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RaboResearch projects that global rice stocks-to-use ratios and those of the top 9 exporters will decline through MY 2033/34 due to rising consumption and slower production growth. As a result, rice prices are expected to remain above pre-2023 levels.
A key factor influencing this outlook is Vietnam’s 2023 decision to reduce rice exports by over 50% by 2030. As a major exporter, Vietnam’s policy could significantly impact global prices if fully implemented.
This report is the third in a RaboResearch series on long-term rice market trends. Previous reports analyzed Vietnam’s role in global trade and the potential impact of its export reduction strategy on rice prices. The current report explores how increasing production in top rice-exporting countries could help mitigate price hikes and how delays in boosting output could prolong high prices.
For the week, March corn fell 4 ½¢, March soybeans dropped 13 ¾¢, and March soybean meal lost $3.80 per short ton. Meanwhile, March soybean oil gained 89 points, and all three major wheat contracts saw gains, with March hard red spring wheat surging 21¢.
Most agricultural markets trended lower on Friday following former President Donald Trump’s confirmation of upcoming tariffs on Canada, Mexico, and China. Despite a lower weekly close for corn and soybeans, Jerry Gulke of the Gulke Group remains optimistic about the corn market, noting that March corn still closed in the upper range of its weekly trading range.
Key points:
- Corn market outlook: Corn prices remain about $1 per bushel higher than last fall, translating to an estimated $200 per acre revenue boost for Illinois farmers. Chart resistance is at $5, followed by $5.20.
- Stock concerns: Corn ending stocks for 2024/25 are now projected at 1.53 billion bushels, much lower than early USDA estimates of 2.6 billion. The impact of increased corn acreage in 2025 will depend on yield trends.
- Soybean market dynamics: Despite bearish news from South America, soybean prices remain supported, partly due to a bullish breakout in soybean oil, which was further strengthened by the possibility of U.S. tariffs on Canadian canola oil.
Overall, while corn and soybeans faced pressure this week, technical indicators suggest continued support for both markets, with soybean oil’s strength providing additional upside potential for soybeans.
World Farming Agriculture and Commodity news - Short update 27th January 2025
The third phase of Britain's post-Brexit border regime for EU imports begins Friday, four years after leaving the single market. Due to the complexity of restructuring supply chains and customs, the UK has implemented changes gradually.
Key developments:
- Phased implementation: The first phase (January 2023) introduced additional certifications, while the second phase (April 2023) added physical checks for specific products and new charges.
- Third phase requirements: Starting Friday, businesses must submit detailed UK safety and security declarations before goods reach the border to prevent delays and penalties.
- Impact on businesses: While large retailers can adapt, smaller businesses find the new rules burdensome.
- Future changes: Physical checks on fruit and vegetables have been delayed until July 1, 2024.
- Possible policy shift: Finance Minister Rachel Reeves is open to exploring a pan-European customs scheme, though Britain will not rejoin the EU's full customs union.
The new rules aim to improve border efficiency but could challenge smaller traders with additional bureaucracy.
Market Snapshot: Trump 2.0 Era and Agricultural Turmoil
The return of Trump has already sparked market volatility, with events like a short-lived US-Colombia trade war, criticism of the Federal Reserve, and even discussions about purchasing Greenland. Agricultural commodity markets have been particularly affected, as broader concerns over inflation, interest rates, and tariffs compound crop-specific issues.
Key Market Movements:
- S&P GSCI Agriculture Index rose 1.1% week-on-week, led by gains in coffee, wheat, and white sugar.
- Arabica Coffee hit record highs, with Colombia’s temporary tariffs highlighting coffee’s vulnerability to trade tensions. Complications with EU certification under EUDR further add to an uncertain outlook. Speculation now looms over potential tariffs on Brazil, Mexico, and Vietnam.
- Grain & Oilseed Markets remain uncertain, fluctuating with Trump-related rumors and policy shifts. However, South American weather challenges persist:
- Argentina faces potential crop downgrades due to low rainfall.
