook, published in July 2025, projects EU cereal production for the 2025/26 season to rise by 4.1%. Cereal exports are expected to jump by 26%, while imports fall by 19%. Oilseeds production should increase by 12%, vegetable oil output by 6%, and sugar output by 6.5% in 2024/25, helped by larger planted areas.
Taken together, these figures describe an EU moving back towards net-exporter status in grains and oilseeds, after several challenging seasons.
But the field-level reality is far more uneven. The JRC’s MARS crop monitoring bulletin for September 2025 highlights the impact of persistent drought and repeated heatwaves in Hungary, Romania, Bulgaria and parts of Türkiye. Summer crop yields there, particularly maize and sunflower, have suffered irreversible damage, with projections well below the five-year average.
By late October, MARS notes that the EU’s 2025 summer crop harvest is broadly near average. Yet that headline conceals deep regional failures and concentrated income losses in the most drought-prone areas.
The EU therefore presents a split picture: solid volumes overall, sharply higher regional volatility, and heightened pressure on marginal producers in vulnerable regions. Risk is becoming more localized, more uneven and less predictable.
3. Climate and logistics: a new risk frontier that indices fail to see
The World Meteorological Organization now expects a shift towards weak La Niña conditions for the October – December 2025 period, even as global temperatures remain near record highs. For agriculture, that usually implies wetter conditions in parts of Southeast Asia and Australia, and potentially drier weather across parts of Europe and the Middle East with a wide margin of uncertainty for the 2026 crop year.
What is rarely captured in mainstream commentary, however, is how climate volatility has started to bite into inland logistics, particularly in Europe.
In 2025, water levels on the Rhine remained exceptionally low from March through July. Barges were forced to run at less than half capacity, sending freight rates sharply higher and requiring multiple trips to move the same tonnage of grain or fertilizer.
The Danube experienced similarly low levels in July, disrupting shipping across Hungary and affecting both agricultural exports and fertilizer imports, precisely when river transport is most critical.
These rivers are the backbone of grain, oilseed and fertilizer flows into and out of Central and Eastern Europe. When they become unreliable, they shave off already thin margins for EU farmers, slow exports from inland regions at a time of comfortable global stocks, and amplify basis volatility between interior origins and coastal ports.
So far, no major commodity index fully reflects this emerging “logistics climate risk”, even though it is becoming structural as summers grow hotter and drier.
4. Policy whiplash in Brussels: from Green Deal ambition to tactical retreats
Layered on top of climate and logistics challenges is a rapidly shifting regulatory environment, which is quietly reshaping incentives in EU agriculture.
The first element is CAP “simplification”. After months of farmer protests, EU policymakers agreed to relax several environmental conditions attached to Common Agricultural Policy payments. Smaller farms are exempted from some baseline requirements and inspection frequencies are capped, a move that the Commission estimates could save around €1.6 billion a year for farmers. This buys short-term relief, but raises questions about the long-term climate resilience of EU agriculture and the credibility of Green Deal commitments.
The second element is the carbon shock due from 2026. The Carbon Border Adjustment Mechanism is currently in its transitional phase and is set to become fully operational from 2026, covering fertilizer imports among other carbon-intensive goods. Since fertilizers typically account for 6 – 12% of agricultural input costs in the EU, higher carbon-inclusive prices on imported fertilizers will ultimately translate into structurally higher cost floors for many crops.
The third pillar is the EU Deforestation Regulation (EUDR). The law requires geolocation and proof of non-deforestation for key commodity supply chains like beef, cocoa, coffee, palm oil, rubber, soy and timber. Although the Commission has proposed delaying full application to around end-2026, citing IT readiness and the risk of administrative overload, several major food groups now argue against further postponement, having already invested heavily in traceability and compliance systems.
Finally, the Carbon Removals and Carbon Farming Regulation (CRCF), together with the EU Taxonomy for sustainable activities, provides a financial backbone for low-carbon agriculture. Together, they define what counts as an “environmentally sustainable” farming activity, establish a voluntary EU-wide certification framework for carbon removals and allow banks to differentiate lending conditions between climate-aligned and non-aligned farms.
Individually, these instruments may look technical. Taken together, they sketch the future income structure of European agriculture: market premia, access to finance and asset values will hinge increasingly on how easily farms can align with this regulatory architecture.
5. The hidden scarcity: compliant tonnes, not generic tonnes
Much of the commentary around agricultural markets still revolves around a familiar question: will wheat prices be ten dollars higher or lower in a few months’ time?
For the decade ahead, a more pertinent question emerges: which tonnes of grain, oilseeds, cocoa or coffee will still be admissible and bankable in high-income markets under evolving EU rules?
