Many times we say that nothing is happening, but other times we can say that everything is happening. January has been one of the most vibrant months in recent years…
If we start to look at what has been relevant for short-term analysis, but also for long-term trend perspectives, we clearly have to look at the inauguration of President Donald Trump. To summarize the concepts, I’ll stick with the concrete idea of strengthening U.S. public finances, and for that, it’s necessary to reduce trade deficits. The tool that will be used is specifically applying import tariffs to all countries and products.
The method of applying this tool is to first go all in, with “all guns blazing,” and then see what can be negotiated – needless to say, this president is comfortable negotiating at all times. First, he targeted a 25% tariff on Mexico and Canada, and also announced he would do the same with China, before pulling back, but the fact is that starting from March or April, tariffs will be applied from those origins.
The concrete impact this is having on markets is clearly an increase in “volatility,” boosting risk in various industries, particularly in the grain market.
On the other hand, Deepseek’s disruption stirred the markets and shows that technology is advancing at a pace much faster than political conversations, but also raises some questions: How much can tech companies grow? Were they already inflated? How can innovation happen? Will China compete at the top of technology to gain global influence?
In other news, Brazil has reversed its currency trend at the start of the year, with the Real appreciating strongly against the Dollar. This has made Brazilian producers less competitive and has strengthened grain prices.
In summary, it’s a much more chaotic world, and we should understand this as an exaggeration of the main geopolitical and economic drivers.
In Argentina
We also received good news from the government with Decree 38/2025, which aimed to lower export duties on grains and soybean by-products, oils, and expellers until June 30, 2025, improving the equation and protecting producers from potential losses.
Looking into the market fundamentals, specifically in Argentina, the supply has been affected, as we went through January with a wave of high temperatures and low rainfall, resulting in lower yields for both soybeans and corn, according to all public information sources, including the Ministry of Agriculture and Argentine Exchanges.
For soybeans, the floor of 50 million tons was broken, dropping to 47/48 million tons. In the case of corn, the area discussion aside, the number is also in the order of 48 million tons—moving away from the potential yields on one side, while February’s rains helped to halt the drop in yields.
On the USDA’s February report, there weren’t major changes for either product, except for a slight downward adjustment in Argentina’s soybean production.
Brazil
Brazil is in full soybean harvest activity, with export estimates of over 11 million tons for February. As for corn, Conab estimates production to be 122 million tons, which is an increase from the January estimate, contrary to what was expected. In both grains, we’ll continue to see how this giant country performs and how it will impact prices.
Although many questions have arisen over the past few months about production, much of it is now confirmed data, and the initial campaign estimates have been validated: we will have more soybeans and corn in the world, with demand being slightly more subdued than in previous years.
It’s key for an Argentine producer to be able to lock in prices at current levels, unless their scenario is that export duties will continue to drop from here onward.
