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What 2025 holds for global grain markets

13 January 202516 min reading

As we enter 2025, global agricultural markets are poised to face both challenges and opportunities. Following a relatively quiet 2024, the new year brings with it a mix of stability and uncertainty. Unlike the dramatic disruptions caused by the war in Ukraine two years ago, global markets are starting 2025 on a more stable note. However, geopolitical tensions and macroeconomic uncertainties will create a complex trading environment. Market participants will need to maneuver carefully through this complicated web of competing forces.

In 2024, global grain markets remained relatively stable. This stability was largely due to favorable weather conditions in some regions that offset adverse weather elsewhere. While weather challenges impacted certain areas, overall, the global output of wheat, maize, rice, and soybeans stayed consistent. In 2024, the global food commodity price benchmark averaged 2.1% lower than in 2023. The FAO Cereal Price Index for the year stood at 113.5 points, reflecting a 13.3% decrease from the previous year, marking the second consecutive annual decline following the record levels seen in 2022.

The USDA's latest projections highlight tightening supplies for key grains in the 2024-25 season amid geopolitical tensions, volatile energy markets, and adverse weather conditions. Global wheat production for 2024-25 is forecasted at 793.2 million metric tons (mmt), a slight increase from the previous season. However, world ending wheat stocks are expected to drop to 258.9 mmt, down 3.2% from 267.5 mmt in 2023-24. This decline reflects tightening supplies amid steady consumption levels. Wheat exports are also projected to fall, with the 2024-25 season estimated at 212.3 mmt, marking a 5.3% decrease from 224.1 mmt last year. 

Global corn supplies are under pressure as production and stocks decrease. Corn production is forecasted at 1,214.3 mmt, down 1.3% from 1,230 mmt in the prior season. Ending stocks are expected to decline more steeply, falling to 254.2 mmt, a significant 6.8% reduction from 272.7 mmt in 2023-24.

Global milled rice production remains robust, with output projected at 532.9 mmt for 2024-25. For soybeans, global supplies are expected to remain ample, assuming favourable conditions prevail in the coming months in South America.


This complex production landscape is further compounded by external factors shaping global markets. The potential for changes in U.S. trade policies, continued conflict in the Black Sea region, and instability in the Middle East are likely to disrupt global agri-food commodity markets. Adverse weather events, including droughts and floods, continue to impact yields and logistics, while volatile energy prices—particularly natural gas—are driving up fertilizer production costs, adding to agricultural input expenses.

NEW TRADE WAR THREATENS TO DISRUPT GLOBAL GRAIN MARKETS

In an exclusive response to Miller Magazine, Joe Glauber, Senior Research Fellow at the International Food Policy Research Institute (IFPRI), shared his insights on the potential effects of Donald Trump’s proposed tariff plans on global grain markets in 2025. Glauber emphasized that Trump’s return to the presidency and his threats to use tariffs as a tool to achieve trade and foreign policy goals will create significant uncertainty in global markets. However, the exact targets and actions remain unclear. As a candidate, Trump proposed imposing a 60% tariff on China and 10-20% across-the-board tariffs on all U.S. trading partners. As President-elect, he has further threatened to raise tariffs on China by 10 percentage points and impose 25% tariffs on Canada and Mexico unless they address issues related to immigration and drug smuggling at the border. Additionally, Trump has suggested implementing 100% tariffs on the expanded BRICS countries if they transition away from using the U.S. dollar in their transactions.

While it is uncertain whether these threats will materialize once Trump assumes office in January or if they are primarily political rhetoric, Glauber warned of the potentially devastating impacts of a trade war. “What is clear,” he stated, “is that if there is a trade war between the U.S. and China, the U.S. and its NAFTA partners, or the U.S. and the EU, agriculture will likely bear the brunt of the collateral damage.” Drawing parallels to the first Trump presidency, Glauber pointed out that U.S. agricultural exports were frequently targeted during retaliatory trade measures by other countries. These countermeasures resulted in significant losses for U.S. producers, and only substantial government assistance prevented more severe income declines in the agricultural sector.