Three facts stand out. First, physical abundance is real: global cereal production and stocks are at record levels, with subdued prices. Second, regulatory tightening is no longer a theoretical prospect: CBAM, EUDR, CRCF and the Taxonomy have all been adopted and are moving forward, despite occasional delays. Third, infrastructure bottlenecks on the Rhine and Danube are no longer isolated events; they are becoming a recurring feature of the European landscape.
Together, these dynamics create a widening gap between two types of commodities:
- undifferentiated, high-carbon, weakly traceable bulk flows;
- and compliant, traceable, low-carbon tonnes, backed by robust data and attractive to ESG-driven capital.
Yet most futures contracts (whether on MATIF or CBOT) do not distinguish between these categories. Banks still tend to assess farm loans mainly on collateral and expected yields, rather than on regulatory resilience or data quality. Physical premia for deforestation-free or low-carbon commodities are emerging, but mostly in private, opaque deals.
This leaves a substantial valuation gap between regulatory reality and market benchmarks. The truly scarce asset is no longer the grain itself, but the data layer attached to it: precise farm geolocation, deforestation-free evidence, fertilizer and pesticide footprints, water use and carbon balances.
6. End-2025 / 2026: risks and opportunities without price speculation
Against this backdrop, the key risks to monitor go well beyond headline price moves.
The first is a persistent European logistics-and-climate risk. Recurrent low water levels on the Rhine and Danube, combined with more frequent heatwaves and droughts, raise the probability of sudden basis blow-outs and temporary local shortages, even when global stocks are abundant.
The second is a structural increase in input costs, particularly for fertilizers, as CBAM becomes fully operational from 2026.
The third is La Niña-linked uncertainty. Even a weak episode can trigger non-linear impacts on yields in the United States and elsewhere, increasing tail risks for the 2026 harvest.
A fourth risk lies in policy credibility. CAP green rule relaxations and repeated EUDR delays may ease tensions in the short term, but they also blur the road map for long-term, climate-aligned investment in EU agriculture.
On the opportunity side, several themes emerge that do not rely on speculative calls.
Traceability and compliance infrastructure is one of them. Supply chains for cocoa, coffee, soy, palm oil, cattle and rubber serving the EU will need granular geolocation, robust risk assessment and continuous monitoring. Software platforms, satellite analytics, auditing services and farm-level data tools that turn compliance from a pure cost into a monetisable attribute are obvious candidates.
The rise of carbon-aligned agronomy in Europe is another. With CRCF and the Taxonomy in place, projects involving reduced tillage, cover crops or agroforestry can generate certified removals and attract premium financing. Aggregating numerous small, compliant projects into investable portfolios is an emerging space for specialised funds and MRV-technology providers.
Investment in logistics resilience along the Danube – Rhine – Black Sea corridor also appears as a durable theme: additional storage, rail upgrades, intermodal hubs and low-draft vessels all help mitigate the volatility of river conditions.
Finally, the gradual emergence of differentiated “EU-grade” contracts for grains and oilseeds that meet EUDR, CBAM and Taxonomy criteria points towards a two-tier market, where transparent premia for compliant flows could eventually become standard.
7. The real story going into year-end
For November 2025 and the turn of the year, the central story in global agricultural commodities (particularly from a European perspective) is not a simple opposition between shortage and surplus.
Verified data point to record supplies and comfortable stocks, to modest and fairly stable prices, and to localized climate damage in parts of Europe offset by strong yields elsewhere. At the same time, a dense wave of EU regulations is reshaping who will be able to sell what, to whom, and under which conditions.
The under-reported shift is that “compliance-ready tonnes” are slowly becoming a distinct asset class: grounded in law (EUDR, CBAM, CRCF, Taxonomy), constrained by physical infrastructure (rivers, ports, storage) and increasingly demanded by multinational brands and climate-constrained finance.
For investors and policymakers who think strategically about agricultural commodities, the real edge no longer lies only in reading the weather or the latest WASDE. It lies in understanding the regulatory and data architecture that will determine which tonnes will truly count in the markets of the future.
Sources
- FAO, Food Price Index ; Cereal Supply and Demand Brief (Oct. – Nov. 2025)
- FAO/OECD/WFP, AMIS Market Monitor (Nov. 2025)
- USDA, WASDE Report (Nov. 2025)
- WMO, Global Seasonal Climate Updates (2025)
- European Commission, Short-Term Outlook for EU Agriculture (Summer 2025)
- JRC, MARS Crop Monitoring Bulletin (Sept. & Oct. 2025)
- Regulation (EU) 2023/956, CBAM
- Regulation (EU) 2024/3012, Carbon Removals & Carbon Farming (CRCF)
- EU Taxonomy delegated acts (2023–2025)
- Regulation (EU) 2023/1115, EUDR (Deforestation)
- Eurostat, agriculture and trade data 2024 – 2025
- OECD, agricultural market reports 2024 – 2025
- Argus Media, Reuters, Financial Times, 2025 coverage of agricultural prices and logistics