- Brazil is struggling with slow safrinha corn planting, reminiscent of the problematic 2020/21 season.
With geopolitical uncertainties and unpredictable weather patterns, agricultural markets remain highly volatile as they navigate the early days of Trump’s second term.
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Proposed tariffs on Canadian and Mexican imports, set to take effect on Feb. 1, could drive up U.S. food prices, particularly for meat, fruits, and vegetables, economists and industry experts warn.
Key Concerns:
- Higher Consumer Costs: Tariffs act as a "food tax," increasing expenses for importers, who typically pass costs on to consumers. This comes at a time when beef and egg prices are already near record highs.
- Heavy Reliance on Imports: Mexico and Canada supply 44% of U.S. agricultural imports, including two-thirds of vegetables and half of fruit and nut imports. Products like avocados, orange juice, and strawberries could see significant price hikes.
- Beef Price Surge: The U.S. imports over 1 million cattle from Mexico annually, but trade disruptions and tariffs could push beef prices even higher. Ground beef prices have already risen 42% in four years.
Market Impact:
- Inflationary Pressure: The mere threat of tariffs has food companies scrambling for alternative suppliers, adding to operational costs.
- Supply Chain Disruptions: With U.S. cattle herds at historic lows, tariffs on imports could further tighten beef supplies, raising prices further.
- Uncertain Economic Effects: While the Trump administration claims tariffs won’t raise prices, analysts warn they could worsen food inflation.
Overall, U.S. consumers could face steeper grocery bills as the country remains heavily dependent on Canadian and Mexican imports for essential food products.
South Africa’s 2025/26 Crop Estimates & Market Overview
Crop Estimates (CEC Report – 28 Jan 2025)
- Maize: 2.646 million hectares (+0.4% y/y).
- Soya Beans: 1.12 million hectares (-2.4% y/y) due to late rains and dry conditions.
- Sunflower Seed: 552,000 hectares (+4.4% y/y), substituting soya beans and sorghum.
- Other Crops:
- Groundnuts: 46,175 ha (+12.1% y/y)
- Sorghum: 39,500 ha (-6.2% y/y)
- Dry Beans: 45,500 ha (+15% y/y)
- Crop conditions are variable, with many summer rainfall areas facing average to below-average conditions.
Economic Factors
- Rand: Averaged R18.62/US$, weakening by 0.4% w/w but strengthening by 0.6% y/y.
- Brent Crude Oil: Averaged US$76.48/barrel (-2.5% w/w, -4.7% y/y).
- Fuel Prices (Forecast for 5 Feb 2025):
- Petrol (95 unleaded): +84c/l
- Diesel (500 ppm): +109c/l
- Diesel (50 ppm): +105c/l
Grain & Oilseed Markets
- Maize Prices:
- Yellow Maize: R5 651/ton (-0.3% w/w, +56% y/y)
- White Maize: R6 839/ton (-1.5% w/w, +76% y/y)
- Domestic maize prices softened slightly but remain high due to tight supply.
- Week-39 cumulative deliveries: 10.805 million tons.
- Exports: 1.758 million tons, mainly to Zimbabwe, Namibia, and Botswana.
- Oilseed Prices:
- Soya Beans: R9 550/ton (+0.6% w/w, +19% y/y)
- Sunflower Seed: R10 095/ton (-0.3% w/w, +22% y/y)
- Domestic oilseed prices supported by a weaker rand.
- Cumulative domestic deliveries (week-48): 1.797 million tons soya beans, 630,966 tons sunflower seed.
- Wheat Prices:
- R5 913/ton (-0.6% w/w, -3.5% y/y), pressured by lower global prices.
- Week-17 cumulative deliveries: 1.719 million tons.
- Imports: 485,795 tons (Russia: 288,574 tons, Lithuania: 65,740 tons, Canada: 54,105 tons).
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