GRAIN MARKETS FACE COMPLEX CROSSCURRENTS 

Speaking to Miller Magazine, “Market participants must navigate an intricate web of supply-side abundance, geopolitical tensions, and macroeconomic uncertainties,” said Dave Whitcomb, Head of Research at Peak Trading Research, emphasizing the delicate balancing act required of traders and stakeholders. Brazil is set to dominate the supply-side narrative, with favorable weather conditions positioning the country for a potentially record-breaking production year. “Early harvest indicators and planting progress suggest the country may achieve a record soybean crop exceeding 170 million metric tons. This abundance could significantly impact global trade flows, particularly affecting U.S. export prospects starting in February 2025,” Whitcomb noted. 


The geopolitical arena is adding further uncertainty to grain markets. Whitcomb highlighted how the incoming U.S. administration’s trade policies, particularly tariff threats, are already influencing market behavior. “Traders have been rushing to secure shipments ahead of potential 2025 tariff implementations, though this demand surge appears to be slowing,” he explained. Additionally, volatile crude oil prices—driven by ongoing geopolitical tensions—are influencing the broader commodity complex, at times providing support and at other times acting as a headwind.

China’s slowing economic growth presents another critical variable. “The yuan recently dropped to 15-month lows, and tumbling bond yields reflect the market’s concerns about slower growth for the world’s largest commodity buyer,” Whitcomb pointed out. “This economic fragility in the world’s largest agricultural importer could significantly impact global demand patterns,”.

The Federal Reserve’s monetary policy and the strength of the U.S. dollar will remain pivotal. Whitcomb observed that “the dollar’s strength has been a persistent headwind for commodity markets, and its trajectory will largely depend on upcoming inflation and employment data.”

Dave Whitcomb summarized the challenges and opportunities for 2025 with a clear call to action: “As these various forces converge, 2025 is shaping up to be a year where nimble trading strategies will be essential. While supply fundamentals appear bearish with record South American production looming, the interplay between geopolitical tensions, energy markets, and seasonal patterns could create periodic opportunities. Success will likely depend on carefully balancing these competing factors while remaining alert to shifts in weather patterns, policy developments, and macroeconomic indicators.”

WEAK LA NIÑA CONDITIONS EXPECTED, BUT CLIMATE CHANGE’S EFFECTS PERSIST

While geopolitical risks have been central to discussions on the grain markets, it’s also crucial to consider the impact of climate and weather patterns. Natalja Skuratovic, Senior Account Executive at EarthDaily Agro, noted that the latest atmospheric and oceanic conditions continue to display ENSO-neutral patterns, which have remained steady since May 2024. “Sea surface temperatures are slightly below average across much of the central and eastern equatorial Pacific,” Skuratovic explained. Despite these conditions, the World Meteorological Organization’s latest update suggests that La Niña conditions may emerge within the next three months. However, Skuratovic notes that these conditions are expected to be ‘weak and short-lived.’ In the broader context of ongoing climate change, she emphasized that while La Niña’s cooling effect may briefly impact global weather patterns, it will not reverse the long-term consequences of global warming. “La Niña’s cooling effect is likely to be brief and does not reverse the long-term impact of global warming,” she concluded.


As we examine the broader geopolitical and non-fundamental risks facing the grain industry, it is equally important to focus on the regions and countries that play a pivotal role in global grain production, export, and import. Key players such as the European Union, the United States, Latin America, Australia, and Russia influence the stability and flow of global grain markets. Understanding the production trends, export strategies, and economic conditions within these regions offers crucial insights into the future of the grain industry and the challenges it may face in the years ahead.

EU GRAIN OUTPUT SET TO INCREASE

In its first forecast for the 2025 crop, COCERAL highlights moderate growth in grain production across the EU-27 for 2025. Total grain production is projected to rise to 274.9 million tonnes in 2025, compared to 259.3 million tonnes in 2024, reflecting an increase of 6% year-on-year, driven by improved yields and expanded cultivation in several member states.

Soft wheat continues to dominate European grain production, with an expected output of 126.5 million tonnes in 2025, up from 114.1 million tonnes in 2024, representing an increase of 10.9% year-on-year. Corn production in the EU-27 is forecasted to rise to 61.8 million tonnes in 2025, up from 60 million tonnes in 2024.

