What’s happening in the current situation?
January began with a lot of official information, especially the data coming from the fields. Everyone is aligned, but the price impact is still significant. We have information from USDA, Conab, and updates from the Argentine markets regarding soybean and corn production and supply.
What stands out the most is what the USDA reported for the U.S., with adjustments made to both crops. It is true that this organization typically makes updates in January on supply and demand levels. The specific data has been positive for prices, but it hasn’t changed the overall trend.
Soybeans
Starting with soybeans, the most relevant data was the production decrease in the United States, from 121 to 118 million tons, due to lower productivity per hectare. Regarding the stock-to-consumption ratio, the U.S. adjusted it from 12.8 to 10.3 million tons, making the number tighter but still with some comfort compared to previous years. Closing the supply loop for this crop, Brazil is at 169 million tons, and Argentina remains unchanged at 52 million tons compared to previous months.
Corn
For corn, the production cut was almost 8 million tons for the United States, bringing production to 377.6 million tons, still aligned with the previous crop, with cuts tied to lower productivity. It also adjusted the harvested area, which resulted in a stock reduction leaving the U.S. at 39 million tons, strengthening prices. Regarding Brazil, the number remained the same as previous months, 127 million tons, and Argentina’s remains at 51 million tons. For this cereal, there are still big doubts, as Argentine exchanges estimate production levels below this number.
South America
January in South America means fully experiencing the weather market. As the first month of the year has passed, the rainfall hasn’t been favorable, which is why production cuts in Argentina have been confirmed, though the market is still well-supplied.
Conclusion on soybean and corn fundamentals
This hasn’t changed from previous months, where we have been detailing a downward trend in prices due to a larger supply and demand that isn’t growing at the same pace.
Trump and uncertainty levels
The inauguration of the new U.S. president and the commercial actions he will quickly or not take have heightened market uncertainty. The questions around this are: What might he do with his key trade partners, such as China? Will China respond the same way? What will the relationship between the new president and Canada or Mexico be? The first is strategic for U.S. production cost structure, and if the conflict with China and Canada intensifies, it could drive up production costs while lowering commodity prices, accelerating the price drop.
It’s also true that, as demonstrated during his first term, he could offset part of this situation with direct and indirect subsidies, not affecting future planting decisions in terms of reduced acreage. The price drop may not create the same financial distress in countries like Brazil or Argentina, which would be detrimental for these two countries.
Conclusion
As summarized, 2025 presents a high level of uncertainty and structural changes, requiring business intelligence to be up to the task of restructuring businesses and business models.
Focusing on possible impacts for Argentine agribusiness entrepreneurs, the challenge is to determine which variables have the greatest impact and which of those variables can be managed in a new way. The goal is to manage them, and determine which ones cannot be controlled. This will define the level of business risk one is willing to take.
The professionalism demanded by this new local and international context requires working with peers and supported by multidisciplinary, competent teams for decision-making. By the way, Argentina is very well positioned in this regard, with competitive pricing.
