Despite volatility in broader markets, grain futures found upward traction Thursday as traders responded to strong demand signals, drought concerns, and ongoing uncertainty around global trade and production outlooks.

Corn futures led the gains, buoyed by technical buying and short-covering activity. December contracts rose 5 cents to settle at $4.2175, while March futures closed at $4.3550. Demand optimism remains high following a report showing ethanol production averaging 1.074 million barrels per day last week, with domestic stocks edging lower, according to the U.S. Energy Information Administration.

Further supporting sentiment: South Korea booked 10.6 million bushels of corn via two private tenders, continuing its streak as a key U.S. corn buyer this quarter. Meanwhile, export sales estimates for the week ending October 9 range widely-from 35.4 to 78.7 million bushels-due to the ongoing federal government shutdown, now stretching into its 17th day.

The latest U.S. Drought Monitor paints a mixed picture. While only 38.2% of the High Plains are experiencing dryness, more than 72.3% of the Midwest remains under drought stress. Missouri, Illinois, northern Indiana, and Michigan are among the hardest-hit areas.

Soybean futures also gained ground, with November contracts up 4.25 cents to $10.1075, supported by spillover strength from corn and wheat. January soybeans added the same margin, closing at $10.2850. Futures in soymeal (+0.36%) and soyoil (+0.14%) also posted modest advances.

Analysts expect soybean export sales to fall between 14.7 million and 51.4 million bushels, with soymeal sales seen in the 150,000 to 400,000 MT range and soyoil between 5,000 and 30,000 MT.

In Washington, USDA Secretary Brooke Rollins reiterated that farmers will receive support despite uncertainty around the scale of a tariff relief package, noting "there still are so many unknowns." The administration has moved $13 billion into a discretionary fund for trade aid, but a full announcement is delayed due to the shutdown. Rollins insists the end goal is less reliance on farm aid and more open market access through trade agreements.

Meanwhile, President Trump continues to press for shifting used cooking oil (UCO) sourcing from China to domestic alternatives, though analysts note this would have minimal impact on either U.S. or Chinese markets. In 2024, UCO exports from China to the U.S. were valued at $1.2 billion, dwarfed by the $12.6 billion in U.S. soybean exports to China.

Wheat futures joined the rally after a round of bargain buying helped reverse earlier contract lows. December Chicago SRW wheat gained 3.75 cents to $5.0250, and December Kansas City HRW wheat edged up half a cent to $4.8875. Spring wheat ended slightly lower.

Analysts had expected wheat export sales between 11.0 million and 23.9 million bushels, but the usual USDA report was delayed by the shutdown.

Wall Street ended the session with the Dow down 389 points, driven by banking sector losses tied to concerns over loose lending in private credit markets. Energy futures also slumped, with Brent crude down over 1.5%, dropping below $61/barrel, and gasoline contracts falling in tandem.

Even so, grain bulls dominated the day, keeping prices green amid the storm.