SOVECON PREDICTS SMALLEST RUSSIAN WHEAT CROP SINCE 2021

Russia maintained its position as the world’s leading wheat exporter in 2024, despite a significant decline in production. The country remains the top supplier to key regions, including the Middle East, Africa, and Asia. In late November 2024, Russia’s customs sub-commission announced a wheat export quota of 11 million metric tons (MMT) for the period between February 15 and June 30, 2025. This quota is considerably lower than last year’s 29 MMT quota for all grains during the same period. The reduced quota points to a much tighter wheat supply from Russia in the second half of the current season.

According to Rosstat, Russia harvested 124.96 mmt of grain in 2024, down from 144.96 mmt last year. Wheat production totaled 82.4 mmt, compared to 92.9 mmt in 2023; barley production dropped to 16.7 mmt from 21.1 mmt; and corn production reached 13.2 mmt, down from 16.6 mmt last year.

In late December, SovEcon, a leading consultancy for Black Sea grain markets, revised its 2025 Russian wheat production forecast downward by 3.0 million metric tons (MMT), now estimating 78.7 MMT. If this forecast holds, it will mark the smallest wheat crop since 2021 and fall below the five-year average of 88.2 MMT. SovEcon also lowered its export forecast to 43.7 MMT, down from 44.1 MMT in November.

UKRAINIAN GRAIN EXPORT OUTLOOK

Ukraine’s grain and oilseed exports for the 2024/25 season are projected at 46.9 million metric tons (MMT), according to data from the Ukrainian Ministry of Agrarian Policy. Wheat exports are estimated at 16.2 MMT, while corn exports are forecast at 20.5 MMT.  Ukraine’s wheat production exceeded expectations, reaching 22.3 MMT. Despite challenges posed by unfavorable weather during the sowing season, wheat acreage in Ukraine is expected to increase. SovEcon’s initial forecast for Ukraine’s 2025 wheat crop is 21.1 MMT, which falls below the five-year average of 24.2 MMT.

BRAZIL: A YEAR OF OPTIMISM AMID CHALLENGES

Brazilian agribusiness enters 2025 with an optimistic outlook after a challenging 2024. “If last year the sector acted as a brake on the Brazilian economy, with a 3% decline, this year agribusiness is expected to boost the country’s Gross Domestic Product (GDP) again,” Luiz Carlos dos Santos Jr., Associate Director at SA Commodities, remarked. Analysts forecast agricultural GDP growth of between 3% and 5.5% in 2025, a recovery from 2024, though still below the remarkable 16% growth seen in 2023.

According to the latest estimates, grain production in Brazil is expected to reach 322.4 million tons, an 8.2% increase (or 24.5 million tons) compared to the 2023/24 harvest. Soybean production is leading the way with a projected output of 166.2 million tons, up 12.5% from the previous year. “Weather conditions have been favorable for soybean crops across all regions, allowing planting to advance rapidly,” Luiz highlighted. Meanwhile, first-crop corn planting has covered 65.1% of the expected area, but the total planted area has decreased by 5.9% due to low market prices for the cereal. In the wheat sector, the harvest is nearing completion. Despite a slight reduction in planted area, improved weather conditions in the Central-South Region have resulted in better average yields compared to 2023.

“On the export front, Brazil is set to ship 103 million tons of grains in 2025,” Luiz said. “However, logistical challenges persist, and the sector remains cautious about geopolitical developments, including those in the United States. Domestically, soybean production is expected to meet record-high consumption levels, driven by biodiesel demand.”

Luiz pointed out a significant challenge: the rising dollar. “While a stronger dollar boosts exports, it increases the cost of importing essential inputs such as fertilizers and agricultural pesticides, putting pressure on profit margins, especially for small and medium-sized producers,” he explained. To mitigate this, he emphasized the need for investments in domestic production of inputs and efficiency-enhancing technologies. 

ARGENTINA’S GRAIN SECTOR BRACES FOR CLIMATE UNCERTAINTY IN 2025

Argentina, the world’s largest exporter of soybean meal and oil, faces a mixed outlook in 2025. While the estimated planted area for soybeans remains steady at 18.5 million hectares, production is projected between 52 and 55 million tons. Although autumn rains in 2024 provided some relief, climate concerns loom large for 2025. According to the Rosario Stock Exchange (BCR), accumulated rainfall increased by 26% in 2024, ranging from 700 to 1,200 millimeters. However, intense heat and water scarcity in December and early January have raised concerns about crop development. “The forecast for the first half of January suggests low rainfall, which could adversely impact harvests in Argentina, Paraguay, and southern Brazil,” Luiz noted. Expectations improve for the second half of January, with rain expected to boost yields. “As in Brazil, we have no doubt that the climate will be a determining factor in the land of Los Hermanos,” Luiz added.

AUSTRALIA SET FOR STRONG WHEAT EXPORT YEAR

Dennis Voznesenski, an Agricultural Economist and author of “War and Wheat: Navigating Markets During Global Conflict”, provided insights into the Australian wheat outlook for the 2024/25 season, highlighting key developments in the country’s wheat production and export landscape for Miller Magazine. As winter crop harvest season in Australia winds down, the country is set to produce an estimated 30.6 million metric tons (mmt) of wheat, a significant increase from 25.9 mmt in the previous year. Voznesenski noted that despite some weather-related delays, the harvest has exceeded expectations, with wheat production in Western Australia forecasted to reach 10.8 mmt, the third-largest on record. 

In addition to favorable harvest results, the depreciation of the Australian dollar has played a pivotal role in maintaining strong local milling wheat prices. From 0.69 USD in September 2024, the Australian dollar has depreciated to 0.62 USD by January 2025. Voznesenski pointed out that this currency shift has prevented wheat prices from dipping to their usual seasonal lows, which typically occur during the harvest period. 

EGYPT’S WHEAT IMPORT OUTLOOK

Given Egypt’s position as the world’s largest wheat importer, its role in global grain markets is pivotal, especially in the context of the ongoing shifts in global supply chains. Speaking to Miller Magazine, Nouran Ezzeldin, Founder and CEO at Granos Oros for Global Agri Business Solutions and Export, provided insights into Egypt’s wheat import outlook for 2025. As the world’s largest importer of wheat, Egypt’s import needs remain significant due to its large population and the central role wheat plays in the country’s diet, particularly for its bread subsidy program. “Egypt’s wheat import needs are expected to stay high for 2025,” Ezzeldin explained. “Domestic wheat production is projected to reach around 9.5 million metric tons for the 2024/2025 period, but total consumption will exceed 18 million metric tons. This creates a substantial gap, ensuring that imports will remain crucial.” Ezzeldin highlighted Russia as Egypt’s largest wheat supplier, accounting for 50-55% of its imports, followed by Ukraine, which provides about 20-25%. However, geopolitical tensions, particularly the ongoing conflict in Ukraine, could influence wheat availability and pricing. To mitigate such risks, Egypt has been diversifying its suppliers. “India has recently emerged as a significant supplier, with countries like Argentina and France also playing an important role,” Ezzeldin noted.

An important recent development in Egypt’s wheat purchasing strategy is the Mostakbal Misr wheat purchase.  “Mostakbal Misr has secured 1.267 million metric tons of wheat for delivery through June 2025, sourced primarily from Russia, Romania, and Ukraine,” Ezzeldin shared.

In addition to diversifying sources, Egypt is also working to improve domestic agricultural efficiency. “Efforts to expand wheat cultivation in newly reclaimed lands and invest in better irrigation technologies are underway,” Ezzeldin said. “However, in the short term, these measures are unlikely to fully close the import gap.”

Looking ahead, Ezzeldin concluded, “The wheat import outlook for Egypt in 2025 remains strong, with a continued focus on securing steady supplies at affordable prices. Given the importance of wheat for Egypt’s food security and its bread subsidy program, the country will continue to prioritize diversification and stability in its wheat supply chains.”

TURKISH FLOUR EXPORTS FACE UNCERTAIN FUTURE AMID REGIONAL AND GLOBAL SHIFTS